Former Eskom CEO Brian Molefe started planning his exit from the power utility about three months before the release of former public protector Thuli Madonsela’s State of Capture report.
Appearing before Parliament’s public enterprises committee, which is holding an inquiry into the capture of state-owned entities, Sibusiso Luthuli, the CEO of the Eskom Pension and Provident Fund, revealed on Friday that Eskom first approached the fund in August asking for various calculations and scenarios in terms of a pension payout for Molefe.
This could suggest that Molefe knew all along that the State of Capture report would reveal damning details about his association with the controversial Gupta family and that he wanted to draw as much as he could from the power utility before quitting.
The report was released in November 2016 and a few weeks later, Molefe announced his resignation from Eskom.
Molefe received a R30.1m "golden handshake" from the power utility after he left its employ in December 2016, despite having worked for only 16 months.
The public enterprises committee on Friday interrogated Molefe’s pension and the calculation thereof.
ANC MP Girly Nobanda said it was suspicious that Molefe started inquiring about his pension in August, a few months before he stepped down.
"From all these dates, didn’t this [raise red flags] … we are getting these requests to calculate pensions and all that in August and then in November [Molefe] is stepping down. To me, looking at these dates, it says there is something wrong here … the dates tell a story."
DA MP and public enterprises spokeswoman Natasha Mazzone also said Molefe’s inquiries should have raised red flags. EFF chief whip Floyd Shivambu said it appeared the pension fund was being used to launder money and the matter should be further investigated.
Luthuli suggested the utility had misrepresented Molefe’s employment status, which allowed him to be a member of the fund. Molefe was employed on a five-year contract and, according to the fund’s rules, only permanent employees qualify. Luthuli said Eskom had submitted Molefe’s file when he joined, which was marked PPX, denoting that he was a permanent employee but, in fact, he was on a five-year contract.
Explaining how the pension amount was calculated, Luthuli said Eskom had bought Molefe additional service in years, which was permissible under the fund’s rules. This, in theory, meant Molefe had served an additional 156 months on top of the 16 months he had actually served, said Luthuli.
He said the final R30.1m pension was based on a complex actuarial calculation, which included Molefe’s annual salary of R5.6m, the additional 156 months bought by Eskom and the fact that he had married a younger wife in December 2016 [this further pushed up his pension].
Molefe had also transferred R4.2m he had in pension with his former employer, Transnet, to the Eskom pension fund.
Luthuli said then Eskom board chairman Ben Ngubane signed off on Molefe’s early retirement and requested that penalties be waived.
The fund’s rules allow employees to take early retirement at 50, based on the employer’s discretion. Molefe was turning 50 in January 2017 and so the purchase of the additional service — 156 months, or 13 years — theoretically meant he was retiring at 63.
Following widespread condemnation, his pension payouts were suspended earlier in 2017 pending a probe and the conclusion of a court case brought by trade union Solidarity.
Molefe became an ANC MP in February, but returned to Eskom in May after Public Enterprises Minister Lynne Brown refused to approve the R30.1m pension.
Less than a month into his job at Eskom‚ Brown instructed the board of Eskom to rescind its decision to reappoint Molefe. Eskom formally dismissed him on June 2.
Public Protector Busisiwe Mkhwebane is also investigating the decision to award Molefe the R30.1m pension.
Luthuli told MPs on Friday that they had received correspondence from the Hawks indicating their desire to investigate Molefe’s pension matter.
Efforts to get comment from Molefe were unsuccessful.
On Friday, it emerged that the Gupta-linked Black First Land First (BLF) had written a letter to Parliament, threatening legal action should the public enterprises portfolio committee continue with the inquiry.
BLF said in the letter the inquiry’s direction was not clear and it appeared to be a witch-hunt against the Guptas.
MPs dismissed the letter and vowed to continue with the inquiry. Brown has also written to the committee.
Other ANC MPs, and Brown, have raised concerns about the inquiry’s legal standing.
The parliamentary committee is expected to continue with its work this week.