Former Eskom CEO must face criminals charges for helping Guptas capture Eskom — Zondo

The Zondo Commission of Inquiry has recommended that former interim Eskom CEO Matshela Koko be criminally charged for his “integral” role in advancing the Gupta family’s capture of the state-owned power utility.

The fourth part of the inquiry’s report was handed to the presidency on Friday. More than 500 pages spanning the third and fourth volumes of this instalment focused on Eskom’s capture.

These volumes delve into several allegations levelled against Koko through multiple former Eskom staff members, witnesses who had worked at companies doing business with Eskom, and other evidence presented during the hearings.

One of these is that Koko advanced the interests of the Gupta-owned Tegeta coal company, which operated the Brakfontein Colliery near Delmas.

Koko had served in various engineering capacities since his appointment in 1996.

In 2010 he was promoted from senior manager to divisional executive. In 2014 he was appointed the group executive for technology and commercial.

He served as acting group CEO between 2016 and 2017 after Brian Molefe resigned amid allegations that he was colluding with the Guptas.

While Koko and his defenders have long said that he had a solid reputation for curbing rotational power cuts during his tenure, the Zondo Commission alleged that Koko was involved in several unlawful activities.

The allegations included that:

  • Koko was the driving force behind the suspension of Eskom’s former head of primary energy, Kiren Maharaj. Maharaj had been at the utility from 1996 to 2015 and was ostensibly viewed as an obstacle to the Gupta’s securing lucrative coal supply contracts.
  • Koko had advanced the use of non-compliant coal from the Gupta-owned Tegeta Exploration and Resources at the Majuba Power Station.
  • Koko had helped facilitate an irregular contract for a Master Services Agreement (MSA) with Trillian, co-owned by Gupta associate Salim Essa, alongside consultancy firm McKinsey.
  • Koko, alongside former Eskom CFO Anoj Singh, pressured Glencore into selling its coal interests to the Guptas. The former executives had “by false pretences” led Eskom to process payments of R659 million and R1.68 billion, which was later converted to a guarantee, as pre-payments for coal. These were required to help the Guptas complete and save the sale of a share transaction.

Zondo recommended that criminal charges of corruption and theft be laid against Koko and Singh, particularly for their supposed roles in the Glencore deal.

In addition, the NPA should consider the criminal prosecution of Koko and several other executives for possible contraventions of the Public Finance Management Act, Eskom policies, and the Prevention and Combatting of Corrupt Activities Act.

Matshela Koko, during his testimony at the Zondo Commission of Inquiry

According to the report, Koko seemed to fight to have poor quality coal from Brakfontein mine approved for use in Eskom’s Majuba Power Station.

While the coal was initially suitable for use, an independent service provider and SABS sampling test later determined it had deteriorated below the minimum requirements.

That was after an extension across the road from the original colliery had started mining.

Koko insisted that the SABC resample the coal but did not want Eskom’s coal experts to witness the testing procedure, as was required by the utility’s coal quality management policy.

When he was informed this was against the company’s practice, he assured that a secondary test would be conducted afterwards, which Eskom’s experts would attend.

However, on the same day of the secondary resampling, he informed the employees who would witness the secondary test that it had been cancelled.

It later emerged that a manager at Tegeta’s Brakfontein Colliery and his relative had forcefully gained entry to the SABS testing laboratory to confront the workers testing the coal.

They had allegedly attempted to exert undue influence on the staff to change results to show the coal was fit for purpose.

A sample of the Brakfontein coal taken a week later presented such astoundingly different results that the laboratory concluded it could not have come from the same mine.

The sample that had cleared the quality parameters was evidently not from Brakfontein.

Koko allegedly instructed contract manager Gert Opperman to convince Majuba Power Station to accept the coal. Opperman obliged due to what he labelled as a “threatening” Koko.

Koko later changed the stations where coal needed to be tested — against Eskom’s coal supply agreement conditions.

Despite various subsequent tests showing the coal was non-compliant, Koko continued to advocate for its use.

Poor coal quality is one of the factors that can lead to boiler tube leaks in generating units.

This is one of the reasons units need to be taken offline for maintenance.

The relevant volumes of the State Capture report are embedded below.

Judicial Commission of Inquiry into State Capture: Part IV vol. 3

Judicial Commission of Inquiry into State Capture: Part IV — vol. 4

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Former Eskom CEO must face criminals charges for helping Guptas capture Eskom — Zondo