Trevor Manuel blasts Eskom board

The former finance minister has pulled no punches in questioning the conduct of Eskom's board in reappointing Brian Molefe as CEO. By Ingé Lamprecht.

Trevor Manuel

The Eskom board failed patently in its duties by reinstating Brian Molefe as CEO, former finance minister Trevor Manuel has argued.

Addressing delegates at the Ethics Institute’s 7th Annual Conference, Manuel pulled no punches in questioning the conduct of the Eskom board, the pension fund, the minister of public enterprises Lynne Brown and Molefe himself regarding the matter.

After he was implicated in the public protector’s “State Capture” report, Molefe voluntarily stepped down as Eskom CEO in November 2016, arguing that it was in the interest of good governance.

Brown previously blocked a R30m pension payout to Molefe and instructed the Eskom board to come up with an appropriate pension proposal, but in an about-turn on Friday she announced that Molefe would return to head up the power utility as the pension payout would not be in the best interest of the fiscus.

Manuel said the Eskom Conversion Act, a piece of legislation passed in 2002, set a number of tasks in law. Among those were that the board was “responsible for providing strategic direction and leadership, ensuring good corporate governance and ethics, determining policy [and] agreeing on performance criteria”.

Nowhere did any other piece of legislation governing corporations — not even the Companies Act — go into the same level of detail about leadership and ethics. The board, headed by chairman Ben Ngubane, was also the accounting officer in law, he said.

“When the board fails as patently as it does in this instance, who then takes responsibility?”

He said the board almost certainly had a committee that dealt with social, environmental and ethical issues. In terms of the King IV code on corporate governance, the committee had the final responsibilities in law. “Where is the committee?”

Referring to the previously proposed pension payout of R30m, Manuel said all pension funds were governed by the rules of the fund and established in terms of legislation. In each case, the value of a pension was determined by the rules and generally complied with either a defined benefit or defined contribution system. The rules also ensured that each member of the fund had an equi-determined entitlement to the share of the fund.

“Depending on your contribution, which is matched by the employer’s contribution, you can then determine before you leave what your entitlement is.”

Manuel said even if Molefe’s term as Eskom CEO was generously stretched to 20 months to account for the fact that he only officially left on 1 January 2017, there was “absolutely no way” that the combination of his contribution, the employer contribution and the growth in the fund could have produced R30m.

One had to ask whether, by applying the same rules, Eskom could set a pension payout for longstanding workers, who might have contributed to the fund for their entire working life, by a similar multiple of earnings. The oversight vested with the Eskom pension fund and the law was clear: the pension fund had to be made up of employer and worker representatives in equal numbers.

“Where is the pension fund in overseeing the way in which determinations are set?”

Manuel said Molefe took an oath when he was sworn in as an MP to obey, respect and uphold the constitution and all other laws of the republic. The same constitution Molefe swore allegiance to created chapter 9 institutions including the public protector, Manuel said.

Former public protector Thuli Madonsela, in her “State Capture” report, called for a judicial commission of inquiry into the allegations.

“If he respects and upholds the constitution, why does he undermine the recommendations from its public protector? These are fundamentally important questions.”

Manuel said he shared a platform with Brown during the World Economic Forum on Africa in Durban on 4 May and, like him, she supported the recommendation of the public protector that a judicial commission into state capture should be established.

“I can’t understand what happened between that public commitment made on 4 May and her agreeing to the reappointment of Brian Molefe and declaring his innocence on [12] May. What happened in a week?”

Manuel said the conduct of people appointed to lead institutions such as Eskom spoke to the nature of the ethical challenges facing South Africa.

He said he knew Molefe, Brown and Ngubane for a long time and when he looked at their conduct in relation to the matter, he was compelled to ask the “Psych 101” question: were the individuals natured or nurtured to conduct themselves outside the norms, morals and ethics of society?

“What happened? What went wrong in their brains? Why do they not see that they act outside of these things? Were they born this way or did something happen? In the case of Lynne Brown, certainly between 4 May and 11 May, what happened? What nurturing happened that compelled her to act in the way that she did and why did she not notice that she was doing something wrong?”

  • This article was originally published on Moneyweb and is used here with permission

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  • Mike frm Newlands

    Trevor Manuel is long captured by white monopoly capital. He even see himself as more white than coloured. He is a bad a De Klerk. No advise from him is reasonable.

  • Mani

    Oh have some more single malt, mike.

  • Do the right thing

    Yes , mike maybe you having too much , common sense is all that you need to drink, which is clearly not what you have been drinking to make such stupid comments

  • Gordon Beattie

    Mike you are missing the point. Never mind bad mouthing Trevor Manuel. Stick to the points under discussion – What undermines the morals of so many senior people

  • Makhosi

    Well , Manuel, is making perfect sense to me…….especially with the Maths part.

  • Greg Mahlknecht

    Yeah, how dare he come with his facts and common sense!

  • Joe Black

    Let me explain. He’s innocent until the state capture investigation is complete. And Zuma will delay the state capture investigation as long as possible, and when he can’t delay he will make sure that it is hamstrung. On the odd chance anybody close to him is implicated he will just ignore the findings – He will ignore the findings because the ANC itself have claimed legal authority above even the courts and prefer to deal with things like this internally. This behaviour is vociferously guarded against all criticism by a host of lackeys who, much like Malema used to do until he was discarded, will scream at the top of their lungs that they will die for Zuma/ANC/whoever Lethuli House tells them to scream for. The internal accountability structures of the ANC are a joke. These miscreants ignore event the findings and recommendations of their own ethics committees. And Lethuli house fears the bad optics of admitting/exposing any wrongdoing so much that they protect wrongdoers even when their conduct has been most heinous. There are people in the ANC who are still ethical, but for the most part it looks like they are so isolated that they live in a dream world and are still surprised when things like this happens.

    The ANC is broken. IT needs to be returned to the factory. Nothing will change until the ANC is shown the door.

  • Marcan X

    The questions asked in the last paragraph can be easily answered by : Molefe, Lynne Brown and Ngubane are totally captured by the Zuptas.They have no honesty and integrity.

  • CharlieTango

    Ben Ngubane has a history of dubious decisions – just look what he allowed at the SABC

  • Marcan X

    “dubious decisions”, quite an understatement.
    Have you read the latest Amabhungane report on how Ngubane and Molefe forced the previous mining minister Ramathlodi to make Glencore sell their Optimum coal mine to the Guptas, with all kind of dirty tricks and lies ?
    Ramathlodi was reluctant, and was reshuffled and later completely removed from the cabinet.
    Read :AmaBhungane Exclusive on EWN: How Brian Molefe ‘helped’ Gupta Optimum heist on EWN.
    Ngubane has to spend the rest of his days with the Zuptas, and all the Zuma cronies in the dark, damp dungeons of the bombproof shelter at Nkandla behind a very secure gate. And the keys thrown away.

  • CharlieTango

    The moderator won’t allow me to use the language that best describes this crook….

  • The Special One

    Play the ball and not the man. Ever heard of the term argumentum ad hominem? You are attacking Manuel as a person and not his argument. That’s what happens with people with low intellectual capacity. Deal with the issues he has raised. Are they true or not? At times you need to tell the truth, even if it means that the same truth has been spoken by your worst enemy.