The suspended chief financial officer of South Africa’s cash-strapped power utility resigned a day before he’s due to face a parliamentary inquiry on mismanagement of funds and two days after the government overhauled the company’s board.
Eskom received a letter of resignation from Anoj Singh’s attorneys Monday, the Johannesburg-based electricity producer said by email. He resigned with immediate effect, it said.
Eskom suspended Singh in late September after placing him on special leave in July following the CFO being linked to a series of questionable deals. These include transactions with Trillian Capital Partners, a local partner of US consulting company McKinsey & Co. that had links to the Guptas, wealthy businessmen working with President Jacob Zuma’s son who are alleged to have used their relationship with the leader to win lucrative contracts from state companies. They all deny wrongdoing.
The government appointed a new board for the utility at the weekend to try address governance concerns raised by lenders, who told the company to fix issues before they would make more funds available. The new board includes high-profile South African executives including Telkom Chairman Jabu Mabuza, who was named chairman at Eskom, as well as Imperial CEO Mark Lamberti and former MTN Group CEO Sifiso Dabengwa.
The utility is spending billions of dollars on delayed power plants and is the largest recipient of state guarantees at a time when South Africa’s finances are buckling under lower tax revenue and higher debt. Goldman Sachs said in September that Eskom, which has more than R400 billion due in interest and debt payments in the next five years, was the biggest single risk to the economy and that the government needed to replace its management.
Eskom will ask banks for funding commitments to return its liquidity buffer to the required 20 billion rand, spokesman Khulu Phasiwe said by phone on Monday. The yield on the Eskom bond due in January 2021 fell two basis points to 5.53% by 9:10 am in Johannesburg on Tuesday, adding to a 37 basis point drop on Monday. This takes the rate to the lowest since November 7.
Singh is due to appear before lawmakers who sit on the portfolio committee on public enterprises, which is holding an inquiry into the problems at Eskom.
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