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Eskom to take action against former acting CEO

Power utility’s net profit is down by 83% to R1 billion.

JOHANNESBURG – The board of South Africa’s state-run power utility Eskom will pursue disciplinary action against former acting chief executive, Matshela Koko, who allegedly violated procurement rules, the company said on Wednesday.

Eskom’s moves come against the backdrop of growing graft, governance and financial concerns regarding South Africa’s public companies, whose woes are pressuring the Treasury at a time when the economy is stuck in a recession.

Eskom’s executives also denied at its annual results presentation that it was financially stressed and said it would look to seek funding options without the traditional government guarantees it has enjoyed. The firm provides virtually all of the power for Africa’s most industrialised economy.

Eskom’s results were due to be released last week but were delayed after it said external auditors had raised “two reportable irregularities”.

One of these related to Koko, who allegedly violated procurement rules by giving contracts to a firm where his stepdaughter was a director.

The company’s finances have also been under the spotlight but chief financial officer Anoj Singh said: “With the information we have at hand we cannot describe Eskom as financially stressed”.

The company said it has secured 53% of the funding it required for its 2017/18 financial year, which runs to the end of March. It’s net profit fell by 83% last year to R1 billion ($77 million). ($1 = R12.9193)

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The way the SABC deals with corruption is if individual resign all charges get dropped. Don’t expect anything more from Eskom either except slap on the wrist. I gues crime does pay if you are an elected anc crony…

The Eskom results presentation concludes with “We call on customers to increase consumption and to engage with us proactively to take advantage of the surplus capacity situation”.
Wow! Having given us blackouts, and increased the price of electricity massively over the last decade or more, and still unable to generate surplus cash, they find that the users have discovered more efficient ways of consumption, and now they beg us to use more of the expensive stuff!
They produce less than they did 10 year ago, and they pay huge bonuses! Astonishing to say the least!!!

One of the reasons I always say all SOEs should be part publicly owned and part state owned is based on my observations of how some active citizen shareholders take action on their companies when they violate procedures and legislation. I think citizen shareholders would help report and curb corruption. And then there’s the obvious potential wealth creation opportunity which could be opened to the poor.

The major problem with a company owned both by the state and privately is that the company has an unfair advantage over other companies, because it can and will get bailed out regularly by the state. Because of the unfair advantage a company like this will eventually kill off all the competing companies and form a monopoly. This in turn reduces competition which raises prices and lowers quality.

Eskom is a monopoly and already has a unfair advantage, just look at how they are abusing their market position and refusing to let indepedent power producers into the market (i.e renewables as a example).

Firstly they need to seperate out the grid operator from the generation guys because that is already a massive advantage because they can control who connects.

They then need to allow the generator to compete in a fair market. They would have government funding for projects that private is not willing to do and can then compete fairly with private for other projects.

Most of the world has gone that route already, just SA where the ANC wants to keep control over large capital projects as far as possible. Look at Telkom, still not amazing but carved out their own market and are doing much better now imo.

Where there is Smoke there is Fire.
Eskom seems to be smoking?

Every South African with a bit common sense saw this one coming.
It is due to easy Bonuses, very suspect tenders and incompetence.

If not profitable close it down, save the bleeding/dying TAXPAYER.

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