PARLIAMENT – Eskom’s head of generation Matshela Koko on Wednesday implicated former colleagues in corruption and insisted his hands were clean during his testimony before the parliamentary inquiry into the power utility.
He claimed that he was victimised because he sought to block shady dealings, telling MPs: “I feel hurt and aggrieved.”
Koko singled out Eskom’s former head of legal turned whistleblower Suzanne Daniels. He said she had called him a liar in her testimony to the inquiry but that he had refused to sign off an irregular payment of R460 million to consulting firm McKinsey which she had recommended, though there was no valid contract between the two companies.
“What the committee must deal with, is [her] coming here saying Mr Koko is a thief and Mr Koko puts before you a recommendation to pay R460-million to McKinsey,” he said, adding that he refused.
Last year, Daniels told the inquiry she viewed payments for consultancy fees, in the absence of any formal contract, as “brazen theft”.
On Wednesday, Koko told the inquiry: “I have been called a thief by people I trusted, by people I still trust. I have been called a thief by Suzanne Daniels, who I regard as an extremely competent lawyer… People abuse these forums.”
Last week, the National Prosecuting Authority accused McKinsey of using its relationship with Eskom to create a semblance of legitimacy that allowed Trillian, a firm linked to the Gupta family, to drain R600 million from Eskom for no services rendered.
Daniels testified that the utility never had a contract with Trillian’s subsidiaries, but made at least two payments of R30-million and R500-million for consultancy fees.
Koko told the committee that he saw an instruction on direct invoicing but “could not support it” because “simply put, there was no direct contract between Trillian and Eskom”.
He also claimed that Daniels was lying when she told the committee that he was present at a meeting in Melrose Arch where the Gupta’s close associate Salim Essa told her that four senior Eskom executives would be suspended, among them Tshediso Matona who was eventually replaced by Brian Molefe.
The evidence leader in the inquiry, Advocate Ntuthuzelo Vanara, told Koko that he should expect his denial to be contradicted by other witnesses.
“At the end of this meeting, there will be two witnesses who places you at Melrose Arch.”
One of the other witnesses who would place Koko at the meeting, is suspended senior executive Abram Masango, who was responsible for group capital. He was a witness at the disciplinary hearing that recently cleared Koko of charges of nepotism and conflict of interest, relating to a contract awarded to a company in which his stepdaughter is involved.
Koko, who served as acting chief executive when he was suspended, described Masango as a close friend but said he had been forced to act against him because of indications of corruption. He said he was forced to act against him and Kusile power station’s senior manager for contract management, France Hlakudi.
Unlike former chief financial officer Anoj Singh, who bowed to pressure to quit on Monday and appeared before the inquiry on Tuesday, Koko responded in detail to questions about Eskom’s contracts and operations.
But he repeatedly pleaded ignorance when he was grilled by Vanara and MPs about the apparent preferential treatment of the Gupta family’s Tegeta Exploration, notably the slashing of a penalty for sub-standard coal from the Optimum mine from R2.1-billion to less than a quarter of a million rand.
Koko said there had been a clear instruction from Molefe that the fine was open to arbitration, as indicated by a conflict resolution mechanism in the sale contract for Optimum.
He said he wanted to dispel any notion that the penalty was imposed on the seller Glencore to bankrupt it and pave the way for Tegeta to snap up the mine.
“I want to address the myth that Eskom created fines to force Glencore into bankruptcy so that it [the Optimum mine] can be bought by the Guptas.”
Questioned by MPs on the public enterprises committee conducting the inquiry, he added: “South Africans do not know that Optimum went into business rescue when I was on suspension, I was sitting at home. The part I tell this committee comes out of my knowledge of reading the documents.”
He said he had to accept that the executives involved in concluding the contract with Tegeta had “applied their minds”.
The Democratic Alliance’s Natasha Mazzone said the biggest issue she had with Tegeta was that she failed to understand why it was necessary for the company to get a R1.6-billion prepayment for coal as Eskom could simply have issued a guarantee if not for the obvious conclusion of having to assist the Guptas to buy the mine.
“I would like an answer from you as to why I should not come to this conclusion.”
Koko flatly said he did not think she should draw the conclusion. He said the best he could offer was to show her Eskom’s independent audit report reflecting that the coal was duly received. He stressed that the company acted in the manner it did because it “wanted to avoid load shedding at all cost”.
She asked who had negotiations that prompted an eleventh hour, extraordinary board meeting that agreed to the prepayment. He put the responsibility on Eskom’s board tender committee.
“The board tender committee is a decision maker, not us.”
Pressed by her about evidence that Sahara Computers, another company in the Gupta business empire, had booked his hotel accommodation for a visit to Dubai in 2016, Koko flatly denied that his booking at the Oberoi hotel was handled by the CEO Ashu Chawla.
“I can tell you that I did not meet Chawla in Dubai, he did not book for me. If you have a chance, contact the hotel.”
Mazzone replied that she had the booking note from the hotel.
“I would like to see that,” he replied.
Steve Swart from the African Christian Democratic Party insisted that Eskom engineered a coal crisis at the Arnot power station to pave the way for the Tegeta deal.
“Eskom bent over backwards to accommodate Tegeta to obtain coal at Arnot at a much higher price. But is it criminal? It is corruption,” Swart charged.
It was a lie that the prepayment was used for capital, because “it was used to buy a mine”, he said.
Koko demurred that he did not follow Swart’s argument.
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