Public Enterprises minister Lynne Brown has blocked a R30 million pension pay-out to former Eskom CEO, Brian Molefe, the government said on Sunday.
“I have considered the Eskom board’s reasoning in formulating the proposed pension payout and cannot support it,” Brown said in a statement.
Molefe resigned as CEO of Eskom at the end of 2016, following the release of the Public Protector’s State Capture report, in which he was implicated as having a close relationship with the controversial Gupta family.
The report contained phone call records, showing that Molefe and the Gupta brothers had made 58 phone calls to each other in a small window of time.
This was over and above allegations contained in the report that the Gupta family had received preferential treatment by Eskom, and were even ‘bailed out’ by the power utility, where Eskom funded the family’s acquisition of Optimum coal mines.
The minister said the payout could not be seen as a performance reward, as Molefe had already been compensated for turning the power utility around.
“I found the argument presented by the board on why the pension arrangement was conceived lacking in legal rationale and it cannot be substantiated as a performance reward because Mr Molefe has already been granted a performance bonus for his contribution to the turnaround of Eskom.
“Nor is the proposed pension payout justifiable in light of the current financial challenges faced not only by state-owned companies (SoCs), but by the country as a whole. I have in the past asked Eskom and the other five SoCs in my portfolio to demonstrate financial prudence and social consciousness when considering executive emoluments,” the minister said.
“Given that I was not a party to the contract of employment concluded between the Eskom board and Mr Molefe I have instructed the board to urgently engage Mr Molefe and report back to me with an appropriate pension proposal within seven days.
“It is unfortunate that such a sensitive and private matter was handled so recklessly. Finally, I have asked the board to investigate how its proposal got into the public domain prior to my having had the opportunity to consider it,” Brown said.
Molefe has since been sworn in as a Member of Parliament representing the ANC of the North West Province, in February.