Nov. 9 (Bloomberg) -- Bobby Godsell said he resigned as chairman of Eskom Holdings Ltd., the state-owned company supplying 95 percent of South Africa’s power, because the government didn’t support a plan to oust the chief executive officer.

CEO Jacob Maroga’s offer to resign two weeks ago was accepted by the Eskom’s board, Godsell said today in an e-mailed statement. The CEO later retracted his decision and refused the board’s offer to submit to “binding private arbitration” or to respond to the board’s reasons for the breakdown of relations with him, Godsell said.

Eskom is in the midst of a 385-billion rand ($52 billion) expansion to rectify a shortage of generation capacity that in January 2008 led to the closure of most of the country’s mines and smelters for five days. The expenditure is part of an infrastructure investment program that the government is relying on to pull the country out of its first recession in 17 years.

“We’re as puzzled as everyone else as to the extent to which the government as allowed the chaos to get to,” Lillian Letele, a credit analyst at Old Mutual Investment Group (SA), said by phone from Johannesburg. “They haven’t treated investors with respect. We’re all left in the dark.”

Godsell’s exit follows conflicting reports about Maroga. Godsell told staff that Maroga resigned, company spokesman Andrew Etzinger said four days ago. Maroga is back at work, Etzinger said today.

Lack of Support

Maroga, 49, declined to comment on whether he had offered to resign or Godsell’s decision when contacted by phone. Godsell didn’t immediately return voice and text messages left on his mobile phone and didn’t reply to an e-mail. Mpho Makwana was appointed acting chairman, the Department of Public Enterprises said in an e-mailed statement.

“Government, as Eskom’s sole shareholder, has been unable either to support the board’s original decision (to accept the resignation) or its two attempts at resolving the dispute,” Godsell said in his statement, which was sent from his office and confirmed by his personal assistant. “The only course of action seems to me to resign.”

Allen Morgan, a director on Eskom’s board and a former chief executive of the company, quit his position following Godsell’s exit, Johannesburg-based Internet news site, Fin24, reported without saying where it got the information. Morgan didn’t immediately return a voice message left on his mobile phone.

Eskom has 71.77 billion rand of outstanding debt of which 53.34 billion rand is in the form of bonds, according to Bloomberg data. The company has proposed tripling electricity tariffs over the next three years and posted a record 9.7- billion rand loss in its last financial year.

List of Concerns

Godsell, 57, sent a note to Eskom’s board listing 41 concerns he had and questioned the company’s ability to react to the challenges it faces, the Johannesburg-based Mail & Guardian newspaper reported on Nov. 6, citing documents in its possession. Both Maroga and Godsell had earlier told the board they were willing to resign because of disagreements, and the board chose to back Godsell, the newspaper reported.

Maroga’s treatment was criticized by the Black Management Forum, a lobby group, and the youth league of the ruling African National Congress. South Africa’s government is pushing for the promotion of black executives at major companies to help make up for racial discrimination during the apartheid era that left the bulk of the country’s wealth in the hands of the white minority.

“We welcome the news of Godsell’s resignation, he did the honorable thing,” Black Management Forum Managing Director Gaba Tabane said in an interview, adding that the forum wanted the entire board to resign. The youth wing of the South African Communist Party, an ally of the ANC, also issued a statement welcoming his departure.

‘Act Decisively’

“The government needed to act decisively in favor of better delivery,” the Democratic Alliance, South Africa’s biggest opposition party, said in a statement. “Instead, it chose to fuel a tirade of racial rhetoric which resulted in the resignation of Bobby Godsell.”

Eskom may hold a board meeting today, Daniel Dube, a director at the company, said in an interview, without giving further information.

“The board has been paralyzed by this,” said Chris Hart, an economist at Investment Solutions in Johannesburg. “The board needs to be able to do its job without fear or favor. The board should be accountable to parliament and other influences should be set aside.”

Godsell retired as chief executive officer of AngloGold Ashanti Ltd., the world’s third biggest gold producer, in 2007. He was CEO of Anglo American Plc’s gold and uranium division from 1995 before taking over as head of AngloGold.

“Eskom is a critical national asset,” Godsell said. “My hope is the government will move quickly to ensure united and effective leadership.”

To contact the reporter on this story: Ron Derby in Johannesburg at rderby1@bloomberg.net To contact the reporters on this story: Carli Lourens in Johannesburg at clourens@bloomberg.net;

Last Updated: November 9, 2009 14:33 EST