A mixture of oil and the storage company has made deals to supply South Africa’s electric utility with fuel oil worth over R15 billion at inflated prices by paying incentives, including donations to the ANC, revealed a forensic investigation.
Econ Oil & Energy reportedly won the contracts with the help of Thandi Marah, then senior director of business activation at Eskom, who interfered in the bidding processes, said law firm Bowmans, commissioned by Eskom to investigate. (The veracity of a copy of his final report, dated October 12, 2020, has been confirmed by Eskom.)
In return, Nothemba Mlonzi, the sole director of Econ Oil, made the payments requested by Marah, including a contribution of R100,000 to the 2014 ANC election campaign, Bowmans said. A separate presentation made in February by Nerina Otto, Eskom’s Acting Group Head of Legal and Compliance, whose authenticity has also been confirmed by Eskom, made the same conclusion and alleges that Econ Oil overcharged the public service of 2 billion rand between 2012 and 2016.
“Bowmans provided Eskom with a report stating that there was ‘a reasonable basis to suspect that Econ Oil’s conduct violated Eskom’s internal policies’ and that a corrupt relationship existed between Econ Oil and a senior executive in the company. ‘Eskom,’ the utility said in a response. to requests.
Eskom has been at the heart of a judicial inquiry into allegations of widespread looting of South African state-owned enterprises, mainly by people linked to the ANC. The company is struggling to repay its R464 billion debt and has subjected the country to intermittent power outages since late 2005 as it has failed to properly maintain its factories, stifling economic growth and investment in industrial and mining projects.
The finalization of the Bowmans investigation followed Eskom’s decision in July last year to cancel a contract that would have allowed it to continue buying fuel from Econ Oil. Marah was suspended in December 2018 and took early retirement at the end of January 2019, according to the utility.
Marah said she was unaware of the Bowmans report and declined to comment further. Bowmans did not respond to questions and Mlonzi did not immediately comment.
Pule Mabe, an ANC spokesperson, did not answer calls on his cell phone or text. Bowmans identified the Liliesleaf branch of the ANC in Johannesburg as the recipient of the donation. Marah was the branch’s vice president in 2014, according to Pat Sibiya, who was the branch secretary at the time and said he couldn’t immediately remember the payment. Sibiya’s name was not mentioned in the report or in Otto’s presentation and he said he was not involved in fundraising.
Otto said in her presentation that Mlonzi denied the allegations in a response she made to Eskom on February 24 and pledged to prepare an affidavit to give her side of the story. The affidavit has not yet been submitted.
“Eskom has been plagued for a number of years by corruption, bad governance and illegal contracts concluded to the detriment of Eskom and, by necessary implication, South Africa,” said Andre de Ruyter, CEO of the utility group, in a March 29 affidavit to a parliamentary committee.
De Ruyter gave the example of the dispute with Econ Oil and revealed that Eskom took action against several other suppliers, service providers and 12 people, including former executives, who overcharged or defrauded the utility.
Bowman’s report alleges that Mlonzi and Marah pressured Eskom staff to disclose prices from other fuel suppliers to Econ Oil before the tenders were concluded.
It also details a request that Marah made to Mlonzi to make a payment to a women’s charity, and says that Mlonzi paid Marah and other Eskom staff to attend a fundraising dinner at the ‘ANC, where the price of a table ranged from 150,000 to 700,000 rand.
Eskom said it has temporarily suspended Econ Oil as a supplier to allow it to provide further responses over the next six months. If Eskom decides not to lift the suspension, it will remove Econ Oil from its supplier database for 10 years and notify the National Treasury so that it can “blacklist Econ Oil from contracts with other regulatory bodies. the state, ”said the utility.
An attempt by Econ Oil to ban Eskom from removing the company from its supplier database failed in court on February 23, Otto’s presentation said. – Reported by Loni Prinsloo and Antony Sguazzin, (c) 2021 Bloomberg LP
ANC involved in Eskom’s corruption probe
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