Before his sudden resignation as Eskom CEO this week, André de Ruyter was being investigated by the power utility’s new board for alleged procurement irregularities.
While there is no evidence to suggest De Ruyter benefited from the alleged breech of regulations, he is the second executive at Megawatt Park to resign since the start of an investigation by the new board’s audit and risk subcommittee, chaired by chartered accountant Fathima Gany.
The first was the general manager for audit and risk, Nida Gafoor, who is said to have stepped down over “uncomfortable” questions raised by the new board, an Eskom insider told the Sunday Times.
Gafoor is one of several executives De Ruyter brought in during 2020 and 2021 as part of his attempts to turn the struggling utility around. She could not be reached for comment and did not respond to text messages.
The investigation concerns an alleged irregularity, flagged in March 2021 by a senior manager in Eskom’s loss control office, in the appointment process that led to Stephen Meijers being named COO of the Eskom Rotek Industries (ERI) subsidiary.
De Ruyter is said to have held the initial discussions with the executive headhunting firm Woodburn Mann Equity Partners, negotiating a price for its services without following Eskom’s procurement policies or the stipulations of the Public Finance Management Act (PFMA).
Gany’s investigation is into the circumstances around the contracting of Woodburn Mann.
Two sources with direct knowledge of the investigation said Eskom’s new external auditor, Deloitte, was also participating because the affair had an impact on the utility’s annual financial statements, which are several months late.
De Ruyter began discussions with Woodburn Mann about Meijers’ appointment in January 2020 — the same month he started work as CEO. The position was only created three months later, according to documents the Sunday Times has seen.
We answered all their questions and both teams said we had passed all the requirements they had
— Andrew Woodburn, MD Woodburn Mann
De Ruyter then allegedly negotiated the fee directly with the company. The Sunday Times has also learnt that at the time, Woodburn Mann was not part of Eskom’s panel for placement services.
Problems arose when the company’s invoice, for R680,000, was forwarded for payment and it was discovered that the Woodburn Mann — which also placed former Eskom CEO Phakamani Hadebe, COO Jan Oberholzer, CFO Caleb Cassim and De Ruyter himself — had not been formally contracted by Eskom.
In March last year, Dale Sicard, Eskom’s senior manager for PFMA compliance and loss control, asked the utility’s forensic and anti-corruption unit to investigate the circumstances under which the company was contracted.
Sicard told the Sunday Times he was not aware of any investigation and declined to comment further.
De Ruyter did not respond to calls and messages seeking comment this week.
Woodburn Mann MD Andrew Woodburn said his company had placed talent at Eskom for 30 years and had already been audited twice — by Eskom internal audit and an independent firm — over the placement of Meijers, and nothing untoward had been found.
“We answered all of their questions and both teams said we had passed all of their requirements that they had,” he said.
A source with close knowledge of the investigation said: “[Gany] isn’t happy because they were not getting the full story from the internal audit department inside Eskom … It was all about André’s conduct when they were recruiting Dr Meijers.”
Another insider said: “[Gafoor] also resigned about this, after she could not provide answers explaining why not much progress was made.”
This source said it appeared that the new board had been investigating De Ruyter since its appointment. It was also looking at his hiring of former Sasol employees, where he used to work himself, to come to work at Eskom.
Many believed the new board had been tasked with finding “any” dirt on on the outgoing Eskom boss, the source said.
The Sunday Times could not find any evidence to suggest De Ruyter’s resignation and the investigation were linked. The board did not respond to questions.
Announcing his departure on Wednesday, De Ruyter said he was “dependent on the support of the broader political economy”.
“Given recent media reports, I am unfortunately currently in a position where I do not regard that position as being tenable and I have accordingly decided to step back and afford the shareholder and board an opportunity to appoint a candidate to the position of group chief executive who may be better suited and equipped for the strategic and operational objectives at hand,” he said.
De Ruyter was referring to public attacks on himself and Eskom by several members of the executive, notably minerals & energy minister Gwede Mantashe who accused him and the entity of “agitating to overthrow the state” by allowing load-shedding to continue unabated.
South Africans endured extended stage 6 outages this week.
In the past two weeks, ANC presidency candidate Zweli Mkhize and other senior party members have been vocal about Eskom’s failure to ease load-shedding.
At the briefing on Wednesday De Ruyter and the new Eskom board did not address allegations of a chasm between them.
News24 has reported that he was sidelined in several critical meetings, and that the board was frustrating his efforts to stem load-shedding by refusing to sign a deal allowing the utility to buy nearly 600MW of energy from a private power producer.
Eskom board chair Mpho Makwana was also said to have delayed approval for a new National Transmission Company, part of the government’s plan to unbundle Eskom into three separate entities.
Makwana, who has not addressed the reports, said on Wednesday that his new board had resolved to be more hands-on and not “wait for monthly and quarterly reports”.
Since joining Eskom, De Ruyter has survived several previous attacks largely thanks to the support he received from his political bosses, public enterprises minister Pravin Gordhan and President Cyril Ramaphosa. But this week that support was conspicuous by its absence.
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