South Africa

Politics, South Africa

The Life of Brian: Molefe out of Eskom…again

The Life of Brian: Molefe out of Eskom…again

Brian Molefe is out of his job as Eskom chief executive. This time not because he was stepping down in the interest of “good corporate governance”, as he put it in November 2016, but because Public Enterprise Minister Lynne Brown implemented a decision on Wednesday morning “in the interest of good governance” by an inter-ministerial committee established by President Jacob Zuma. The ministerial rescinding of the rescinding by the Eskom board of Molefe’s early retirement came after two weeks of public outrage - and mockery – and the weekend’s decision in favour of rescinding Molefe’s return by the ANC national executive committee (NEC). By MARIANNE MERTEN

There were plenty of questions remaining after the announcement, which came as the Eskom board was sitting in Public Enterprises Minister Lynne Brown’s offices at Parliament. Did Brian Molefe know he was out of a job? It would be up to the Eskom board to have “that conversation”, Brown said. Would he still get a pay-out? And what was the status of the decisions Molefe signed off in the week-and-a-half that he was back in the job? Those are questions still looking for answers, according to Brown: “I have an idea in my head, but let me not put my head on the table”.

It has been a torrid time for the minister, who has been publicly humiliated in the debacle. Last week Brown faced a barrage of criticism by Parliament’s public enterprises committee, which ordered a parliamentary inquiry into the circumstances of Molefe’s stepping down, only to return with a spell as ANC MP, all within some five months.

To recap:

Brown announced on 12 May that she had accepted the Eskom board’s decision to “rescind” Molefe’s early retirement because it was “a significantly better value proposition for the South African fiscus” than paying him R30-million in pension monies. Hence Molefe would return as Eskom chief executive.

That return happened quickly; in fact he was back at Eskom’s Megawatt head offices that Monday, just three days later. Molefe had resigned as ANC MP effective from 14 May, less than three months after being sworn in in late February. The move to the ANC parliamentary benches came after he, on November 11, 2016,  announced he was stepping down from the power utility with effect from January 1, 2017 in the wake of the public protector’s “State of Capture” report. The report linked him through over 40 telephone calls to the Guptas, and their business associates, at a time when Eskom was negotiating a coal deal with al Gupta-linked company. Molefe criticised the report as rushed and incomplete and publicly stated that at the right time he would be able to show “I have done nothing wrong and that my name will be cleared”.

But the outcry over Molefe’s return to Eskom did not die down when it emerged Molefe had not resigned as was widely understood, but took early retirement with a R30-million pay-out, reportedly because of a retrenchment clause in the Eskom pension fund. Even Brown had to admit, publicly, she thought Molefe had resigned; no-one had told her differently until a Sunday Times report in April.

At last week’s public enterprises committee meeting, Eskom board chairman Ben Ngubane told MPs the reason for the significant pay-out was that the power utility had agreed to buy out a decade of pension monies for Molefe as part of his chief executive contract because he had been moved from the Public Investment Corporation (PIC), to Transnet and then Eskom.  “We had a signed agreement. We bought him 10 years,” Ngubane said.

And Brown told MPs there was little she could do because Molefe’s contract was signed under the 2014 memorandum of incorporation (MOI) that did not give her a say in contractual arrangements, rather than the 2016 MOI which did.

All that’s now out of the window. A week after the inter-ministerial committee of the finance, justice, energy and public enterprises Cabinet members was established – and three days after the weekend ANC NEC.

“The NEC reaffirmed that the decision to reappoint Comrade Brian Molefe to Eskom be rescinded and not to wait for the courts to direct them on this decision. Government itself encourages judicial overreach when it fails to lead when it should,” the ANC said in a statement on Monday.

On Wednesday, the inter-ministerial committee – Finance Minister Malusi Gigaba, Justice Minister Michael Masutha, Brown and Energy Minister Mmamoloko Kubayi presented a united front.

The Eskom board’s decision to allow Molefe to return was wrong. With regards to the financial pay-out, the Eskom board used the wrong provision, meant for retrenchment.

“Mistakes were made in good faith,” said inter-ministerial committee convenor Masutha.“It will be in best interests in government, Eskom and the country that the Minister of Public Enterprises directs the board to rescind the re-appointment of Mr Molefe.”

In no way was this a reflection on Molefe’s capabilities, according to Masutha and Gigaba, who added: “If mistakes are committed by the board of a state-owned entity, the stakeholder (government) must intervene and self-correct… We are taking this decision in the best interest of our country and public”.

Gigaba, however, acknowledged the Molefe debacle had been damaging. “It has caused government a lot of harm, reputational damage…”

Brown said she had requested the Eskom board to give her two names from among its executives so an acting chief executive is appointed within 48 hours. And the Public Enterprises Minister added that she was looking at the possibility of “rotating” board members.

And so it may not be the end of the Molefe saga. The Eskom annual general meeting is set down for 23 June. DM

Photo: Brian Molefe (EE Publishers)

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