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Eskom: What oversight?

Eskom’s governance is not helped by the fact that it has only one shareholder

Mentioned in this Article

FM Edition:

Might an unassuming 44-year- old accountant, Mark Pamensky, hold the golden thread to understanding the rotten relationship between the Guptas and Eskom? Last week, after studiously ignoring a barrage of questions from the Financial Mail over his starring role in Thuli Madonsela’s state-capture report, Pamensky unceremoniously quit as a nonexecutive director of Eskom.

Pamensky and Eskom chairman Ben Ngubane may be hoping his departure will short-circuit awkward questions when the judicial commission into state capture begins, about the parastatal’s deeply conflicted board and the Gupta family. You can bet it won’t.

But first, a précis of the background.

From 2007, Pamensky was one of the three men who sweated to build Blue Label Telecoms — the high-flying prepaid airtime company which is buying 45% of Cell C — alongside brothers Brett and Mark Levy.

Mark and Brett were joint best men at Pamensky’s wedding, their families braaied together and, as neighbours, Brett and Pamensky would chat over the fence.

Unusually, all three even shared one large, chaotic office on the second floor of Blue Label’s Sandton HQ, surrounded by framed collectibles (such as a signed picture of Barack Obama during his inauguration) and a trademark wall of empty Blue Label whisky bottles, collected to commemorate each deal.

Yet below the radar — and unbeknown to the Levys — Pamensky had been hired as a director of the Gupta-owned Oakbay Resources in September 2014.

Just three months later, Pamensky was parachuted in as a director of Eskom — a curious decision, since he sat on no other state-owned boards. Why this happened, no-one knows. But conspiracy theories abound that the Guptas pulled the strings to get him hired.

Brett Levy told BizNews that the brothers learnt of Pamensky’s appointment to Oakbay only four months after the fact. "I was totally against his appointment and recommended he withdraw," he said.

One Saturday morning, Pamensky asked to meet the Levys. Out of the blue, he told them he wanted to quit to devote his time to his property business.

"It was like my wife of 20 years saying she was leaving me," Levy told BizNews.

Financially, it was a curious decision too. At Blue Label, during his last two years, Pamensky took home R13.6m. When he swapped allegiance to the Guptas, he forfeited this, and his outstanding share options.

Oakbay’s annual report reveals that he got just R100,000 in director’s fees, while at Eskom, he earned R399,000 per year. It seems precious little reward for choosing the wrong friends.

Asked about his motivation last week, Pamensky said he wouldn’t answer questions now, but would submit an affidavit to the commission of inquiry.

Of course, he wasn’t the only Eskom director with links to the Guptas. Madonsela’s report says others in this position included CEO Brian Molefe (who has since resigned), Devapushpum Naidoo, Nazia Carrim and Mariam Cassim. It’s ominous, when you consider how Eskom bent over backwards to help the Guptas .

Madonsela said Pamensky’s role at Eskom meant he could have had "access to privileged or sensitive information regarding Optimum Coal and various Eskom contracts" — giving the Guptas "an unfair advantage" over rival companies.

Eskom’s argument is that Pamensky wasn’t part of its tender committee, so couldn’t have swung deals. Now that is true — but far from the whole story.

What Eskom didn’t say is that Pamensky was part of its investment and finance committee which oversees Eskom’s "investment strategy". As it turns out, one of that committee’s tasks (according to Eskom’s annual report) was to discuss how "the nuclear programme DRA spend to date amounted to R475m".

Asked what this meant, Eskom said it meant the planning for SA’s nuclear programme — including environmental assessments, nuclear seismic analysis, and the purchase of land for any nuclear plants.

Now, if Eskom thinks there’s nothing wrong in one of its directors, who happens to be a director at the Guptas’ uranium company, taking decisions on investing in SA’s nuclear future, it’s a searing indictment.

On this point, Eskom says Pamensky "recused himself at all times where a conflict of interest was identified". But without laying bare its records, questions over what he did at Eskom continue to swirl.

If Pamensky, or public enterprises minister Lynne Brown, thinks his resignation will ensure these questions vanish, it will be yet another error of judgment.