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Former Eskom company secretary Suzanne Daniels told the Zondo commission that the questionable R1.68bn guarantee given to Gupta-owned Tegeta Exploration and Resources It was a better deal for the electric company.
Daniels was testifying in commission Friday afternoon, being questioned by lead evidence advocate Pule Seleka about the legality of the deal.
He said that the alternative to the deal would have been an advance payment of coal to the same company for R1.68bn.
The Sunday Times first reported on the dubious deal in 2017 after former chief financial officer Anoj Singh, a well-known Gupta associate, was placed on special leave.
At the time, the newspaper reported that the guarantee had helped Tegeta Exploration and Resources buy Optimum Coal in December 2015.
The board had authorized Eskom executives to negotiate an advance payment to Optimum Coal for the delivery of coal.
“Issuing a guarantee, oddly enough, was actually a better risk mitigation factor for Eskom because … imagine that if we had paid the vendor the cash, there would have been bigger problems,” Daniels said. .
She had supported the decision because it was a better option for Eskom to keep the cash at the time.
“We would have given 12 months of cash, actually,” he said.
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