- On Monday the State Capture Inquiry heard how top officials had pushed for Eskom to sign a multi-billion-Rand deal
- Normal procedures had been omitted in favor of irregular activities, with executives smoothing over any objections
- The deal had included a steep R400 million 'signing fee' which had been payable immediately to an offshore account
Yesterday at the State Capture Commission heard how Eskom had pushed through a multi-billion-Rand deal with the blessing of senior executives who had pushed for approval despite all the warning signs.
Disguised as a funding instrument, Huarong Energy Africa's bid had been appealing, with promises of helping the power utility raise R21 billion in funds without requiring state guarantees.
From the word go, there had been warning signs. These had allegedly been pushed aside and ignored. Executive interventions had smoothed over any concerns from the likes of Anoj Singh (chief financial officer), Zethembe Khoza (former board member), and Sean Maritz (former acting CEO).
Sincedile Shweni, Eskom corporate specialist, came forward as the second witness to explain how the usual procedures had been dropped by Singh and others to push the deal through.
Singh had allegedly signed a term sheet, committing the entity to ludicrous fees, including a 'signing fee' (which was due immediately) of R400 million, that was paid to an offshore account.
According to the Daily Maverick, Huarong's bid had reportedly bypassed the Eskom committee, going straight to a board committee headed by Khoza.
Maritz had then signed a second deal, this time for short-term finance with the company, without the required approval of authority.
Fortunately, the deal had been hampered by a board change, which had arrived just in time to stop finalisation. Huarong has reportedly demanded audience with the current chair, Jabu Mabuza, as it feels the entity should cough up the funds.
Shweni had testified how he had secretly tried to get the Reserve Bank to block the deal, by submitting it in a way he thought would trigger questions about a third-party company that would require a 'signing fee' from Eskom.
He had explained that he could not be too blatant about his warning signal, as this would have sparked a steep cancellation fee if Huarong had caught wind of it.
Eskom had required the Reserve Bank's approval to make payment to a Hong Kong bank account belonging to Ideva International Group.
Shweni had hoped the Reserve Bank would be able to squash the deal, but admitted he could have done more in his attempt to warn them. The bank had ultimately suspended the deal.
Briefly.co.za gathered that, while it seems apparent that Singh had persistently pushed for the deal to take place, it remains uncertain who would ultimately benefit from it.
The matter will continue to be heard today at the Zondo Commission.
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