* ANC calls reinstatement reckless but minister backs him
* Molefe named in anti-corruption report last year
* His return could open divides in the ANC
* Molefe supports nuclear power plant plan
(Adds comments by ANC source, political analyst, minister
By Nqobile Dludla
JOHANNESBURG, May 12 South Africa's state power
company on Friday reinstated its former chief executive Brian
Molefe just five months since he stepped down after being
implicated in a report by the country's anti-graft watchdog into
The return of Molefe, an ally of President Jacob Zuma, is
likely to deepen a division within the ANC ahead of a conference
in December where the party will choose its next leader.
It will also raise concerns among investors about
mismanagement and transparency at Eskom given the allegations of
Molefe being influenced by the Gupta family, who are close to
Molefe resigned in November last year after a report by the
Public Protector, a constitutionally mandated corruption
watchdog, raised questions over coal deals between Eskom and a
company controlled by the Gupta family.
Molefe and the Gupta family have denied any wrongdoing.
The ANC formally criticised Eskom's decision to reinstate
Molefe, calling it "unfortunate and reckless", given that the
Public Protector's report has not yet been completed.
But Public Enterprises Minister Lynne Brown supported
Molefe's reinstatement and a senior ANC source told Reuters
President Zuma also backed the return of one of his allies.
Zuma's spokesman did not answer Reuters' calls requesting
The ANC has become increasingly divided as it prepares to
pick Zuma's successor. A faction supportive of Zuma wants former
African Union chairwoman Nkosazana Dlamini-Zuma to take over,
while another section backs Deputy President Cyril Ramaphosa.
"Molefe's comeback is just going to make a bad situation
worse in the party," the ANC source said.
His return follows a refusal by Brown to approve his 30
million-rand ($2.24 million) pension payout.
"Most of the options discussed were not mutually agreeable
and the board decided that it was actually optimum to rescind
its decision to grant him early retirement," said Khulani Qoma,
spokesman for Eskom's board. "By virtue of that, then legally
... you need to then proceed and reinstate him."
Molefe is supportive of a proposed project to build a fleet
of nuclear power plants in the country that could cost up to $75
billion. Investors see the project as a major risk to South
Africa's financial stability.
"The Brian Molefe-Eskom saga as it unfolded further on
Friday would be rejected as too improbable if submitted as a
script for soap opera," NKC African Economics political analyst
Gary van Staden said in a note.
"It is the reality of a twisted and distorted political
environment in South Africa."
The main opposition Democratic Alliance called for Molefe's
reinstatement to be set aside by a court.
"In view of the spurious reasons given and the complete
irrationality of the decision, we will once again be approaching
the courts, this time to set aside Brian Molefe’s redeployment’
by the ANC government to Eskom," DA shadow Minister of Public
Enterprises Natasha Mazzone said in a statement.
Molefe, who quit as a member of parliament on Friday after
less than three months in the role, was widely touted to replace
Pravin Gordhan as finance minister but lost out to Malusi Gigaba
in a cabinet shake-up in late March.
When he stepped down from Eskom a week after the release of
the Public Protector's "State of Capture' report, he said that
quitting was not an admission of wrongdoing but was in the best
interests of Eskom and good corporate governance.
Eskom said it was excited to have Molefe back as the CEO and
he would resume his duties on the terms of his original
employment agreement. Reuters was not immediately able to
contact Molefe for comment via Eskom.
Molefe's first stint at Eskom began in April 2015, when he
was drafted in from state rail freight firm Transnet
as the utility battled against power shortages. He is largely
credited with stabilising electricity supply.
He returns to Eskom in the middle of the construction of
three coal-fired power stations.
($1 = 13.4182 rand)
(Additional reporting by Mfuneko Toyana, Wendell Roelf; Writing
by Joe Brock and Tiisetso Motsoeneng; Editing by Jane Merriman
and David Goodman)