SIU cracks whip on +5 000 dodgy Eskom employees for various offences

Written on 10/22/2020
Denise Mhlanga

An investigation into conflict of interest at Eskom has revealed that 324 employees are linked to entities that are Eskom vendors.

According to the Special Investigation Unit (SIU), a total of 5 523 Eskom employees are being investigated for various offences. These relate to failing to declare personal interests, and doing business with Eskom.

Sikonathi Mantshantsha.

Of these employees, 5 452 failed to submit declarations, and 60 were found to have conflicting interests. The SIU presented the findings at the Standing Committee on Public Accounts (Scopa) in Parliament last week. Investigations into Eskom commenced in August 2018.

Head of SIU, Adv Andy Mothibi says on disciplinary referrals, conflict of interest is where it all goes wrong. Interfering with procurement processes, and deliberate management of contracts by Eskom management led to some of these offences.

The SIU’s areas of investigation into Eskom include the following:

  • 135 officials who are doing business with Eskom valued in excess of R6 billion
  • 34 red-flagged former or current Eskom employees
  • 5 452 officials who failed to submit their declaration of interest
  • 3 Tegeta Coal Supply Agreements (CSA) namely Brakfontein, Optimum and Koornfontein. The contract worth R3.7 billion for Brakfontein CSA was declared by the High Court. This followed an application by the SIU. Eskom seeks to recover nearly R1 billion as a result of delivery on non-compliant coal. The SIU and Eskom have instituted action against 12 parties in relation to the Optimum Coal Mine purchase by Tegeta (R3.8 billion).
  • 20 build contractors (29 packages contract packages at Kusile (21), Medupi (5) Matla (1), Majuba (1) and Ingula (1) have been red-flagged for investigation. Of these, investigations into 19 are ongoing, and the remaining 10 are still pending.
  • 14 coal transportation service providers
  • 7 diesel suppliers
  • 2 contracts for cloud computing software support and licences. SIU has evidence pointing towards payment of kickbacks valued at R100 million. This was paid to a sub-contractor to secure Eskom contracts for contractor.
  • 2 engineering and project management contracts at Matla and Majuba power stations

Since 2018, Eskom has repeatedly said it would subject its major contracts to investigations. If evidence of criminal activity is found, law enforcement agencies would be involved, and contracts cancelled where possible, says Mantshantsha.

In addition, Eskom would attempt to recoup any losses resulting from these cases, says Eskom national spokesperson, Sikonathi Mantshantsha.

Investigation progress

Adv Mothibi told Scopa that the SIU investigation indicates consequence management on the part of Eskom. However, he says they would like to see this resulting in prosecution, and where possible, recouping some of the plundered funds. something which they take seriously. Adv Mothibi says 39 and 32 cases have been referred to the National Prosecuting Authority and Asset Forfeiture Unit respectively.

Adv Andy Mothibi.

Civil action has been instituted on two matters relating to the Brakfontein and Optimum mines. Assets to the value of R3.7 billion in the Brakfontein matter has been set aside. In addition, the value of matters in which counsel has been briefed is about R3.9 billion of worth of contracts.

“The SIU has assisted Eskom with a R400 million saving, and we hope to recover R8.74 billion.”

Conflicts of interest

Some 5 512 referrals were made to Eskom to institute disciplinary procedures. As of September 2020, 5 452 referrals of referrals who failed to submit declarations to the power utility. Of this number, 60 employees are doing business with Eskom or failed declare their interest outside of Eskom.

Disciplinary proceedings are still in progress against134 officials. Eskom has commenced disciplinary of 15 of its employees, and closed matters on six others. Four officials resigned, and Eskom management chose not to discipline the other four.

Mantshantsha says disciplinary procedures are taken against employees where wrongdoing is found in terms of Eskom policy.

34 officials red-flagged for further investigation

A lifestyle audit on the executives and managers conducted by ENS has red-flagged 34 employees to the SIU for further investigation.

Mantshantsha says hundreds of Eskom executives, managers and their immediate families were subjected to lifestyle audits to weed out ‘undesirable elements’ in the workforce.

“These lifestyle audits have been extended to the top 400 employees at managerial levels. Critical teams like those in the procurement and primary energy divisions are also subject to lifestyle audits,” says Mantshantsha.

He notes that few employees and their families have declined to go through the audits. Some cases have been referred to the law enforcement agencies like the SIU the South African Police Service (SAPS) for investigation on numerous allegations, says Mantshantsha.

“Over 100 charges of corruption have been filed with the SAPS, both against Eskom employees and suppliers to date,” says Mantshantsha.

Mothibi says eight employees have been referred to Eskom for disciplinary and seven have resigned. One of the employees who resigned is still under investigation for their involvement in relation to build projects. Adv Mothibi says 19 investigations relating to lifestyle audits are still ongoing.

“The SIU would pursue officials that have resigned if evidence points to criminal action.” Adv Mothibi says should   evidence prove participation in any action causing damage to Eskom, officials will be pursued as part of a civil lawsuit.

Eskom is cooperating fully with the investigation. “We both have the same objective to retain Eskom to its functionality to supply power effectively. To achieve this, corruption and irregularities should be dealt with,” adds Mothibi.