Business Leadership South Africa (BLSA) has slammed the reappointment of Matshela Koko and Prish Govender at power utility Eskom, saying this flew in the face of complying with the rule of law and undermined efforts to restore confidence in the economy.

BLSA said it was shocked and dismayed that Public Enterprises Minister Lynne Brown had approved the decision, which Eskom confirmed on Wednesday, to reinstate Koko into his former role as group executive of power generation and Govender as acting group executive for group capital after they were cleared in disciplinary hearings.

Koko faced six charges, including of failing to declare a conflict of interest after a company in which his stepdaughter had shares was awarded a R1-billion tender by a division he led.

Govender was implicated in allegations of impropriety over payments worth more than R1.5-billion made to McKinsey/Trillian without any contracts.

In September 2017 BLSA, which represents 80 of South Africa’s largest businesses and multinational companies, suspended the membership of Eskom  after it was implicated in graft involving state firms, or “state capture”,  but later rescinded the decision. 

In a statement issued late on Thursday, BLSA chief executive Bonang Mohale said Eskom’s latest move showed a failure to hold company executives accountable and would hurt efforts by business and labour to work with the government in restoring confidence in South Africa’s economy in the wake of credit rating downgrades.

“Mr Koko, who has until now been undergoing a sham internal disciplinary inquiry of serious allegations of failure to declare conflict of interest, has yet to answer satisfactorily to these and claims made against him by the Parliament’s inquiry into governance failures at Eskom,” Mohale said.

“Not only is his reappointment inappropriate but also diabolical and a snub to millions of South Africans who are victims of the state capture project which has diverted billions of taxpayer’s rands into private pockets.”

He said the decision also showed Minister Brown’s poor grasp of governance, Eskom’s role in the economy and the potential contagion on the rest of the economy.

“She continues with absolute impunity to ensure that State Owned Enterprises under her control are still systematically saddled with hurriedly promoted, usually untested, and largely incompetent and often corrupt ‘cadre deployments’ where performance is not even expected,” he said.

By returning both Koko & Govender, as well as retaining Zethembe Khoza as chairman of the board of Eskom, Brown had failed to meet investors’ and regulators’ expectations of high governance standards, he added.

BLSA  was reiterating its call for a complete overhaul of the Eskom board members and “captured” executives, Mohale said.