14/10/2006 19:15 - (SA)
Eskom fleeced of R129m
Makhudu Sefara and Jackie Mapiloko
ESKOM has suffered a financial loss of about R129 million under what a damning KPMG report says are “questionable circumstances” despite chief executive Thulani Gcabashe having been informed in 2004 – and allegedly doing nothing about it.
Police spokesperson Superintendent Lungelo Dlamini confirmed that they were investigating a multimillion-rand case of fraud involving several managers at Eskom.
City Press can reveal that Gcabashe and his top management team have been sitting on a report, dated May 18, 2006, that chronicles a collapse of fiscal control measures, including theft, kickbacks, fraud and apparent corruption in the communications division.
City Press is in possession of a forensic report done by KPMG, an internal audit report prepared by group audit manager Christopher Palm and a set of internal secret reports, including an anonymous letter, detailing how Eskom was fleeced of millions in what appears to have been a “free for all” scam with apparent disregard for fiscal control measures.
The forensic report reveals that the communications section, which was led by Zintle Filtane, made multimillion-rand payments in some cases without having received quotations or contracts.
Where draft contracts existed, some of them had not been signed. Payments were also made without tender processes being followed and in some cases double payments or over-payments were made.
The report says some of the payments were done in cases where there was no proof of “deliverables” or where “deliverables” were questionable.
On the publication of an Eskom annual report, the forensic investigators say Filtane and her team spent R35.2 million in just two years in what was supposed to be a three-year R18 million contract (R6 million a year), representing an over-expenditure of R23 million. The annual report was being printed by Business in Africa Publishing (BIAP), whose directors include Oluwatoyin Taiwo Adedoyin, Andrew Fasedemi, Eric Mafuna and BIAP chief executive Everest Ekong.
Mafuna claims he was fraudulently made a director even though he signed no form or filled in an application to be a director.
When City Press added the amounts of “questionable” payments that went to companies whose directors include Fasedemi, Ekong and Mafuna, the figure comes to over R85 million.
But the biggest beneficiary of the alleged collapse of fiscal control at Eskom remained BIAP.
Mafuna and Fasedemi are listed as co-directors of Africa Now, which allegedly conducted high-level coaching and consulting for R8 million.
The forensic report says the “deliverables” for these contracts are “questionable”. Mafuna said Africa Now neither had a coaching contract with Eskom nor received a cent from it. “Where there is Africa Now in the forensic report it should read Leadership Now, led by Mandla Nkosi.”
But Nkosi rejected this, saying by the time he joined Africa Now they already had a contract with Eskom. He confirmed that he used to have a romantic relationship with Filtane while in exile before Filtane started controlling communications at Eskom.
Filtane, who managed the section, reported to then corporate division managing director Joe Matsau. But Matsau was also a beneficiary of Filtane's questionable judgments in that he accepted alcoholic beverages as gifts from her bought with Eskom money at Makro Woodmead.
These included 12-year-old Royal Salute, 12-year-old Chivas Regal and 8-year-old Chivas Regal Rare, costing about R1 500, which was billed as a "marketing" cost. Filtane refunded Eskom the amount, allegedly at the insistence of Matsau, once the expenditure became public.
In the case of IXIA Trading 359, the report alleges that double payments were made and kickbacks were given to an Eskom official. An affidavit had been obtained in this regard for criminal action.
Superintendent Lungelo Dlamini said: "I would like to confirm that the SAPS commercial crime unit is investigating a case of fraud regarding several million rands stolen at Eskom. However, the investigation is still at its initial stage as the case was registered last month".
Dlamini said the investigating officer had already requested additional information to help him with the investigation.
Filtane resigned from Eskom when she was slapped with a letter of suspension.
An anonymous letter clearly written by someone versed with developments at the section reads: "The staff members are obliged to recommend payment of these invoices - they have no idea what they are approving and co-authorising. Mrs Filtane then only has to approve or authorise the cheque requisitions.
"If anyone had to ask them what professional services their department is (sic) receiving, they would not be able to answer. They have merely been instructed to ensure that the payment is effected."
Gcabashe's management is called into question with regard to payments for the Nepad annual report.
"Filtane brought him under the impression that BIAP is the preferred provider of printing services (when this was not so). Copy of draft contract obtained, no signed version, no tender process followed," the report reads.
The total amount paid was R1.5 million out of Gcabashe's cost centre.
City Press has established that Gcabashe was made aware of the rot as early as 2003 and, according to two reliable sources, he dragged his feet until the rot was firmly entrenched.
"Thulani has failed Eskom, he has allowed the rot to take root by not acting firmly and decisively from the outset. The fact that he was told long ago and did nothing, and the fact that the rot extends to his own cost centre, means he is culpable. Where there is a breakdown of a professional relationship between Filtane and Matsau, the company relies on Gcabashe to manage and lead - my view is that he let us down," says one of the sources.
Eskom spokesperson Fani Zulu, speaking also for Gcabashe, refused to answer a list of 21 questions sent to him.
"We are not in a position to comment on substantive issues around the investigation".
"We can however confirm that Eskom has taken the necessary corrective steps including the appropriate sanction where necessary."
Responding on behalf of Matsau, his attorneys Knowles Husain Lindsay INC said: "Our client received a Christmas gift pack of whisky from the management and staff of the communications department in 2004".
"It was later brought to our client's attention that the gift had been charged via petty cash to the cost centre of the communications department".
"Our client made it clear to them (Filtane and team) that their behaviour was unacceptable and that the gift was sullied. The gift remains untouched".
Advocate Jean Berdou, responding on behalf of Fasedemi, said Fasedemi had resigned as director of BIAP, contradicting an earlier response from Fasedemi that he had put his "decision to resign on hold".
Berdou said: "Your questions also are based on a flawed assumption that Fasedemi or BIA Publications were aware or were party to internal financial allocations at Eskom, irrespective if such monies were paid or not. Mr Fasedemi denies any wrong doing."
Subscribe to the print edition of City Press
|
