Eskom board called Singh to explain Gupta links

Investors concerned about governance.

Eskom interim chairman Zethembe Khoza on Thursday told journalists that the interim board called CFO Anoj Singh to explain following allegations that he was involved in awarding contracts to entities linked to the infamous Gupta family.

The allegations span his tenure at Eskom and previous at Transnet. Singh served as CFO at Transnet along with Brian Molefe who was CEO. After Molefe was seconded to Eskom in April 2015, he brought Singh with him in July of that year. Molefe has since controversially departed from Eskom.

Following the leak of thousands of emails about the business dealings of the Gupta family, allegations have been made that since 2014 Singh has travelled to Dubai on several occasions at the cost of the Guptas’ Sahara Computers.

A recent damning report by advocate Geoff Budlender further linked Singh to the payment of R250 million to Trillian, a company 60%-owned by Gupta associate Salim Essa. The payments were allegedly made without any contract being in place and there is doubt whether Eskom got value for the payment.

Khoza said at the signing of a $1.5 billion loan agreement between Eskom and the China Development Bank (CDB) on Thursday that the interim Eskom board has called Singh to respond to the allegations regarding Trillian. The board also interacted with the Transnet board about allegations of Singh’s wrongdoing during his tenure there.

Eskom signs R19.6bn loan agreement with China. Image: Moneyweb

Khoza said Singh “took us into his confidence” but would not disclose any detail. He said Eskom would issue a statement once the enquiry had been finalised.

Singh admitted that investors were concerned about governance issues at Eskom. He said Futuregrowth was the only investor that had suspended investment in state-owned companies due to governance issues. Eskom has had four or five engagements with Futuregrowth. The fund manager “is on a journey to lift its suspensions” and has recently lifted its suspension of investment in Sanral, Singh said.

He said local and international banks do robust due diligence and Eskom just last week completed such a due diligence with three international banks. He said the requirements were stringent and engagements robust. Findings are further independently reviewed. Singh said Eskom has been able to address the concerns of banks, bond markets and other investors.

Eskom has not seen a direct correlation between concern with governance and the cost of debt, Singh said. The cost is actually a product of the credit rating, and Eskom is working on the improvement of its stand-alone sub-investment grade rating, he said.

The $1.5 billion loan signed on Thursday is the second tranche of a $5 billion facility Eskom is working on with the CDB. Last year a R500 million facility was signed for working capital, while this new loan was for the completion of Medupi.

The loan has a five-year drawdown period and is repayable over 15 years, in semi-annual installments. Singh said the interest rate is competitive when benchmarked in the bond market and with other facilities under negotiation.

Singh said Eskom currently has R350 billion debt of which R254 billion represents utilised or committed government guarantees. Debt is expected to peak at R500 billion in the next five years, probably in year four.

Eskom “has an internal ambition” to release R100 billion of its R350 billion government guarantee, although the sovereign downgrade and lower than expected tariff increases might make that difficult, he said.

Eskom officials have just returned from meetings with investors abroad and have reported that there is significant appetite from international investors for Eskom paper. “We might take advantage of that in the next quarter,” Singh said. Eskom plans to access the debt market at least once a year.

Medupi units five and six are already in commercial operation and unit four has been synchronised to the grid, Eskom stated. Kusile unit one has also been synchronised. The projects are progressing in accordance to the revised construction schedule and within the revised budgets of R145 billion for Medupi and R161 billion for Kusile.

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“took us into his confidence” but would not disclose any detail. And you accepted that? Makes me wonder even more as to what is going on at Eskom??

Singh must sing like a canary!

“Eskom has not seen a direct correlation between concern with governance and the cost of debt”. How about ANY correlation?

Potential investors must be getting fooled by the planned price hikes that are due to hit consumers over the next few years. That’s where the ‘direct correlation’ is – it’s against Eskom’s captured consumers. After all, there isn’t exactly competition in this space…

And Singh is still working at Eskom?!! Well he’s already pulling the wool over the collective eyes of the new Board and the Zupta’s still have a key inside man at the utility.

I was wondering when the heat is going to be turned up on Singh.

This guys has been at the forefront of all the dodgy dealings being questioned at Transnet and Eskom, and as the CFO he is the “money man”. I would venture a guess that as a CFO he is more intimately involved in negotiations where money is involved.

If you are looking for an “enabler”, I think it would be worthwhile to investigate this guy…

Maybe he is the “blesser” in the woodpile

Singh has helped Dongfang South Africans with massive corruption.

Singh, Koko, Molefe, Ngubane and co need to be held accountable as people who betrayed their country. But lets not forget companies such as McKinsey who seem to have escaped the spotlight.

A bankcrupt organisation. We need the cheapest possible, really cheap, electricity to lift the poor’ s level of education etc. This sorry bunch have made it impossible and even the middle class cannot afford these tariifs any longer. Another ” We have a good story to tell” He he

Yes that’s right let us borrow our way into liquidation. Looking at historical forecasts and budget projection misses, I am very skeptical of anything these guys say. Many words very little to say.

Just words and no real information, despite s number of questions asking what rate of interest was applied. Evading answering specifically suggests it wasn’t great!

End of comments.

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