Eskom Should Not Probe CEO Over Racism Claim, Advocate Says

(Bloomberg) --

Eskom Holdings SOC Ltd. Chief Executive Officer Andre de Ruyter should not be subjected to an investigation over racism allegations leveled by the company’s now fired chief procurement officer, an advocate hired to make a ruling on the CPO’s conduct said.

By setting up the probe in response to allegations leveled by the CPO, Solly Tshitangano, Eskom’s board demonstrated “weakness,” Advocate Nazeer Cassim said in a ruling that led to Tshitangano’s dismissal on May 28. Cassim found the CPO guilty of charges related to a fuel-oil supply deal with Econ Oil & Energy Ltd. that Eskom says was fraudulent.

“The issue in this matter is the interests of Eskom and to permit the CPO to use racial overtones to undermine a proper investigation into the contracts awarded to Econ Oil and his own conduct demonstrates weakness on the part of the Board of Eskom,” Cassim, a former High Court judge, said in his ruling, seen by Bloomberg. “The Eskom Board is fragile, if not weak in the execution of its duties.”

Tshitangano had accused De Ruyter of racism because of the way Black suppliers to Eskom are allegedly treated. The altercation comes as Eskom struggles to service its more than 400 billion rand ($29 billion) debt pile and to supply sufficient electricity to meet the nation’s needs from its old and poorly maintained plants.

‘Common Sense’

Eskom’s spokesman, Sikonathi Mantshantsha, declined to comment and Tshitangano requested questions by email to which he didn’t immediately respond. A parliamentary committee dropped its own probe into the racism allegations leveled against De Ruyter after Eskom’s board initiated its own.

“How on this basis can the Board of Eskom shirk its responsibility in dealing with the real issues by appointing a commission of inquiry into racism at Eskom escapes me,” Cassim said. “It defies common sense.”

The advocate said Tshitangano attempted to protect the business interests of Econ Oil. De Ruyter, in a March 29 affidavit to parliament, has previously accused Tshitangano of facilitating 8 billion rand of new business with Econ Oil even though a legal probe commissioned by Eskom found an allegedly corrupt relationship between Econ’s sole director and shareholder, Nothemba Mlonzi, and a former Eskom employee, Thandi Marah.

“Econ Oil denies any wrongdoing in relation to any of the claims made,” a company lawyer said in a letter responding to questions from Bloomberg. The allegations against Econ “have not been proven and are in fact untrue. Econ has in detail rebutted these allegations in pending litigation which is to be adjudicated within the next month.”

Marah didn’t respond to requests for comment. News24, a South African news website, reported on aspects of the findings earlier.

(Update with Econ Oil comments in eighth paragraph)

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