Last week saw the reinstatement of former Eskom group CEO Brian Molefe. This, following the dispute around his proposed R30 million pension pay out. The board of Eskom met last week and decided that Molefe was to return monies received from Eskom at his departure and start back as chief executive effective last week.
“In terms of the board’s proposal‚ Molefe agreed to serve out the remainder of his original contract and to reconsider the terms of his contract that resulted in the previous pension arrangement‚ the one I objected to. I believe the board’s proposal ultimately represents a significantly better value proposition to the South African fiscus than the previous proposal. I informed the board I was satisfied with its re-evaluation process and recognise the merit in its proposal on the proviso of its legality,” stated Minister of Public Enterprise Lynn Brown.
But not all share her sentiments, as the country on a large scale is baffled and outraged by the decision.
“As far as we understand, Mr Molefe had resigned as the CEO for the sake of good governance at a time when his leadership was questioned under the cloud of the Public Protector’s “State of Capture”. In Brian Molefe’s statement dated 11 November 2016, released by Eskom at the time, Mr Molefe said: “I have, in the interests of good corporate governance, decided to leave my employ at Eskom from 1 January 2017. I do so voluntarily.”
“Eskom cannot simply reinstate Mr Molefe. The position needs to be re-advertised and a candidate properly appointed,” added The Organisation Against Tax Abuse (OUTA).
OUTA continued: “The Eskom board and Minister Brown must not take the public for fools and need to explain with clarity what is going on here. We cannot see any reason why Mr Molefe’s so-called ‘expertise’ is required at Eskom, when in fact, we have sufficient evidence of questionable and dubious contracts entered into under his previous tenure, to the detriment of Eskom and the people of South Africa.”
Molefe who served a short 18 month tenure as Eskom CEO and who was recently sworn in as a member of parliament (MP) was believed to have been doing well at the helm of the state owned enterprise when he stepped down.
“When he stepped down the board was not in agreement, it grudgingly accepted that he was stepping down. The State of Capture [report] is actually not a conclusive document and we will have a conversation if it gets concluded at the point when it does, if it does. As it stands, we cannot hang him on the basis of the [Public Protector's] report, which is admittedly not conclusive,” explained the spokesperson of Eskom to Business Report.
“I believe that Eskom will benefit from the return to the helm of the man primarily responsible for the company’s turnaround in 2015/2016, and that the Board's proposal ultimately represents a significantly better value proposition to the South African fiscus than the previous pension proposal,” added Brown.
Despite the obvious politics, Molefe’s return is also set to intensify the negative consequences of the recent ratings downgrades.
The CEO Initiative stated that this decision will add to the “political and institutional uncertainty” in the country. “We believe this action is disrespectful to the citizens of South Africa, and sends a worrying message to investors and ratings agencies about the country’s commitment to good governance and tackling inefficiencies at state-owned entities.”