Censored report reveals serious irregularities and conflicts of interest at Eskom

Despite being heavily sanitised by Eskom, the long-awaited Dentons report shows serious financial irregularities at the power provider, according to a report by News24.

News24, along with 3 other parties, obtained a copy of the report through a Promotion of Access to Information Act (PAIA) application.

The report was commissioned by the Eskom board in 2015 to establish the causes of the operational issues the utility had suffered in 2008 and why it could not adequately supply the economy with electricity.

According to the report, Dentons highlighted serious cause for concern regarding the manner in which Eskom awarded contracts for the supply of diesel and coal; cases of possible nepotism; conflicts of interest; and other financial irregularities.

Some of the contractors who benefited from the R30 billion Eskom spent on diesel for its open cycle gas turbines between 2013 and 2015 – were companies that had no footprint in the industry and that may have been set up by Eskom employees themselves.

“A cursory review of the web for some of these suppliers conducted by an officer of Eskom contemporaneously suggested they were not well established entities. We were informed that some of the suppliers had rudimentary invoices (for example, prepared in Microsoft Word rather than generated from an accounting system),” said the report.

Dentons also highlighted serious issues of nepotism were employees had established companies using their family members, and then removed themselves from the board before a probity check.

These issues were over and above serious financial reporting irregularities, noted Dentons, which included late invoicing, unusual transaction sums and over R200 million wasted in just two years – because the power utility had failed to secure the requisite discounts from its diesel suppliers.

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