Oil blending and storage company has made deals to supply South Africa’s electric utility with fuel oil worth over R15 billion ($ 1 billion) at inflated prices by paying inducements, including donations to the ruling party, a forensic investigation has revealed.
Econ Oil & Energy reportedly won the contracts with the help of Thandi Marah, then senior director of business activation at Eskom, who was involved in the bidding processes, Eskom-commissioned law firm Bowmans said. to conduct the investigation.
A copy of his final report dated October 12 of last year was seen by Bloomberg and 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 election campaign of the ruling African National Congress, Bowmans said.
A separate presentation made in February by Nerina Otto, Eskom’s Acting Group Director for 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 1.2 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 has struggled to pay off its R464 billion debt and has subjected the country to intermittent power outages since late 2005 as it 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.
ANC spokesperson Pule Mabe did not answer cell phone calls or text messages.
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 under oath to give her side of the story. The affidavit has not yet been submitted.
“Eskom has been plagued for several years by corruption, bad governance and illegal contracts concluded to the detriment of Eskom and, by necessary implication, South Africa,” said Andre de Ruyter, Group CEO. utility, in an affidavit dated March 29. to a parliamentary committee.
De Ruyter gave the example of the dispute with Econ Oil and revealed that Eskom has taken legal 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 indicates that Mlonzi paid Marah and other Eskom staff to attend a fundraising dinner. ANC funds, where the price of a table ranged from R50,000 to R700. , 000.
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 for contracts with other regulatory bodies. the state, ”said the utility.
An attempt by Econ Oil to bar Eskom from removing the company from its supplier database failed in court on February 23, Otto’s presentation said.
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