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Minister Lynne Brown summoned to Luthuli House over Molefe's return to Eskom

May 15, 2017
Minister Lynne Brown summoned to Luthuli House over Molefe's return to Eskom

Public Enterprises Minister, Lynne Brown, is expected to appear before the African National Congress' (ANC) top brass at Luthuli House on Monday as anger mounts on the return of former Eskom Chief Executive Officer (CEO), who was now an ANC MP, Brian Molefe, to the power utility's helm.

On Friday, Brown said that the Eskom board’s decision to reinstate Molefe is a better option than a previous R30 million early retirement pay-out.

This is despite even the African National Congress (ANC) on Friday condemning the move as "unfortunate and reckless decision".

“I believe the board’s proposal ultimately presents a significantly better value preposition to the South African fiscus than the previous pension proposal. I informed the board that I was satisfied with its re-evaluation process,” said Minister Brown at a media briefing in Cape Town, on Friday.

This after the board briefed the Minister on the outcome of consultations on the former CEO following the Minister’s rejection of a R30 million early retirement payment to Molefe.

“After considering various options, the board proposed that Mr Molefe return all monies received on his departure from Eskom and be reinstated as CEO effective immediately.

“In terms of the board’s proposal, Mr Molefe agreed to serve out the remainder of his original contract and to reconsider the terms of his contract that resulted in the previous pension arrangement. I informed the Board I was satisfied with its re-evaluation process and recognised the merit in its proposal – on the proviso of its legality,” said the Minister.

This as news broke that the board confirmed that Molefe would return to the power utility on Monday.

The Minister, however, added that the matter has raised an important broader issue relating to state owned companies.

“I’ve asked my department to work with state owned companies to ensure that the pension packages negotiated with executives at state owned companies are in line with the cabinet approved remuneration standards,” said Minister Brown.

Responding to a question, the Minister said Molefe would will serve out the remaining two and a half-years of his five year contract.

Molefe’s resignation from his post on 1 January 2017, followed the publication by former Public Protector Thuli Madonsela’s report into alleged state capture.

At the time, Molefe said his stepping down is not an act of admission or wrongdoing on his part. 

At Friday’s briefing, the Minister said Molefe had not been found guilty of anything. “He has been accused of being captured, but he must be seen as innocent until proven otherwise.”

Speaking on the state of the utility, Minister Brown said Eskom has managed to remain resilient even at a time when the South African economy is stagnant. “There is a narrative to say that Eskom is in a bad state, the utility has been able to cover its costs (including) the build programme. It has been able to cover its costs by 90%. Eskom is quite resilient,” she said.

Allegations of impropriety

The Eskom board has also briefed Minister Brown on the status of investigations of allegations of impropriety regarding interim Chief Executive Matshela Koko.

This as the board had appointed a firm of attorneys to conduct an independent probe. The firm has since then requested more time to complete its work with the board being of the view that this extra time should be granted.

“In the interest of the process, the interim Chief Executive has decided to go on leave until the investigation is finalised by mid-June and I support the decision,” said the Minister.

Minister Brown further assured South Africans that the final investigative report will be handled transparently and that action will be taken against Koko should evidence of wrongdoing be discovered.

She further reiterated the call for an investigation into allegations of maladministration raised in various reports including former Public Protector Thuli Madonsela’s State Capture report.

“Clouds of unproven allegations and counter allegations are doing state owned companies in our country a great disservice,” she said.

Meanwhile, Parliament on Friday confirmed Molefe’s resignation as a Member of Parliament.

Minister Brown lying - DA

Meanhwile, the Democratic Alliance said that Minister Brown’s assertion at a press conference earlier today that the reinstatement of Brian Molefe as Eskom CEO is the "only option" is disingenuous and simply not true.

"In view of the spurious reasons given and the complete irrationality of the decision, we will once again be approaching the courts, this time to set aside Brian Molefe’s ‘redeployment’ by the ANC government to Eskom," said Natasha Mazzone MP - the DA's Shadow Minister of Public Enterprises.

"We believe that Brian Molefe was never entitled to the R30 million in the first place for two reasons, one he did not qualify for early retirement as he was under the age of 55 and two, he only worked at Eskom for 21 months accruing an estimated maximum retirement benefit of only R2,5 million."

Mazzone said that according to section 24 of the Rules of the Eskom Pension and Provident Fund (EPPF), an employee is only eligible for pension benefits in terms of early retirement once they have reached the age of 55 years.

"Brian Molefe is currently 50, turning 51 in November of this year. He therefore never qualified for pension benefits under the early retirement provisions of the rules of the fund.

"Moreover, our rough calculations having looked at the EPPF Rules, are that, on the basis of a R6,9 million annual salary, Molefe would only have accrued a maximum retirement benefit of R2,5 million on resignation from Eskom," she said.

"Brown therefore today clearly used the R30 million figure as a smoke screen to justify the unjustifiable return of Molefe to the CEO position.

"It is highly suspicious that having failed to become the Minister of Finance, which seemed Zuma’s clear intention in deploying Molefe to Parliament, Minister Brown has now paved a smooth return for him to Eskom.

"Indeed, Molefe was clearly of no use to Zuma and the Gupta family in the back benches of Parliament."


–additional reporting SAnews.gov.za