ESKOM HOLDINGS SOC LIMITED - Eskom Holdings SOC Ltd Reportable Irregularities- 30 September 2018

Eskom Holdings SOC Ltd Reportable Irregularities- 30 September 2018

ESKOM HOLDINGS SOC LTD
JSE CODE: BIESKM
DATE: 28 January 2019


REPORTABLE IRREGULARITIES – 30 SEPTEMBER 2018.



Eskom Holdings SOC Ltd reported the following reportable irregularities in the interim financial
statements for six month period ended 30 September 2018:

    ?   There were allegations that an early retirement agreement between Eskom and the former
        group chief executive (GCE) (B Molefe) was irregular.

    ?   A parliamentary inquiry was held into perceived maladministration, governance and
        procurement issues at Eskom. Certain representations made by previous and current
        directors and officials indicated that there could have been a breach of fiduciary duties in
        terms of the requirements of the Companies Act.

    ?   Eskom procured the services of McKinsey through its sole source supplier process and as a
        result a competitive bidding process was not followed In addition, the subcontracting of
        Trillian Management Consultancy (Trillian) by McKinsey did not follow the procurement
        process

    ?   Certain services provided by Cliffe Dekker Hofmeyr to the former company secretary (CS) (S
        Daniels) were questionable in terms of Eskom rules.

    ?   Minutes of the board and its sub-committees were not timeously approved

    ?   Eskom did not timeously update directors' records with the Companies and Intellectual
        Property Commission (CIPC)

    ?   There were allegations that the former CFO (A Singh) and former interim GCE (S Maritz)
        breached their fiduciary duties by contractually and financially binding Eskom to a
        facilitation fee with Huarong Asset Financing.

    ?   The former chief procurement officer (CPO) (E Mabelane), former GE: Group Capital (A
        Masango), former acting GE: group capital (P Govender) and former CS (S Daniels) approved
        payments to Trillian without the existence of a contract thereby breaching their fiduciary
        duties

    ?   There were allegations that the former CPO (J Pillay) and other senior officials in
        procurement were involved in acts of misconduct involving EOH Holdings Ltd (EOH).

    ?   There were allegations that Eskom incorrectly procured services from Bizz Tracers (Pty) Ltd
        through the sole source supplier process

    ?   Subsequent to 31 March 2018, further suppliers were identified where services were
        incorrectly procured through the sole source supplier process.
   ?   It is alleged that the former CS (S Daniels) and the former interim GCE (MM Koko)
       distributed confidential Eskom documentation to a third party.

   ?   A member of the board and Audit and Risk committee (J Sebulela) did not declare a conflict
       of interest and did not recuse himself on deliberations involving the supplier (EOH).

   ?   Legal fees were paid on behalf of certain former board members who were not directly
       related to their roles as directors of Eskom.



Eskom Holdings SOC Ltd
Vincent Makhuvha
011 800 5722

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