Photographer: Dean Hutton/Bloomberg

Eskom CFO Placed on Leave as Gupta-Linked Scandal Deepens

Updated on
  • Singh implicated in series of questionable deals by utility
  • Development Bank threatened to recall loan: Business Day

The board of Eskom Holdings SOC Ltd., South Africa’s scandal-hit state power utility, placed Chief Financial Officer Anoj Singh on special leave Thursday after he was linked to a series of questionable deals with members of the Gupta family who are friends with President Jacob Zuma.

An investigation is pending, the company said in a statement released via Twitter by its spokesman, Khulu Phasiwe. Public Enterprises Minister Lynne Brown had “noted” the decision, it said. Calib Cassim, a chartered accountant with 15 years’ service at Eskom, has been appointed interim CFO.

Eskom is spending tens of billions of dollars on new power plants that are years behind schedule and is at the center of allegations that the Guptas, who are in business with Zuma’s son, used their relationship with the president to win state business. The company disclosed 3 billion rand ($230 million) of irregular expenditure in its financial results on July 20, a figure which its auditors said they couldn’t independently confirm. Zuma and the Guptas have denied wrongdoing.

Paid Invoice

Lawyer Geoff Budlender published a report last month saying that Trillian Capital Partners Ltd., a financial services firm linked to the Guptas, had submitted an invoice for 30.7 million rand to Singh in April last year, which was paid the same day. The utility later revealed that it had paid a total of 495 million rand to Trillian, despite having said earlier that the companies hadn’t done business together.

A series of emails leaked to the local media allegedly show that the Guptas paid for Singh to fly to Dubai and paid for his hotel and spa treatments. Singh declined to comment on the claims at Eskom’s financial results presentation last week, saying he was still compiling a report to submit to the Eskom board.

Singh is the latest in a series of top Eskom officials to resign or be removed from their posts, including Brian Molefe as chief executive officer, his temporary replacement Matshela Koko and board chairman Ben Ngubane.

Singh joined Eskom in August 2015 after holding the same position at state ports and rail operator Transnet Holdings SOC Ltd. He and Molefe, who moved to the power utility in April of that year, were recruited to help Eskom plug a deficit in electricity supply and oversee the company’s 250 billion-rand funding plan.

DBSA Loan

Johannesburg’s Business Day newspaper reported that Singh was suspended after the state-owned Development Bank of South Africa threatened to recall a 15 billion-rand loan it had made to Eskom if action wasn’t taken against Singh and other officials responsible for its qualified audit opinion.

Patrick Dlamini, the bank’s chief executive officer, confirmed that the loan had been granted and dispersed “pursuant to a stringent credit process,” while declining to answer further questions.

The Democratic Alliance, the main opposition party, welcomed Singh’s removal and said it had laid criminal charges against him.

“It does seem that progress is being made toward cleaning up the rot that has set in at Eskom,” Natasha Mazzone, the DA’s public enterprises spokeswoman, said in an emailed statement. “We still have a long way to go to ensure that the state-owned power utility works for the people of our country and that it is no longer looted for the financial benefit of a few.”

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