Public Enterprises Minster Lynne Brown
Photo by: Duane Daws
Public Enterprises Minister Lynne Brown on Wednesday told MPs she had received a report from Eskom about its dealings with Trillian and McKinsey which she demanded after it emerged that the power utility had lied to Parliament, but made plain that she will not act against the leadership of parastatals on the basis of leaked emails.
Brown told Parliament’s portfolio committee on public enterprises she received Eskom’s report on Tuesday evening, after several delays when the company failed to provide sufficient clarity, and would ask her department’s legal department to scrutinise it.
She added that she deplored Eskom’s misrepresentation about payments to Trillian, a company tied to the Gupta business empire, saying: “I regard Eskom’s lies as an assault on our democratic system.”
Brown then faced questions from MPs, including former finance minister Pravin Gordhan, about ensuring the independence of the boards of state-owned enterprises and dealing with a wealth of allegations that have emerged about parastatals being milked by politically-connected businessmen.
Gordhan noted that in the case of Eskom, these were not limited to Trillian, which is reported to have received R1.6-billion from Eskom for no clear benefit after it was brought in by McKinsey as an empowerment partner on a contract with the utility.
“Is she going to equally reprimand Eskom for Tegeta and other misdemeanours?” he asked, noting that he was using that term euphemistically. Gordhan was referring to findings by former Public Protector Thuli Madonsela that Eskom had bent over backwards to give a lucrative coal contract to Tegeta Exploration, which is owned by the Gupta family.
He said he also wanted to know if she planned to reprimand the chief executive and financial officers of Denel for trying to forge ahead with a joint venture with a business partner of the Guptas in defiance of National Treasury and how she would ensure the independence of the new Eskom board she said she planned to appoint in November.
“What can we expect from the minister? What process is being followed to appoint the new board, the appointment of boards is tainted both by her predecessor and herself,” he asked.
“How clean is this board going to be?”
A weary Brown replied that she intended to vet future board members as best she could, but that as far as the present board was concerned, she had read allegations in the media and not seen evidence.
“I will not appease those baying for heads of those on basis on leaked emails. It is not as simple as a board game, last I looked people were still considered innocent till proven guilty,” she added.
Gordhan then asked how in a context of state capture pervading, state-owned enterprises, other institutions and law enforcement agencies as well as government would get to a point where those implicated were charged and finally found guilty.
“State-owned enterprises have become the feeding troughs for all sorts of interests, billions of rands have disappeared. The department cannot be pleased about that.”
Brown again replied that she saw Eskom’s biggest challenge as a failure to adhere to proper governance and hoped that the probe by the Special Investigating Unit (SIU) into its business contracts would resolve remaining questions about the entity. The SIU would be asked to expedite its work regarding the Trillian-McKinsey contract, she said.
Mondli Gungubele, the acting chairman of the committee, said wider action was required than a single investigation.
“That it depends on the SIU alone, that in itself is a problem.”
The Democratic Alliance’s public enterprises spokesperson Natasha Mazzone said Brown should give her a copy of Eskom’s report, because it was in response to a question from her that Eskom lied about payments to Trillian.
The company admitted in August that it was not true that international consultancy Oliver Wyman had found the payments to be above board but had in fact red-flagged them and called for a review of the entire contracting process.