Econ Oil accuses outgoing Eskom CEO of purging black business

Johannesburg - Problems keep mounting for outgoing Eskom chief executive officer Andre de Ruyter who is accused of purging black-owned companies and protecting white-owned businesses.

This was after De Ruyter was accused of being anti-transformation and anti-competitive after Eskom allegedly blacklisted Econ Oil and Energy based on unfounded suspicions and charges.

Econ Oil managing director Nothemba Mlonzi has alleged that the power utility blacklisted her company while those who have been involved in corruption are continuing to do business with the state-owned utility.

She said De Ruyter was the one who pursued the decision after he was appointed in January 2020.

This was after De Ruyter ordered the cancellation of a contract between Eskom and Econ Oil based on allegations of corruption. De Ruyter’s instruction came after a report by Bowmans Law Firm made severe findings against Econ Oil, claiming that the company had defrauded and overcharged Eskom by different amounts for the five-year contract it was awarded.

In March 2021, Eskom’s supplier review committee (SRC) gave notice to temporarily suspend Econ Oil from its database based on allegations that a corrupt relationship exists between Mlonzi and Eskom’s senior manager Noluthando Patricia Marah. The power utility claimed Marah interfered with Eskom’s procurement processes to benefit Econ Oil.

In a replying affidavit submitted to the Competition Tribunal, Mlonzi said the decision was taken without allowing Econ Oil to respond to the allegations. She added that the utility acted in a selective and discriminatory manner, saying other firms implicated in fraud and corruption continue to provide goods and services to Eskom.

Mlonzi said the power utility continues to do business with the companies such as ABB South Africa, Deloitte Consulting, and PWC Consulting, which have been implicated in criminal activities with Eskom.

She said this is because these are white-owned companies, which shows that Eskom has an agenda against transformation. Mlonzi said a day after his appointment, De Ruyter recommended to the board that the fuel oil tender should be cancelled due to allegations and corruption between suppliers and Eskom employees.

She said at that time De Ruyter told his staff that a new strategy for the procurement of fuel oil as a cost-saving measure should be considered.

“The Tribunal will note that Mr De Ruyter makes his cancellation recommendation a mere day after his appointment,” said Mlonzi.

She said in December 2020, De Ruyter instructed his subordinates not to deal with Econ Oil. Mlonzi said De Ruyter targeted her because he believed that it was questionable for Econ Oil to supply the majority of fuel oil volumes to Eskom.

“These chronological events clearly show that Mr De Ruyter played an active and leading role in the suspension and blacklisting of Econ Oil. I submit that the only plausible inference to be drawn is that Mr De Ruyter did not want Eskom to deal with Econ Oil,” Mlonzi said.

She said Eskom’s dogged pursuit of Econ Oil on groundless allegations while failing to pursue white suppliers implicated in serious criminal conduct with similar vigour, is evidence of Eskom’s lack of commitment to supporting and promoting transformation in the fuel market.

Eskom accused Mlonzi of unethical and improper conduct after Bowmans’ report also found that Marah, as head deputy chairperson and head of fundraising of the ANC Liliesleaf Farm branch, requested a donation from her ahead of the national elections campaign in 2014.

Mlonzi said this was unfair on her company as big corporates, including Eskom suppliers donate to political parties.

“At the time the donation was made, the Political Party Funding Act of 2018 had not come into effect. Econ Oil’s donation to the ANC would have been made public because it was not made with improper motives.”

Mlonzi said if this was wrong, companies such as African Rainbow Minerals (ARM), a supplier of coal to Eskom’s power stations, should not be allowed to do business with the power utility.

“The Independent Electoral Commission published declaration report shows that businesses donate to political parties. The report shows that on September 9, 2021, ARM donated over R5 million to the ANC. Eskom has, to my knowledge, not excluded ARM from doing business with Eskom on account of having made a political party donation to the ruling party”.

“It is not surprising that ARM has not been excluded from this because political party donations are not prohibited. But what Eskom’s exclusion of Econ Oil shows, for the same conduct from which ARM was not excluded, is Eskom’s selective prosecution,” said Mlonzi.

She said there was no evidence at all of any impropriety and wrongdoing, adding that Eskom was simply embarking on these processes to frustrate and invest in the ultimate liquidation and destruction of Econ Oil.

She added that the power utility’s conduct was to exclude Econ Oil from its supplier database and prevent the company from participating in the fuel oil market.

Eskom acting spokesperson Daphne Mokwena said the account offered by Mlonzi in the founding papers was not based on fact and Eskom maintains the position that Econ Oil was appropriately de-registered from its supplier database in the circumstances described in the answering affidavit.

Mlonzi on Saturday declined to comment on the matter. She said the facts in her affidavit were clear and she would comment any further.

De Ruyter also has another headache after his explosive claims that at least two members of President Cyril Ramaphosa’s cabinet were also a part of the rot that has characterised Eskom for the past 15 years.

Build One South Africa leader Mmusi Maimane this week opened a case of corruption against De Ruyter and the senior Cabinet minister he accused of being involved in the graft that has gripped the power utility.

According to Maimane, De Ruyter disclosed that while in the course and scope of his position of authority at Eskom, he had personal knowledge of various streams of evidence that prove corruption, theft, and fraud both from within and outside Eskom.

On Friday, the ANC secretary-general Fikile Mbalula announced that the ruling party had given De Ruyter seven days to respond to their demands to open a case against those ministers. Mbalula said if De Ruyter does not respond in the next seven days, the ANC will take further steps.

The party warned De Ruyter that in terms of the Prevention and Combating of Corrupt Activities Act, it is illegal for any person in a position of authority not to report an act or information of corruption or criminality.

De Ruyter has been informed by the ANC that should he fail to bring the information in his possession to the attention of law enforcement agencies in line with his obligations, it will lay criminal charges against him.

The United Democratic Movement (UDM) and 18 others have taken Eskom and the national government to court over load shedding. The group argues load shedding has become a human rights issue and that the government’s response to it has undermined fundamental human rights.

In his answering affidavit, De Ruyter said corruption had a profound effect on Eskom. He said it has compromised the utility’s financial position, board, and management structures, reduced its coal supply security, degraded its power stations through the use of out-specification coal, and negatively impacted its generation capacity.

Please note that we are still waiting for a comment from the Black Business Council.