Home Economy OUTA lays charges against suspended Eskom ex-boss Koko

OUTA lays charges against suspended Eskom ex-boss Koko

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Johannesburg – The Organisation Undoing Tax Abuse (OUTA) on Thursday said it laid criminal charges against suspended Eskom boss Matshela Koko regarding a series of irregularities, corruption and fraud.

“We have built a solid case against Koko with evidence of misconduct in his role as an Eskom executive and his relationship with the Guptas,” said OUTA chief operating officer Ben Theron.

Koko is accused of using his position at Eskom to help the Guptas to buy Optimum Coal Holdings and its Optimum and Koornfontein coal mines from Glencore, by helping put those businesses under financial pressure to force the sale to the Guptas and helping fund the Guptas’ purchase.

Koko is the latest Eskom executive to be targeted by the organisation after charges were also laid against a number of other Eskom bosses, including Anoj Singh

Oversight of coal contracts

Koko was placed on special leave in May pending an investigation, when it was revealed that a company at which his stepdaughter was a director at netted at least R1bn in contracts from Eskom in just 11 months.

In December Koko was appointed as interim CEO of Eskom, after Brian Molefe’s tearful resignation. He had been an Eskom executive since 2014 and in October 2015 he became the executive in charge of generation, which includes oversight of coal contracts.

OUTA outlined Koko’s involvement in the suspect deal. It said Optimum had a coal supply agreement with Eskom and had been involved in a dispute with Eskom for some years over the quality of the coal supplied and the contract which forced Glencore to sell its coal to Eskom at a huge loss.

Eskom fined Optimum R2.177bn in penalties and, in July 2015, made legal demand for full payment.

By this time, the Guptas had already made an anonymous offer to buy Optimum but were rejected, OUTA said. “The demand for the penalties payment was apparently the last straw financially for Optimum, which went into business rescue on 4 August 2015.”

In December 2015 Glencore, Optimum and the business rescue practitioners signed an agreement to sell the Optimum mines and assets to the Gupta businesses Oakbay Investments and Tegeta Exploration & Resources for R2.15bn. This deal had to be paid for and finalised by March 30 2016.

In the same month, Tegeta emailed Koko referring to the need for a prepayment confirmation, OUTA pointed out.  In the mail he asked him “to kindly send us a written confirmation regarding the payment for supply of coal amounting to R1.6bn … detailing the agreed terms and conditions”.

Manipulated coal supply

During December last year, Koko engineered a coal “emergency” by manipulating the coal supply situation, removing Just Coal as one of its suppliers, OUTA said.

“Using emergency procurement procedures, Eskom signed new coal supply agreements with Tegeta and, between January 29 and April 26 2016, paid Tegeta R1.2 bn on these contracts including prepayments; a large part of this was used to fund Tegeta’s purchase of Optimum,” according to the organisation.

“This was particularly useful to Tegeta when it failed to meet the initial March 2016 payment deadline and needed funds for the shortfall in April. Eskom also provided a R1.6 bn guarantee to Tegeta to help its funding situation.

“The #Guptaleaks emails had revealed that in January 2016, Koko took a trip to Dubai where he stayed in the Oberoi Hotel, all at the Guptas’ expense. This underlines Koko’s close links to the family.”

Penalty waived

Throughout the Optimum financial collapse and subsequent sale, Eskom had insisted that the R2.177bn penalty would not be waived for Glencore or any new owner. But in July at a media briefing, Eskom confirmed that the fine had been reduced to R577m, blaming a crusher for the faulty analysis.