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Eskom board braced for battle over 'unlawful' R8bn oil supply contract

Eskom's board is bracing for battle with Nazeer Cassim SC over his recommendation that it be held accountable for the awarding of an R8bn oil supply contract to Econ Oil.

The Competitions Tribunal has dismissed Econ Oil bid for relief after Eskom suspended it as a supplier following a Bowmans report which found it supplied fuel at inflated costs.
The Competitions Tribunal has dismissed Econ Oil bid for relief after Eskom suspended it as a supplier following a Bowmans report which found it supplied fuel at inflated costs. (Eskom)

Eskom's board is bracing for battle with Nazeer Cassim SC over his recommendation that it be held accountable for the awarding of an R8bn oil supply contract to Econ Oil.

In his report recommending the dismissal of former Eskom procurement chief Solly Tshitangano, Cassim recommended that action also be taken against the board for awarding Econ the contract.

Internal Eskom documents the Sunday Times obtained show that two directors said several colleagues were upset by Cassim's finding.

The board is likely to respond after judgment in a civil case between Eskom and Econ that began this week in the Johannesburg high court. In the case, judge Bashier Vally said the board did not perform its fiduciary duty. Vally heard arguments in which Eskom applied to review and set aside the Econ contract.

Vally's remarks on the board came in response to Eskom's lawyer, Wim Trengove SC, saying Eskom could not explain why its board approved an "unlawful" contract to Econ Oil. Trengove said the board's approval was "the elephant in the room".

Board chair Malegapuru Makgoba said Tshitangano's disciplinary inquiry "never involved any member of the board".

"I think it's important to wait for the judgment," he said.

Tshitangano has referred the board's conduct to parliament and the auditor-general for investigation.

In a letter to parliament's standing committee on public accounts, he said a report on his allegations of racism against Eskom CEO André de Ruyter sought to absolve Eskom from complying with its constitutional obligations. The report, by Ishmael Semenya SC, dismissed Tshitangano's complaints.

Tshitangano has accused the board of "noncompliance" with the constitution and the Public Finance Management Act.


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