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UPDATE 2-Crisis at South Africa's Eskom deepens as chairman resigns
June 13, 2017 / 6:25 AM / 5 months ago

UPDATE 2-Crisis at South Africa's Eskom deepens as chairman resigns

(Adds analyst, ANC comment)

By Mfuneko Toyana and Tiisetso Motsoeneng

JOHANNESBURG, June 13 (Reuters) - Eskom’s chairman quit on Tuesday, worsening a growing leadership crisis at the South African power utility, which is at the centre of influence-peddling allegations.

Ben Ngubane, who had been chairman since 2015, is leaving two weeks after the government reversed Eskom’s decision to reinstate Brian Molefe as chief executive.

The chairman’s departure comes a day after a South African lawmaker said parliament would launch a graft and governance probe into the state-owned company.

Ngubane did not respond to requests for comment on Tuesday, but Eskom board spokesman Khulani Qoma told 702 Talk Radio: “He said to me it was time to move on for personal reasons”.

Reports on leaked documents by non-profit investigative journalism group Amabhungane have put Eskom at the centre of allegations of improper dealings in government contracts by business friends of President Jacob Zuma.

Eskom was also named in a report by the Public Protector, a constitutionally mandated corruption watchdog, which raised questions over coal deals between the utility and a company controlled by the Gupta family, business friends of Zuma.

Qoma said on Monday that Ngubane had said that “the board would welcome any investigation into the affairs of Eskom”.

“COMPLEX SITUATION”

Ngubane’s departure leaves Eskom without a leader as Matshela Koko, who had been acting CEO until last month, has been suspended after the utility’s board said it would investigate his conduct.

“Ngubane has been effectively running Eskom. I think this put him in an impossible and complex situation that basically he would rather be without,” Peter Attard Montalto, an analyst at Nomura International in London, said in a note.

Eskom, which provides virtually all the power for Africa’s most industrialised economy, has also provoked infighting in the ruling African National Congress (ANC) over the reinstatement and subsequent departure of Zuma ally Molefe.

“We view this resignation as an attempt to avoid being held accountable for his role in recent events at Eskom,” the ANC said in a statement. “As chairperson of the board, Dr Ngubane was central in processes which led to the now rescinded reappointment of Mr Brian Molefe at Eskom.”

South Africa’s Public Enterprises Minister Lynne Brown has appointed board member Zethembe Khoza as acting chairman of Eskom, her office said in a statement.

Khoza assumes the role in the middle of the building of three new coal-fired power stations, and Eskom is also considering building a second nuclear plant. (Additional reporting by Ed Stoddard; Editing by James Macharia and Alexander Smith)

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