The Zondo Commission has questioned the timing of Tegeta’s demand for a prepayment which coincided with their difficulty to secure a R659 million funding shortfall for the acquisition of the Optimum Coal Mine.
Raymond Zondo, state capture inquiry chairperson, has expressed shock that Eskom’s board in 2015 mistakenly approved a R1.6bn prepayment for coal supply to Gupta-owned Tegeta.
Prof Pat Naidoo, former Eskom board member, has said the board approved the prepayment on 9 December 2015, having been under the impression that it was for Glencore-owned Optimum Coal Mine (OCM).
For a professor that was extremely stupid, or is he just a corrupt liar?
The submission to the board, however, clearly stipulated that the prepayment would be for “proposed owners” of Optimum, Tegeta Exploration and Resources. Raymond Zondo said it was “troubling” that a whole board of 12 members was so incompetent that it would allow such a costly lapse in oversight.
Naidoo said he at the time was under the impression that Eskom, which had been at loggerheads with Glencore, had made up its differences with the company. It was for that reason, he said, it was recommended that Eskom and Glencore release a joint media statement after the approval of the prepayment. Whaw!
The ‘professor’ said prepayment, the board believed, was beneficial to both Eskom and Optimum, which was under threat of liquidation, and that approving the prepayment was going to save jobs.
“I looked at the submission which motivated firstly that there is an agreement between Eskom and OCM, and that OCM requires cash in advance to give them liquidity so they can get on with their business,” said Naidoo, who chaired the Eskom investment and finance committee on the day of approval.
“They also said they are in the process of taking on more BEE partnerships. When we looked at that, we said prepayment is the practice of the business.
“The advance payment of R1.68bn was going to secure future supply of coal to Eskom and OCM was to cede unsupplied coal as security.”
Zondo was in disbelief that the Eskom board ignored a fundamental part of the submission, which clearly stated that the prepayment was for the benefit of OCM’s proposed owners.
“How is it possible that the entire board did not see this point? How could none of you say, but hang on, change this submission. What is troubling me is how it is possible for so many members of the board not to have seen what is written here in black and white,” charged Zondo.
The Zondo Commission, the investigation into crooks, looters and the Gupta-led organised crime (state capture) that almost completely destroyed most of state enterprises in South Africa and crippled its economy, continues.