Fixing Eskom will be good for black business and economy

When Andre de Ruyter was appointed as Eskom’s Group CEO in 2019, the markets were surprised. This was because the once-thriving company he was leaving to join the struggling national power producer, Nampak, was in financial ruin.

During De Ruyter’s tenure as Nampak’s CEO, the company’s share price took a nosedive from R48.85 in November 2014 to R6.85 when he joined Eskom.

According to data compiled by Bloomberg, despite De Ruyter’s poor performance, he was rewarded with R21.5-million in bonuses. In 2018 he pocketed R16.5-million in salaries and an R8.8-million bonus in the midst of Nampak’s share price shrinking by 15%.

Slipped through the radar undetected

Before joining Nampak, De Ruyter had served at petrochemical giant, Sasol. He served for two decades in various managerial positions. When he left Sasol in 2013, he was the senior group executive of global chemicals and North American operations.

What is unknown is that De Ruyter was on the brink of being fired by then-Sasol CEO David Constable. This over a string of indiscretions that were outlined in a forensic report. The report came out of a sweeping forensic audit he commissioned in 2013.

The investigation was conducted by Werksman’s Attorneys. It found, among others, that De Ruyter had traded on price-sensitive information; insubordination, and sundry racism.

Impeccable sources at the time said De Ruyter’s lawyers were presented with preliminary findings in August 2013. The lawyers struck a deal with Constable to vacate his position quietly.

Eskom board was unaware of all these when they hired him

Recommendations by Werksmans were for Sasol to report De Ruyter to law enforcement authorities. To also report him to the US Securities and Exchange Commission (SEC). However, the company chose to bury the investigation report and its findings instead.

Former Eskom chairman Jabu Mabuza confirmed at the time that the Sasol Report, which recommended criminal action against De Ruyter, had not made its way to any of the selection committees when deciding on the candidates for the top position.

De Ruyter’s tenure at Eskom was devastating. Not only to the ailing national power producer but also to black businesses.

When he took over, he immediately set in motion processes to remove contractors. This saw many black-owned businesses being cut loose from strategic contracts.

Notably, Econ Oil Energy, a 100% woman-owned fuel supplier to Eskom. The firm had successfully supplied all of Eskom’s 16 power stations with fuel oil from 2012 to 2017.

The company had grown to become a powerhouse in the fuel supply business. It thus disrupted the status quo of traditionally white-owned fuel companies. These had monopoly over Eskom’s fuel supply.

De Ruyter moved to cancel black-owned contracts

Econ Oil made investments of up to R60-million in constructing a blending plant that was fully focused on Eskom’s operations.

When De Ruyter entered Eskom, he immediately masterminded a move to cancel a freshly awarded contract. The multi-billion-rand fuel oil contract by Eskom awarded Econ Oil the supply of fuel oil to 11 out of the 16 Eskom power stations.

The decision to cancel the contract came at a crucial time. This was when Eskom was experiencing its worst periods of load shedding. Its fuel consumption was at its peak, and yet it had no money to purchase fuel oil. Eskom ran a credit line with Econ Oil for fuel oil during this period.

De Ruyter issued instructions for the redlisting of the company and its director, Nothemba Mlonzi. By then the company had been conducting business with Eskom for a period of 10 years.

Judge Bashir Vally found that Eskom had not followed its own processes properly when awarding the fuel oil contract. But he made no finding of wrongdoing against Econ Oil.

EFF tried to step in and accused De Ruyter of racism

Despite this, De Ruyter asked the National Treasury to redlist Econ Oil from conducting business with the state. This was declined by Finance Minister Enoch Godongwana.

The EFF took up the matter of Econ Oil in several committees. It alleged that De Ruyter was pursuing a racist agenda against a black woman-owned fuel business. Also against other black businesses.

The Standing Committee on Public Accounts (Scopa) in Parliament was not convinced by Eskom and its executives. They were often chastised over how Eskom had dealt with Econ Oil. This was done during all their appearances during De Ruyter’s tenure.

In July last year, Dorothy Mmushi, a trailblazing forensic accountant, was put on a hit list. This after she uncovered billions of rands that were being looted from Eskom by suppliers. This was done with the aid of senior management at the national power producer.

Mmushi still lives in fear for her life following the police’s reluctance to arrest those involved. This despite their identity being known, together with a wealth of evidence supplied to them. She has urged parliament and those with the political power and will to fix Eskom, to put in place a commission of inquiry. She wants a commission of inquiry at the power utility for the period during De Ruyter’s tenure.

Forensic accountant put on hit list

Mmushi explained that she came across instances where senior executives were found to have been involved in wrongdoing. This was when she was a manager overseeing several investigations into wrongdoing at Eskom. It was when she reported these very same matters to the law enforcement authorities that a R400,000 price was put on her head.

This is the only process that can restore and entrench the transformation agenda at Eskom. It can also assist the new administration to restore justice and order to the national power producer. This during a time when our people and our economy need a stable power grid.

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  1. Your piece would have been brilliant we’re it not that lopsided. The less said about Econ Oil the better.

    The fourth estate has a principled duty to report facts objectively and subjectively. This is a scathing report on the then CEO discounting all facts of wrongdoing that are in the public domain.

  2. Can someone please confirm that Escom was paying more than R40 per liter for diesel from their supplier when the contacr was stopped? Why all the arguments without numbers to back it. Suppose it would be verry bad for the empowering agenda if that type of numbers would come out.


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