ACDP shocked at extent of financial loss by Eskom

The ACDP is shocked at the extent of the financial loss suffered by Eskom over the past financial year. While we were expecting a slight loss following my question to acting CFO Calib Cassim in April (when he indicated that the utility would be “below breakeven”), we are shocked at the extent of the loss – a net loss after tax of R2.3bn, down from a R0.9bn profit in 2017.

This poor financial state off an asset base of approximately R700bn is disgraceful and is largely due to the looting, corruption and mismanagement at Eskom, the evidence of which we heard during the parliamentary inquiry. 

As Eskom CEO Phakamani Hadebe said, it is not normal for the SOE to have had ten CEOs and six boards in the last ten years. However, this, in our view, is was what was needed to accomplish the capture of Eskom, and facilitate its looting. 

It is also shocking that the amount of wasteful and irregular expenditure amounts to R19bn, up from R3bn last year (but with investigations into this item going back to 2012).

The huge debt owed by municipalities running into billions has added strain to Eskom’s financial state. These funds must be collected  and errant municipalities must not be protected, particularly in the run-up to next year’s elections.

The ACDP calls on Eskom to ensure that former board executive directors, including Brian Molefe, Anoj Singh, and Matshela Koko, are held criminally and civilly liable for the losses suffered by Eskom. Board directors that failed to exercise their fiduciary duties and allowed the looting to take place on their watch must also be declared delinquent directors; this to prevent them from ever serving as board directors again. 

In addition, all ill-gotten gains obtained through fraud and corruption or other nefarious means must be recovered, particularly from Gupta-related companies and individuals – wherever those funds are being hidden. Those implicated individuals and companies must also face criminal charges. We cannot afford to wait for the outcome of the Zondo Commission of Inquiry into state-capture. Action must be taken now! 

In this regard, we welcome the criminal charges that have been laid against private companies that have illegally benefitted from Eskom contracts, including McKinsey and Trillian Capital. 

We also trust that the new Eskom Board will succeed in its turn-around plan, and restore public trust and investor confidence in the utility. 

Lastly, the ACDP calls on Parliament to expedite the finalisation of the inquiry into state-capture at Eskom. If other portfolio committees have been busy during this period, then,  given the urgency of this matter, and the poor financial state of Eskom, it is imperative that the Public Enterprises Portfolio Committee meet and finalise its report as soon as possible. The committee also needs to urgently obtain a full briefing on the financial statements released by Eskom today.


ISSUED BY: STEVE SWART MP
23 July 2018