Eskom CEO Brian Molefe resigns

‘I want to reassure the country that I will work closely with the board to ensure that the company remains stable’ – Brown.

CEO of Eskom for the past 20 months, Brian Molefe, has resigned ‘in the interests of good corporate governance’, as of January 2017.

 

In a statement sent to the media on Friday afternoon, he said: “I do so voluntarily: indeed, I wish to pay tribute to the unfailing support I have had since I took up office from the chairman, the board and with those with whom it has been my privilege to work. Together we brought Eskom back from the brink.”

On November 2 2016, the Public Protector’s office released former Public Protector Thuli Madonsela’s ‘State of Capture’ report, which included concerns around the sale of the Optimum Coal Mine and Eskom’s advance to Tegeta. Eskom Chair, Dr Baldwin Ngubane  had previously stated: “Regarding the continued innuendo that Eskom has been giving special favours to Tegeta Exploration and Resources, the Eskom Board stands firm by the processes undertaken by the company to conclude extensions of its coal supply agreements with its suppliers. We are satisfied that due process had been followed and we can be proud of the savings achieved by the executive team to date.”

Read more about the Optimum/Tegeta story here: State of Capture is nonsense – Eskom and It pains me that I haven’t been heard – Eskom CEO.

Molefe had accused Madonsela of double standards, in not affording him an opportunity to explain himself before implicating him in the report.

On Friday Molefe said: “the report did not make any finding. Instead it made what were termed ‘observations’, based, (the report acknowledged), on an investigation not completed. It deferred a proper investigation to a commission of inquiry to be established at a future date. The outgoing Public Protector has directed the President – in whom the Constitution vests the power to appoint commissions of inquiry – to appoint one, and further directed the chief justice to designate a particular judge to head it.

“It is a matter for regret that the report was prepared in haste to meet a deadline related to the Public Protector’s own departure from office. That her office continues, as all State offices do, and that any uncompleted function is completed by a successor in that office, was not a consideration in the report.

“’Observations’ made in the report relating to, inter alia, my conduct, are in material respects inaccurate, based on part-facts or simply unfounded. What the previous Public Protector has done is not herself to investigate to completion, or to allow her office to complete what she initiated too late to complete herself.

“She has also determined on recording ‘observations’ without, in crucial aspects, putting intended harmful disclosures to me first – as she was by law required to do. She has effectively deferred my Constitutional right to be heard to a future date, and to a future body, which she has ordered others to assemble.

“If such a body is indeed by law to be assembled, and carry out the task, it will not be for some time – as recent experience indicates.

“In the meantime harm is done – to the institution it has been my honour to lead in the most difficult times, to its reputation and to my own. I say nothing of the harm, too, to others close to me.

“I am confident that, when the time comes, I will be able to show that i have done nothing wrong, and that my name will be cleared. I shall dedicate myself to showing that an injustice has been done by the precipitate delivery of ‘observations’, following an incomplete investigation, which the former Public Protector has drawn back from calling ‘findings’. The truth will out.”

“I wish to reiterate that this act is not an admission of wrongdoing on my part. It is rather what I feel to be the correct thing to do in the interests of the company and good corporate governance.

Madonsela told Moneyweb: “All I can say is I recorded what I had by then and left findings to a judicial commission of inquiry. If Mr Molefe and other affected parties allow that process, they’ll have an opportunity to clear their names.”

Molefe said he will take time off to reflect before deciding on his next career move. 

Prior to his appointment at Eskom, Molefe was CEO of Transnet, worked in the Limpopo premier’s office as well as Airports Company South Africa.

‘Regrettable but understandable’

Eskom Chairperson Baldwin Ngubane said the decision was “regrettable but understandable”.

The State-owned power utility stated that since his appointment, Molefe and his executive management team had turned the company’s operational and financial performance around, with 15 months of no load shedding.

“The improved performance of the power generating units coupled with additional capacity from some of our new build projects has resulted in a stable power system, with excess capacity being exported to neighbouring states.

“The company’s liquidity position has also improved significantly, with liquid assets increasing by 81.6% from R24.1 billion a year ago, to R43.8 billion at 30 September 2016 in the face of CPI growth reported to be 5.1% as at 1 April 2016. The group has access to adequate resources and facilities to continue as a going concern for the foreseeable future.”

Once agreed upon with public enterprises minister Lynne Brown, interim leadership arrangements will be announced.

Reaction

Brown said she is saddened by the announcement, but respects his decision.

“Mr Molefe has been instrumental in developing Eskom’s turnaround strategy which is beginning to yield positive results and it is disappointing that he will not be present to see it to complete fruition. I want to reassure the country that as shareholder representative, I will work closely with the board to ensure that the company remains stable.

“I am confident that Mr Molefe leaves a strong executive team in place to continue to deliver on Eskom’s mandate and implementation of the turn-around strategy. He leaves the company at a time when Eskom’s mid-term results showed an improvement.

“…Eskom managed to connect 99 869 households to the grid for the period under review and the company must be congratulated for connecting more households in 22 years of democracy to the grid than the previous 70 years of minority rule”.

Corruption Watch said it welcomes the decision and regards it as being in the best interests of Eskom. “Its prominence as a major State-owned enterprise requires that the public has confidence in its operations, functioning and leadership.

“The allegations against Molefe, both in the media and the State of Capture report, must however continue to be the subject of inquiry by the pending judicial commission of inquiry into state capture, and should also be investigated by the relevant law enforcement authorities.

“Corruption Watch also emphasises that any alleged irregular or criminal conduct on the part of Molefe was not possible without the consent of the board of Eskom, specifically the Chairperson of the Board, Dr Ben Ngubane. The organisation urges the members of the board to consider whether their continued leadership of the parastatal is in fact in the best interests of Eskom.”

In a reactionary note on Friday, Peter Attard Montalto, head of emerging Europe, Middle East and Africa economics at Nomura International, said Molefe had no credibility left after the report, “regardless of them being proven or not allegations”.

“Brian is the fallen angel for investors coming out of Transnet as a hero and now implicated in alleged grand corruption and rent extraction by the PP report. In a way its sad, in a way its not. He ultimately was successful because he could navigate the patronage realities of the ANC but it has caught up with him.

“We need to understand however the the rot in Eskom goes much deeper – the whole board needs to be replaced and there are many others there also implicated in the PP report.

“I would expect someone similar to be appointed. I do not see this as a positive. They will appoint someone equally as willing to facilitate rent extraction and ensure nuclear success and as long as the board is in place and other senior management nothing changes. If the CFO is appointed CEO that is not positive and would be a sign of status quo.

“The last ‘good’ CEO (Tshediso) was out after just a few months because he was too clean. They won’t make that mistake again. The question is if we get someone obviously ‘dirty’ or someone (like Brian) who on the surface looked fine but was allegedly turning the mechanism of patronage beneath the surface. The level of scrutiny suggests latter is most likely but let’s watch see.”

 
Social media reacted swiftly: 
 
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Ja no well fine

One domino down – only another 11 million to go

It’s all very well tweeting about doing the honorable thing, but why was he offered the position in the first place? Another Zuma “Yes Minister” farce. CEO’s of big organisations simply do not compromise their positions by being seen in shebeens and crying for the media. Now we just wait on the fish at the head which is stinking worse than after we had that big fire at some fish warehouse in Cape Town a few years ago.

Goodbye and good riddance!!!

Wonder if he is leaving Eskom to take up the CEO position at Saxonworld shabeen….just dont tell his wifey.

If he was clean like Gordhan he would have stayed and proved it.

this is the start, and I think we are going to be very surprised at who all get torched. Tokyo was very quick to appoint his own investigator, who will no doubt issue a clean report in exchange for a few ronds…….

We need to do a search for shorting of the rand by Trillion Capital around the time of the weekend special last year….

Perhaps he has been offered the position Zuma intent creating when he fires Gordhan?

What are the odds on Brian Molefe becoming the Finance Minister? And think carefully before you answer – remember what was said about Donald Trump not getting voted in as the USA President.

Scary!!! The bit that really gets me is that “Molefe said he will take time off to reflect before deciding on his next career move”.

He would not have walked without an alternative on the table (under the table). Some other ‘Yes Baas No 738, anything you require’ type position is lined up – maybe even Finance Minister. Could be a Dubai or India position (getting out of the country could have its own attractions too).

I think though that the Trump lesson is that we can expect a massive rise in the populist movement in SA as globally people are shying away from the status quo. The ANC had their warning via the municipal elections, but suffer from excessive (pathological) tunnel vision and have not caught it yet. Of course the BIG populist is Malema (SA’s own ‘baby Gupta’). Heaven help us is this trend fully manifests here at home.

Yes, but they have controls in the USA. The electoral college system actually works. I always thought it was a bit of a joke, but it does seem to reflect the mood of the popular vote. Brexit was also a bit of a joke until they woke up and smelt the coffee. Zuma has gone as far as he dares. He’s already facing life imprisonment once the ANC presidential elections are over, if not sooner. They are going to drop him like a hot potato. They are just waiting for the right moment. To do anything precipitous now would get them shifted away from the trough, so they are waiting for someone or something else to fall off the cliff. The ANC elections are a perfect excuse – no sir, not me, sir.

And Matshela Koko….

And Ben Ngubane

And Uncle Tom Cobley and all (that iz if you iz from the Zouth West of England, like me zur).

If the board stays I have no doubt that Eskom will blackmail SA as they did in the past. Tariff increase or blackouts. When blackouts start it will be Thuli’s fault. This lot accountable for nothing.

a few idioms come to mind: “meng jou met die semels en die varke gaan jou vreet”…no honour among thieve.

No sympathy for these agterbaksels

Probable motive for Molefe:- Resign in January gives enough time to sign off on nuclear deal and then take over as Fin Min when PG arrested in December / fired in January.

End of comments.

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