It isn’t every day that you hear a good story about Eskom, which recently plunged SA into load shedding in the middle of a pandemic. But here it is – and it’s a really good one, too.
The guys in suits at the top of Eskom, who get paid millions to keep the lights on, change A LOT. Some of the ones in charge a few years ago, like so many people in government at the time, spent a lot of their time trying to help the Guptas.
But the law appears to be finally catching up to both the Guptas and their friends formerly at Eskom. Any day now, the lot of them will receive envelopes with a postage stamp from Pretoria, demanding that they pay Eskom part of R3.8 billion that they all allegedly stole.
That’s because on Monday, Eskom and the Special Investigating Unit (SIU) went to court to try to get former Eskom top dogs to pay back the money that Eskom says were stolen on behalf of the Gupta family.
The SIU is a government body in charge of getting back money stolen from government – more on this later – and the Eskom top dogs in question are the then board members and executives. You may have heard of former Eskom top bosses Matshela Koko and Brian Molefe, to name just two. (All have denied wrongdoing.)
Here’s how it went down.
The golden age of looting
To understand what happened, we need to go back a few years.
The years 2015 to early 2017 were the golden years of state capture. The brothers Ajay, Rajesh and Atul Gupta, who were Jacob Zuma’s friends, flourished, benefiting from dodgy government contracts left, right and centre.
They were central to the gutting of several government entities and, until Monday, it seemed like they were getting away with it. The brothers boarded a plane to Dubai after all the allegations against them came out, and by all accounts, have been happily spending their stolen loot in the sunny emirate ever since.
In those golden years of state capture, the Gupta family decided to get into the mining business. They were interested in one company in particular – Optimum Holdings, which owned Optimum Coal Mine, a mine which supplies coal to one of Eskom’s power stations.
But the Guptas hit a snag. Turns out the mine already had owners, and they weren’t interested in selling for the price that the Guptas wanted to pay.
Ever the enterprising businessmen, the Guptas got creative, with a little help from their connected friends.
The then-minister in charge of mining, Mosebenzi Zwane, allegedly travelled to Switzerland to help to persuade the mine’s owners at the time to sell. (Zwane and the others involved in this saga have denied wrongdoing.)
This is where the story gets really complicated, but in a nutshell, Zwane and Molefe allegedly strong-armed the owners, mining giant Glencore, into letting go of the mine. (That’s a story for another day, and we should be clear that Glencore does not come out looking squeaky clean in that saga, either. This fascinating piece by accountant Khaya Sithole tells another side of the story and is really worth reading. But for now, back to Optimum.)
The Guptas also had the good fortune of having friends among the bosses at Eskom, who allegedly paid them some R600 million, supposedly as a prepayment for delivering coal to Eskom. In other words, before the Guptas had dug a single gram of carbon out of the ground, Eskom had paid them millions for work they had yet to do.
That R600 million is an important number, because it just so happens that that was roughly the amount the Guptas still needed to buy the mine they wanted.
So, to sum things up until now: the Gupta’s government buddies essentially got the mine for them, and then proceeded to help them pay for it, too.
But it gets worse.
Then, allegedly with the help of their friends at Eskom, the Guptas started providing bad quality coal to Eskom’s power plant, from the mine they had just bought, in what Eskom now says was a “conspiracy” that cost the country billions.
Ask any mine worker at that ill-fated mine, and they will tell you about the dodgy quality of the coal and how it damaged the power station’s machinery.
And just in case you thought that was where the story ended… there’s more.
Enter Trillian, a company run by more of the Gupta’s friends. You see, millions-for-no-work as a career path was really in vogue at the time, and apparently Trillian did not want to miss out on the action.
So the company allegedly siphoned off another R600 million-or-so from Eskom.
What Trillian did for Eskom remains a mystery, as they were paid without a contract ever being signed.
(Eskom’s current leadership has also gone to court to try to claw back that money from Trillian, but the company says it is broke.)
Undoubtedly, the Guptas thought they could get away with it all. And with public confidence in our police and prosecuting authority at an all time low, who could blame them?
But they underestimated South Africa in an important way: the drafters of our Constitution made sure that there were many ways for wrongdoers and looters to be held accountable. Even though our state has been weakened in some ways by corruption and state capture, it is still robust in other ways.
Government is big, extremely complex, and made of slightly stronger stuff than most people might think.
Enter the Special Investigative Unit (SIU).
What’s the SIU?
The SIU is a unique government body, which is in charge of getting money back that is stolen from government. Yes, this is a thing.
So, if you are supposed to supply government with apples, and fail to deliver on the apples, the SIU will sue you in civil court for the money that government has paid you.
In recent years, it has actually been really successful, although it doesn’t get a lot of credit for it.
The SIU has already gone after billions allegedly stolen from the state, and is quietly undoing dodgy contracts in civil courts all over the country, mostly away from the media’s attention.
Will we ever get the money back?
It’s been years since the Gupta’s held Eskom upside down and shook it until all the change fell from its pockets. What if they have already spent the money that they already stole?
Eskom spokesperson Sikhonathi Mantshantsha acknowledged on Cape Talk Radio this week that the looters could have spent a lot of money since it was stolen from Eskom, and that it would be tricky to recover the full R3.8 billion.
But he was adamant that Eskom was going to put up a fight.
“We will indeed end up owning things that belong to some of them at this point. They may not be the full R4-billion but Eskom does not have the option of doing nothing in the face of this kind of injustice,” said Mantshantsha.
Now that’s the kind of thing we at explain like to hear.