[dropcap]E[/dropcap]skom said on Monday that auditors have raised concerns about issues relating to Matshela Koko and Brian Molefe, who both ran South Africa’s state-run power utility this year, in their year-end review.
The company’s external auditors reported two irregularities to the Independent Regulatory Board of Auditors, Eskom spokesman Khulu Phasiwe said in an e-mailed statement.
The first was Eskom’s relationship with Impulse International, which received contracts from the power provider while Koko’s stepdaughter was a nonexecutive director. The second related to the reinstatement of Molefe as CEO in May. He was removed three weeks later and a legal case is ongoing.
Eskom had 30 days to report back to the IRBA to state whether the issues had been fixed or not. The “reportable irregularities” were stated by Eskom’s auditor, SizweNtsalubaGobodo, as being “continuing”, the IRBA said by e-mail. They are being processed and will be forwarded on to the Companies and Intellectual Property Commission, the auditor-general and the department of public enterprises, it said.
“Eskom’s board has taken adequate steps to the satisfaction of the auditors that the irregularities were no longer continuing,” the power utility said. “In Mr Molefe’s matter, it was noted that the irregularity could only be closed out when the court proceeding had been concluded.”
Some of Eskom’s top leaders, including Molefe and Koko, were identified in a report by the graft ombudsman last year suggesting the company gave preferential treatment to members of the Gupta family, who are friends of President Jacob Zuma, by awarding coal-supply contracts and helping them buy Optimum Coal Holdings.
Chairman Ben Ngubane quit last month and public enterprises minister Lynne Brown named four interim members to the board. Johnny Dladla, formerly head of Eskom’s enterprises unit, was appointed acting CEO on 22 June.
SizweNtsalubaGobodo also flagged two irregularities at Transnet, South Africa’s state-run ports and rail operator. One was reported as continuing while the other was not, the IRBA said. The relevant authorities including the police will be notified, it said.
“The IRBA cannot comment publicly on the nature of the reportable irregularities,” it said. — Reported by Kevin Crowley, (c) 2017 Bloomberg LP