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Former Eskom Legal and Compliance Chief Suzanne Daniels testifies before the Zondo Commission in Johannesburg on December 7, 2020 (Photo: Gallo Images / Papi Morake)
In December 2015, Eskom’s board agreed to prepay Optimum Coal R1.68 billion to ensure that power plants could keep the lights on, but the deal was structured to benefit Gupta’s acquisition of the mining company and the officials approved their contributions. Former Eskom company secretary Suzanne Daniels said she would have acted differently, in hindsight.
Eskom’s former chief legal and compliance officer Suzanne Daniels told the Zondo Commission of Inquiry into State Capture that, in hindsight, she would have asked more questions regarding the 2015 board’s decision to prepay Optimum Coal R1. .68 billion, which included Gupta’s obvious influence. family.
“At the time, I just didn’t want to upset the apple cart. Now when you look back, I should have, ”he said Monday.
Daniels returned to testify about Eskom’s prepayments to Tegeta Exploration and Resources, which facilitated the Guptas’ acquisition of Optimum. His testimony Monday focused on the board’s decision from December 2015, the precursor to next year’s payments.
He said he took minutes at a meeting on November 24, 2015 between former Eskom group executive for generation Matshela Koko, Oakbay Gupta associates Nazeem Howa, Ashu Chawla and Ronica Ragavan, Optimum Coal’s business rescue leader, Piers Marsden, and a representative from Glencore, Optimum’s parent company.
Eskom leaders had been lobbying Optimum to sell its Optimum Coal Mine (OCM) to Tegeta since Brian Molefe had been appointed CEO of the power company earlier in the year, but during the meeting, Daniels said, Koko told The business rescue professionals that the sale should include all of Optimum Coal Holdings (OCH) assets.
In early December 2015, shortly after the meeting, Daniels wrote a letter from Koko to the Director General of the Department of Mineral Resources, Dr. Thibedi Ramontja, which presented a dire picture, accusing Optimum of threatening the supply of coal to Hendrina, Arnot and Komati. power plants.
Ramontja has testified who found a draft reply to Koko in his inbox – he didn’t know who wrote it – suggesting that the transfer of mining rights should be sped up and that an advance payment for coal should be considered.
Ramontja knew the problems and signed the answer without thinking that there were alternative motives. His letter was used as justification for the board’s decision to prepay Optimum R1.68 billion, which never happened.
The Eskom board members approved the advance payment through a round robin process on December 9, 2015. They made their decision based on a presentation that Daniels had submitted, which was approved and prompted by Koko and Anoj Singh, who was Eskom’s interim CFO and CEO at the time, motivator for prepaid.
That submission to the Eskom board members had already passed through the leaders of the Regiments linked to Gupta.
Eric Wood and Mohammed Bobat and other employees of the Regiments commented on the document sent to the Eskom board members, how to remove references to adhere to the Public Finance Management Act (PFMA) and that the document should be sent to the Eskom board in lieu of the Investment and Finance Committee (IFC).
Comments from the regimental leaders made their way into the presentation to the board.
The title of the board presentation referred to a pre-purchase proposal with Optimum, but the detail referred to the company’s proposed paying buyers, who were not identified.
There is no legitimate justification for accepting the R1.68 billion prepaid figure.
It was suggested that it could be used to cover Optimum’s rehabilitation costs, money that mines pay to lessen their environmental impact when they finally close. There have also been claims that the amount was linked to Optimum’s debts to creditors or capital expenditure costs.
Optimum’s business rescue professionals have testified that they were not consulted about the R1.68 billion and that it was not related to their debts, rehabilitation fund requirements or capital expenditures.
However, the amount matched the amount the Guptas needed at the time to buy Optimum.
“At the time, I didn’t really cross-examine the letter to that degree, ”Daniels responded to a question about whether he had questioned the presentation to the board regarding the need for the funds.
The deal was referred to Eskom’s IFC, which approved the deal within hours of seeing the details, and board member Pat Naidoo praised it as a positive development for Optimum, Eskom, and South Africa, and even suggested that leaders of Glencore and Eskom issued a joint statement.
“In IFC’s mind, was this resolution for the carbon prepayment related to Optimum and not Tegeta? ”Asked test leader Pule Seleka.
The day after Eskom’s board approved the deal, Singh unilaterally decided that it should become a guarantee to benefit Tegeta rather than a cash payment to Optimum. Although Tegeta was never mentioned in the board’s decision, it was to receive a profit of R1.68 billion.
“It is not made by the board, it is not made by Eskom, it is made by Mr. Anoj Singh and he is doing it in favor of a completely different entity, ”said Seleka.
“So would this guarantee have been given for an ulterior motive or purpose? “He posed for Daniels.
“That is the only conclusion that can be drawn, yes, ”he said.
The behind-the-scenes parties quickly got to work on the details of the deal. Koko forwarded the correspondence to a “Business Man” email address, which Daniels suspected was from Gupta’s agent, Salim Essa, setting out the terms of the adopted agreement.
Daniels, despite the duties that his job required, did not question the terms of the deal, which clearly came from outside the state entity. The chairman of the investigation, Supreme Court Vice President Raymond Zondo, was appalled.
“What I witnessed that year and knowing what Mr. Essa was capable of, I was very careful,” Daniels said.
Zondo couldn’t understand why Daniels didn’t ask Koko who the Businessman was.
“I just want you to understand that the mood was very, very different from the ordinary corporate environment and especially if you want to appear friendly,” he replied.
Eskom never paid Tegeta the 1.68 billion rand, and Daniels said it became a guarantee to protect the interests of the state-owned company.
But without the December 2015 deal, it is unlikely that in April 2016 Eskom would have prepaid Tegeta R659 million, the balance the Guptas needed to acquire Optimum.
Koko, who appeared at the commission last week, has denied the accusations against him. He claimed that the commission was “following the people, not the evidence.” He is scheduled to return on December 11.
Daniels will also be back soon to further testify on how Tegeta received its R659 million prepayment.
Beginning his testimony Monday, Daniels complained that he was the scapegoat of Eskom’s most influential members after making disclosures to aid investigations.
“It would appear from my treatment that unless you are a whistleblower who has not made exactly zero mistakes, you are likely to become the object of contempt. Very few whistleblowers are pristine. Very few of us wear a halo and yet we try to do the right thing and expose the bad deeds even when part of the exposure may affect our own reputations, ”he said.
“By virtue of my role, these decisions flowed through me, and for this reason, I am a useful scapegoat for some of them.”
The investigation will continue to hear evidence related to Eskom this week. DM
