CEO of Eskom Brian Molefe announced his resignation this afternoon. This follows allegations made against him in the Public Protector report on State Capture. As a state owned enterprise (SOE), Eskom is managed using taxpayers’ money. That means that you and I are responsible for funding the power utility and paying its staff.
As with many of the other SOEs in South Africa, Eskom has been fraught with corruption and wasteful expenditure scandals. However, Molefe was brought in to try and make the power utility profitable once again.
According to Peter Attard Montalto, a research analyst at Nomura, Molefe had no credibility left following the Public Protector’s report, regardless of the credibility behind the allegations
“Brian is the fallen angel for investors coming out of Transnet as a hero and now implicated in alleged grand corruption and rent extraction by the PP report. In a way it’s sad, in a way it’s not. He ultimately was successful because he could navigate the patronage realities of the ANC but it has caught up with him.
“We need to understand however that the rot in Eskom goes much deeper - the whole board needs to be replaced and there are many others there also implicated in the PP report,” said Montalto.
Furthermore, Montalto expects a similar person to be appointed as the new Eskom CEO. “I do not see this as a positive. They will appoint someone equally as willing to facilitate rent extraction and ensure nuclear success and as long as the board is in place and other senior management nothing changes. If the CFO is appointed CEO that is not positive and would be a sign of status quo.”
Molefe will leave Eskom as of 1 January 2017.