Eskom report and court judgment clears and vindicates COO Jan Oberholzer
by Chris Yelland, managing director, EE Business Intelligence

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Johannesburg, 20 September 2020

An explosive report by Eskom CEO Andre de Ruyter to the Eskom board reveals Eskom's position in respect of unproven allegations of corruption, nepotism and victimisation orchestrated against COO Jan Oberholzer on social media and other platforms.

The Eskom report dated 24 August 2020 was presented to the Eskom board by De Ruyter at a board meeting on 31 August 2020, and deals with apparently orchestrated and ongoing suggestions by the EFF, trade union federation SAFTU, Corruption Watch and other murky elements that have suggested a corrupt and conflicted relationship by Oberholzer with Stefanutti Stocks, Black & Veatch and Aveng.

The Eskom report also deals extensively with unproven allegations by former Eskom general manager: coal and clean technologies, Mark Chettiar, who was also the portfolio project manager for the disastrous Majuba rail project, and the new ash dam project at Camden power station where delays have caused the whole 1600 MW power plant to shut down for several months at the end of May 2020, leading to at least one stage of load shedding in South Africa.

The Eskom report is the third investigation into alleged wrongful actions by COO Jan Oberholzer. All three of these investigations have cleared Oberholzer of wrongdoing, and this latest Eskom report clearly states:

“None of the investigations found any substance to the allegations of wrongdoing as put forward by Mr Chettiar. It is recommended that the board endorses the COO’s actions as having been fair, transparent, procedural and professional in upholding and fulfilling his contractual mandate in serving the interests of his employer Eskom.”

In the report, the Eskom CEO warns of an “emerging pattern of underperformers to style themselves as whistle-blowers when called to account, a trend that is entirely at odds with the desired high-performance culture that Eskom is seeking to inculcate in its employees”. 

According to the Eskom report, Chettiar went on sick leave on 29 January 2020 after he was transferred following a transparent process from his position as general manager: coal and clean technologies at Eskom to a similar position of the same grade in the human resources department at Eskom. This was said to be due to his underperformance and a breakdown in the trust relationship because of false and unproved allegations he made in a grievance process against the COO.

Since then to date, Chettiar has not returned to work, nor complied with any work instructions, yet he continues to receive his full salary with benefits as a general manager at Eskom, while he pursues a claim of victimisation at the CCMA. Chettiar also faces a disciplinary hearing served on him on 20 January 2020 due to “serious unfounded and unproven allegations against the COO”.

Through his attorneys, Chettiar has also been attempting to claim a severance package of R41-million from Eskom, while at the same time making allegations of corruption, nepotism and victimisation through various channels including the EFF, SAFTU and Corruption Watch to the media against Eskom COO Jan Oberholzer.

The severance package tabled through Chettiar’s attorneys would require Eskom to withdraw all disciplinary charges against Chettiar; all his legal costs to be paid by Eskom; all his medical costs not covered by medical aid to be paid by Eskom; the full current value of his Eskom pension fund (estimated at R7-million) to be transferred to a preservation fund nominated by Chettiar; his full salary to be paid by Eskom until he reaches retirement age in about 12 years (estimated at about R24-million); and compensation of R10-million to be paid by Eskom for the alleged reputational harm he has suffered.

Documents seen by EE Business Intelligence indicate a number of alleged reasons and justifications by Chettiar for the above, including suggestions that despite his efforts Chettiar cannot find other employment because he alleges Eskom has damaged his reputation and caused him physiological and emotional distress and damage.

In the meantime, Chettiar's former position as general manager: coal and clean technologies at Eskom has been filled by Naresh Singh, general manager: Africa strategy, who was seconded to the coal and clean technologies portfolio with effect from 1 February 2020. This, according to the Eskom report, was to ensure stability and continuity of service in this department, and to manage and oversee the execution of critical projects in Chettiar’s former portfolio.

In a further development, a landmark high court judgement on 15 September 2020 appears to vindicate Eskom COO Jan Oberholzer's stance on a R40-million disputed payment to Aveng, and undermines the suggestions by Chettiar, that Oberholzer irregularly authorised this payment to Aveng.

According to the Eskom report, the R40-million payment to Aveng had been authorised by Oberholzer on the recommendation of Chettiar, plus an official opinion from an external legal company, Edward Nathan Sonnenbergs (ENS), and after an independent arbitration award settlement in favour of Aveng in its dispute with Eskom.

Chettiar subsequently claimed to the Zondo commission that this was a corrupt and irregular payment on the part of Oberholzer. As a result, payment was suspended by Eskom pending the outcome of a high-court action by Aveng to enforce the arbitration decision.

The judgement now orders Eskom to pay Aveng the R40-million, plus interest on the debt to Aveng, plus costs of the legal action by Aveng. In addition, the arbitrator has since ruled in favour of Aveng on claims in excess of a further R16-million. Eskom CEO Andre de Ruyter commented on 19 September 2020 that “the court judgement has now vindicated the COO’s stance on the matter”.

Impeccable sources indicate that the Eskom board is supportive of the Eskom CEO and COO following the presentation of the report by De Ruyter at the board meeting of 31 August 2020, and that the report has since been given to Public Enterprises Minister Pravin Gordhan.

When approached for comment and response to a number of questions from EE Business Intelligence arising from the Eskom report and high-court judgement, the Minister responded through his spokesman Sam Mkokeli that the matter should be referred to the Eskom board.

The interim Eskom board chairman Prof. Malegapuru Makgoba in turn responded that: “The board will respond at the appropriate time”.

When afforded opportunity for right of response, Mark Chettiar replied: “Kindly take note that I am taking legal advice on this matter and therefore am not in a position to comment further”.

© Copyright 2020 - EE Business Intelligence (Pty) Ltd. All rights reserved. This article may not be published without the written permission of EE Business Intelligence.

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by Chris Yelland, managing director, EE Business Intelligence