Eskom and the Special Investigating Unit (SIU) are going after members of the Gupta family, former Eskom executives, board members and other associates – including former government officials – in an effort to recoup R3.8-billion that the power utility lost when the Gupta family acquired Optimum Coal Holdings (OCH).

In a joint statement released on Monday, Eskom and the SIU said they filed a summons in the high court in Pretoria to recover an estimated R3.8-billion that was diverted from the power utility “to help the Gupta family and its associates to acquire the operations of OCH, which owned Optimum Coal Mining”.

“The further delictual claim for damages pertains to the payments that were unlawfully made to Trillian by Eskom executives. All of the former executives and board members breached their fiduciary duty of care and good faith to Eskom, and acted in a concerted state capture effort with the Gupta brothers, Mosebenzi Zwane and Salim Essa to illegally divert funds from Eskom,” the statement said.

In the statement, Eskom lists 12 defendants for the current case. The 12 defendants include:

Gupta brothers;
Rajesh Tony Gupta;
Atul Gupta;
Ajay Gupta;
Former Eskom executives Brian Molefe (CEO), Anoj Singh (chief financial officer), Matshela Koko (group executive: generation and former acting CEO) and Suzanne Daniels (company secretary and group legal head);
Former Eskom board members Ben Ngubane (chairman), Chwayita Mabude and Mark Pamensky; and
Associates Mosebenzi Zwane (former minister of mineral resources) and Salim Essa (businessman and Gupta friend).

The sale of the coal mine which supplies Hendrina power station took place between 2015 and 2016. At the time, it was owned by Glencore, which had placed the mine in business rescue after failing to renegotiate the price of its long-term coal contract with Eskom and was facing an over-R2-billion penalty for providing poor quality coal to the utility.

The former Eskom executives, Zwane and Essa were involved in a web of discussions and transactions which eventually led to Glencore’s forced sale of Optimum to Tegeta Resources and Exploration, which was largely owned by Gupta mining firm Oakbay Investments Limited and Fidelity Enterprises.

In testimony before the State Capture Commission, former mineral resources minister Ngoako Ramatlhodi testified that Ngubane had threatened to report him to former President Jacob Zuma because he refused to revoke Glencore’s mining licences in 2015.

This exchange allegedly happened in a meeting that was attended by Molefe at a time when the Guptas were actively trying to purchase the mine.

Ramatlhodi said a week later, Zuma “promoted” him to the department of public service & Administration, while the sale of Optimum took place when Zwane was minister of mineral resources.

The commission also heard from former Glencore South Africa CEO Clinton Ephron how Zwane, Essa and Tony Gupta travelled to Zurich, Switzerland where they had a number of meetings with Glencore’s group CEO Ivan Glasenberg wherein they allegedly doubled the initial offer to buy Optimum. The new price tag was R2.1-billion.

Pre-payment

This purchase had to be assisted by Eskom, giving the Gupta-linked Tegeta a pre-payment of R600-million for coal when on the day of purchase the firm did not have enough to close the Optimum acquisition.

Following the revelations around state capture, the Gupta brothers and Essa fled the country and are now in Dubai.

“These 12 defendants acted in a concerted effort whose objective was the corrupt, alternatively irregular, diversion of resources from Eskom. As a result of their actions in the acquisition of OCH during this period, Eskom suffered at least R3.8-billion in losses which it is legally obliged and morally burdened to recover, together with the interest thereon,” said Eskom and the SIU.