Resigned or retired – either way Molefe and Eskom are in the wrong

Constitutional law expert Pierre de Vos says that all ‘facts’ being presented around the controversial reappointment of Brian Molefe as Eskom CEO points to two possible scenarios – and neither absolve the lead actors.

Public Enterprises minister Lynne Brown and the Eskom board this week faced a grilling by a Parliamentary portfolio committee, seeking their account of events that led to Molefe being reappointed Eskom chief after stepping down in November 2016.

The minister and Eskom chair, Dr Ben Ngubane, told the committee that Molefe did not resign as he, Eskom and the minister had indicated at the time, but rather that he had applied for early retirement.

Part of his retirement package was a R30 million payout – which was subsequently denied by Brown in April 2017.

Because no satisfactory agreement could be reached around the payment, Molefe’s retirement application was rescinded by the board, and his old contract reinstated. To explain Molefe’s time away from Eskom, the minister and the Eskom board agreed to say he was on “unpaid leave”.

While there are many questions around this account of events – not to mention how Molefe was able to serve as an ANC MP during his “leave” – there is at least one glaring fact that points to, at best, gross incompetence, and at worst, outright fraud.

Something is not right at Eskom

According to de Vos, the biggest indication that all is not as it seems is the very obvious 5-month gap between Molefe resigning in November 2016, and it being ‘revealed’ that he had in fact taken an early retirement package instead in April 2017.

There is nothing about this period of time that paints Eskom in a positive light, because it means only one of two scenarios:

  • The first is that Molefe did indeed resign from Eskom as everyone, including the minister had understood – and that the whole story of his early retirement was concocted after the fact. This would have defrauded Eskom and South Africa of R30 million.
  • The second is that Molefe did retire as Ngubane said, and Eskom and it’s board tried to pass R30 million over to him secretly and unlawfully, while misleading the minister of public enterprises and South Africa by not immediately correcting the perceptions that he had resigned.

According to de Vos, while Eskom chair Ben Ngubane has produced two letters (from himself and from Molefe) indicating that that the CEO did in fact apply for early retirement, the unofficial nature of the letters means they could have easily been compiled more recently.

“It would be quite shocking if Dr Ngubane and Mr Molefe fabricated evidence to try and regularise the otherwise unlawful re-appointment of Mr Molefe – and I am reluctant to embrace this version of events,” de Vos said.

“Given the fact that Dr Ngubane admitted in his affidavit that Eskom did agree to foot the bill for Mr Molefe’s early retirement, and did in fact pay him R30 million as an early retirement pension, it is possible that the version presented by Mr Molefe and Dr Ngubane is substantially correct.”

But even if so, Molefe and Ngubane may find themselves in a heap of trouble.

“Even on their own version of events, the two gentlemen – through acts and omissions – deliberately misled Minister Brown and the public to secure a secret and, as it turns out, an unlawful, pay-out of R30 million for Mr Molefe,” de Vos said.

“If the Sunday Times had not revealed the R30 million pay-out to Mr Molefe and if Minister Brown had not vetoed this pay-out, Mr Molefe would have kept the R30 million illegally paid to him by Eskom and none of us would have been the wiser.”

De Vos argues that, given both Ngubane and Molefe’s history in finance and state owned companies, it would be a reach to believe that neither one of them knew that the early retirement deal was irregular and unlawful.

“The fact is that the relevant Pension Fund rules do not permit Mr Molefe to take early retirement,” de Vos said. “If Dr Ngubane and Mr Molefe had believed that such an early retirement was perfectly legal and ethically defensible, why was Minister Brown and the public not explicitly told of this?”

In his affidavit, Ngubane conceded that Eskom only sought legal advice on the matter after the R30 million payout was declined.

“Even if one believes the version of events presented by Dr Ngubane and Molefe, they at best acted in an underhand, incompetent, and secretive manner to effect an unlawful payment of R30 million to Mr Molefe. At worse, they intentionally defrauded Eskom (and hence the public) of R30 million,” de Vos said.

You can read the full article on Constitutionally Speaking.

Read: Molefe’s reappointment is illegal until we’re convinced otherwise: committee

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Resigned or retired – either way Molefe and Eskom are in the wrong