AfriForum backs whistleblower over “unlawful and irregular” Eskom diesel contracts costing hundreds of millions
Eskom is possibly losing hundreds of millions of rand every month despite being in possession of a forensic report exposing possible corruption and irregularities that could help bring an end to the losses. That’s according to a whistleblower, now represented by AfriForum’s Private Prosecution Unit, who together will expose the corruption and ensure that those implicated are properly investigated and prosecuted. The matter concerns serious governance failures and corruption in the awarding and management of diesel procurement and storage contracts.
The whistleblower has told the unit that Eskom is in possession of a completed forensic audit compiled by Itsamaya Holdings presumably made adverse findings against some of the companies who were awarded the contract. The five companies awarded the contract to supply and store diesel for Eskom are Astron Energy, Lanele Group, African Shipping and Forwarding, Nutinox, and Severino Industries.
Nutinox recently made headlines after the Johannesburg High Court declared invalid a R263-million tender to supply water tankers over a three-year period. It was also reported that the company’s directors have links to Deputy President Paul Mashatile. Lanele is currently in a legal dispute with Transnet that includes allegations of corruption and money laundering linked to the lease of Transnet property for the development of a fuel storage facility.
In a letter to Eskom, Adv. Gerrie Nel, head of AfriForum’s Private Prosecution Unit said the whistleblower alleges that the forensic report has been referred to a law firm to review it. “We have become accustomed to the tendency of government and state entities to appoint and fund independent forensic investigators to produce reports, only to appoint lawyers then to set those reports aside when their findings are ‘inconvenient’ to powerful individuals.
“In this instance, we are informed that the completed report, which focused on fuel procurement and may have made adverse findings, was referred to Centurion Legal Group. If true, such conduct undoubtedly amounts to wasteful expenditure, particularly where public funds are used to challenge a report commissioned by Eskom itself,” said Nel.
Among the irregularities investigated were relaxed bid criteria, prepayments to suppliers that lacked available capital, the acceptance of rebate arrangements that earned suppliers millions of rand at Eskom’s expense, and instances where Eskom provided fuel storage facilities to suppliers while also being billed for those same facilities.
In the letter, Nel referred to the case against SAPS National Commissioner General Fannie Masemola, who has been charged under the PFMA for allegedly failing to prevent irregular and wasteful spending, including losses caused by criminal conduct. “It was Masemola’s four-month delay in acting on a report that placed him in the sights of law enforcement. We accept that Eskom’s Head of Forensics and the other accounting officers at the power utility who are in possession of Itsamaya’s report will not make a similar inexcusable misjudgement,” said Nel.
In light of the rampant lawlessness and impunity under which whistleblowers and witnesses are murdered in South Africa, the whistleblower has requested that their identity be withheld. They fear not only for their life, but also for their livelihood, given the vindictive conduct of state entities that punish those who expose wrongdoing instead of those who commit it.
The Private Prosecution Unit does not share this fear and will continue to expose corruption, and privately prosecute where the state fails to perform its duties.
