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SOE identifies R1 billion corruption scheme involving Eskom employees after André de Ruyter’s reporting and warnings were disregarded written BY Ronelle Snyders.
The Special Investigating Unit (SIU) on Wednesday said it had launched a robust investigation into corruption at Eskom, revealing worrying schemes involving employees that manipulate procurement processes to obtain more than R1 billion for their own gain.
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This investigative effort, broad in scope and complex in detail, is a significant step towards addressing the rampant corruption plaguing South Africa’s power utility – something that André de Ruyter reported and warned about without anyone heeding.
Advocate Andy Mothibi, head of the SIU, addressed the Standing Committee on Public Accounts (Scopa) and emphasised the need for greater scrutiny and transparency in Eskom’s operations.
Mothibi outlined urgent strategies the SOE is using, including the seizure of more than 500 laptops of identified employees as part of a comprehensive effort to ensure accountability. He noted that while thorough vetting of officials at Eskom upon appointment was crucial, it was not sufficient.
“SARS is already very advanced in investigating the tax affairs of the vendors, other entities and Eskom employees, while the SIU has already engaged with Eskom to confiscate the laptops of all identified individuals. To date, more than 530 laptops have been confiscated,” Mothibi said.
The investigations span almost two decades for the period between 1 January 2003 and 2 December 2022, and focus on mismanaged projects, including the Medupi, Kusile and Ingula construction projects, with estimated losses amounting to a staggering R200 billion – exactly what André de Ruyter has reported since his appointment at the time.
According to the SIU, tax matters are already being scrutinised by the South African Revenue Service (SARS), which is well positioned to address the tax affairs of sellers and Eskom employees involved in these questionable activities.
Mothibi said in his speech that the investigation revealed a scheme that concealed funds in smaller contract categories to evade strict supervision, with transactions allegedly processed after hours, further indicating the intentional nature of the misappropriation.
Alarmingly, 334 Eskom employees were found with financial ties to sellers, and a staggering 5 464 individuals failed to declare any conflict of interest.
“Some of them were done after hours – not because they were committed to ensuring that the work was done, but as part of the modus operandi,” Mothibi said.
The SIU’s findings identified three separate groups of companies that are engaged in questionable practices that use the Request for Quotation (RFQ) process to defraud Eskom. These groups consist of 23 sellers worth R1,8 billion, 31 sellers worth R1,7 billion, and 12 sellers whose purchase orders are estimated to be R700 million, all across 15 power stations.
It is worth noting that the investigation linked senior Eskom employees to state capture operations and concluded a controversial sale agreement with Tegeta for coal supply to the Majuba power station worth R3,7 billion.
The SIU’s competence extends beyond procurement malpractice to cover R1,2 billion of mismanaged cloud computing and software licensing contracts with SAP, which the Special Tribunal rejected.
Another concern raised included breaches in emergency security contracts, where protocols were not adequately followed, allowing contracts to be awarded without proper vetting, and where services were subcontracted with minimal ability to deliver.
“The SIU identified security contracts awarded in an emergency where Eskom employees were scheduled to declare an emergency seven days in advance to companies that were appointed but did not have the capacity to undertake the work and provide the service and subcontracted 90% of the work to third parties,” Mothibi said.
It is shocking that every case involving fraud is declared with surprise and shock, while the taxpayers, honest contractors as well as people like André de Ruyter have been reporting the offender for years.
The slow modus operandi of the SOE and SARS is worrying as it costs the country billions.
The big concern is – when will these people be held accountable and why does the reader never see the positive outcome of money being recovered?
Is this just another matter of all seriousness that is going to die a slow death because the Jan public doesn’t hammer on it?
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