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Corruption Watch (CW) questions Eskom’s media statement of 15 April 2020 on the chief operating officer (COO), Jan Oberholzer. The statement in question is reproduced at the end of this document.

The organisation has previously identified factually incorrect statements by Eskom. 

The whistle-blower who approached CW raised concerns about victimisation with respect to a prior grievance lodged against Oberholzer in September 2019. He also raised concerns about being victimised for lodging the grievance and for making a general protected disclosure on business irregularities to the Commission of Inquiry into Allegations of State Capture (Zondo commission). 

Since his disclosure, the Zondo commission recommended that Eskom not make a payment to a contractor for the claims it had instituted against Eskom. Eskom responded to recent media articles on this matter which is now the subject of a court case.

As reported in the media, “Eskom subsequently confirmed that Aveng had launched a High Court claim for the payment of R40 million related to the Majuba rail project but appeared to dispute that the project had been completed… Whether the contract was completed or not is for the court to decide,” Eskom said via email. Eskom declined to comment on the reason for not paying Aveng the amount allegedly owed, or if it is denying that this amount is owed to Aveng. “This matter is before court and accordingly the principle of sub judice applies,” it said. 

It is, however, clear that Eskom’s decision to not pay Aveng was due to the whistle-blower’s disclosure to the Zondo commission in June 2019. Had it not been for the whistle-blower’s intervention and subsequently Zondo’s intervention that recommended Eskom not to pay, the claim would have been paid – potentially adding to Eskom’s troubled history of irregular and wasteful expenditure.

The whistle-blower’s concern related to the fact that the Eskom COO has initiated charges against him relating to his prior grievance against the COO, which was lodged in September 2019.  The matters in that grievance were ventilated with a senior counsel appointed by Eskom, and settled. The subsequent charges raised by the COO, after the closing of the whistle-blower’s grievance, was a grossly inappropriate practice in terms of Eskom’s grievance procedure. 

The whistle-blower, who held the post of General Manager: Mega Projects, has now been moved to Eskom’s human resources division in an apparent attempt to eliminate him from the operational space where he reported to Oberholzer. In addition, this was done while the employee was on sick leave. This smacks of the type of victimisation often inflicted on whistle-blowers, and raises questions of why Eskom would allow such unlawful labour practices to ensue. 

All other allegations on Stefanutti Stocks, Black & Veatch, etc were never the subject of the whistle-blower’s complaint and disclosures.

Moreover, from a transparency and good governance perspective, Eskom should have shared the senior counsel’s report exonerating the COO with the whistle-blower, affording him a right of reply prior to issuing their self-serving media statement.  

A full forensic investigation did not take place in this matter and Eskom’s rush to clear its COO by way of this media statement is both curious and concerning. The release of the media statement before affording the whistle-blower an opportunity to review the report contradicts Eskom’s claim to be “committed to the highest principles of ethics and good corporate governance.

For media queries, please contact:

Phemelo Khaas:             083 763 3472   

Senior Counsel clears Eskom Chief Operating Officer of corruption, dishonesty, abuse of power
15 April 2020
After a series of allegations of corruption, dishonesty, conflict of interest and abuse of power were levelled by an employee against Eskom’s Chief Operating Officer (COO) in both the media and to some civil society organisations in March this year, the Eskom board appointed an external Senior Counsel to conduct an investigation into the allegations and to advise the board and the Group Chief Executive Officer on the way forward.

The Senior Counsel was entitled to interview any person, to review any documentation, including documentation provided by any Eskom employees and third parties that he deemed appropriate for the purposes of the investigation. The Senior Counsel commenced his investigation from 20 March 2020 and his report was submitted to the Board on 4 April 2020.

In his Terms of Reference, among others, the Senior Counsel was briefed specifically to investigate:
Whether there was any undisclosed conflict of interest by the COO pertaining to Stefanutti Stocks, or any other entity, which may potentially result in breaches of the Conflict of Interest Policy of Eskom; whether since his return in 2018 to Eskom, the COO in his dealings with any functionaries of Stefanutti Stocks breached his fiduciary duties and any policies of Eskom; whether there is any corruption or personal benefit derived by the COO arising from the placement of the Black and Veatch contract in 2007, or subsequently from his involvement in the Black and Veatch contract; the circumstances that led to the complainant being transferred from his position as General Manager: Mega Projects (Capital Division) to the Human Resources Department and whether such transfer was done in accordance with the applicable Human Resources policies of Eskom.

The Senior Counsel conducted his investigation by interviewing witnesses and reviewing the information and documentary evidence provided by the witnesses, including the complainant and other Eskom officials.

On 04 April 2020 the Senior Counsel submitted his findings to Eskom and the board has considered the findings.

The Senior Counsel has found no basis to the allegations of dishonesty, corruption, conflict of interest and abuse of power levelled against the COO. With regard to the allegations of a conflict of interest regarding Stefanutti Stocks, the Senior Counsel found that proper disclosure had been made of Mr Oberholzer’s shareholding in Stefanutti Stocks, and that “this is not a matter in which he should face a disciplinary hearing”.

In considering the Black and Veatch contract, the Senior Counsel could “find no fault or other improper conduct on the part of Mr Oberholzer insofar as this transaction is concerned.”

With reference to the transfer of the alleged whistle-blower, the investigation could “find no wrongdoing in the process followed by Mr Oberholzer in this regard.”  While the investigation found that the relationship between Mr Oberholzer and the employee who made allegations of victimisation had been characterised by tension, the Senior Counsel did “not find that there was victimisation or that any further legal processes should follow”.

Eskom is defending a claim of R42 million against Aveng, which is scheduled to be argued in the South Gauteng High Court during May 2020. The Board will therefore await the outcome of these proceedings before deciding whether there is a need for any disciplinary action against any employee.

On all the other allegations against Mr Oberholzer that were put before the Senior Counsel, the Board is satisfied that these have been fully and adequately ventilated and investigated, and that there is no cause for any action against Mr Oberholzer. The Board is committed to the highest principles of ethics and good corporate governance, and will investigate any and all allegations made against any Eskom employee, regardless of their position or seniority. 

Issued by Eskom Media Desk, 15 April 2020