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Former Eskom board member Mark Pamensky has told the Zondo commission that he was not involved in the irregular R1.6 billion prepayment for coal supply to the Gupta-owned company Tegeta, even though he admitted that he knew the Gupta brothers and their associate Salim Essa before his appointment.
Pamensky said he had known Essa since 2003, but he could not recall precisely where or how they met. Because they were both involved in the cellular industry, they became friends.
He said he was appointed to the Eskom board on December 11 2014 but only accepted his appointment a month later, after engaging with the department of public enterprises about his other directorships. He left Eskom in November 2016.
During that period, Pamensky said he had not been involved in any business in which Essa was, and also denied that he was aware Tegeta would purchase Optimum Coal Mine which was owned by mining giant Glencore at the time.
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“What I knew was from the press that they [Eskom] wanted to collect their money. Eskom was adamant in its head [former CEO Brian Molefe] that it wanted to collect the money,” said Pamensky.
The commission heard that before the Guptas bought Optimum from Glencore in late 2015, the company was fined R2.1 billion by Eskom for poor coal quality. However, after the transaction Eskom recalculated the penalty to R254 million.
Commission chairperson Deputy Chief Justice Raymond Zondo said he was shocked to learn that the Eskom board “mistakenly approved” the R1.6 billion prepayment for Tegeta after ex-Eskom board member Pat Naidoo told the commission that they were under the impression that the money was for the Glencore-owned Optimum.
Naidoo said the prepayment was believed to be beneficial to both Eskom and Optimum, which was under the threat of liquidation.
He said the rationale was that the prepayment was going to save jobs.
“I looked at the submission which motivated firstly that there is an agreement between Eskom and Optimum, and that Optimum required cash in advance to give them liquidity so they could get on with their business,” said Naidoo.
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However, on Wednesday another former board member Venete Klein told the commission that they were misled to believe that it was a business rescue.
Klein said: “Chairperson, all I can say to you, with the benefit of hindsight, I find that the wording was actually quite cunning, and management purposely put words there.”
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