South Africa’s State-owned power utility, Eskom, has been implicated in the “State Capture” report of the Public Protector (Ombudsman) which was released Wednesday.

The report has highlighted that Eskom indulged in alleged irregular awarding of contracts to businesses linked to the Gupta family, especially a contract to Tegeta and contracts awarded by Eskom to the Gupta-owned Optimum Mines.

The report, compiled by the former Public Protector, who has just completed here term of officer, regarding the exercise of undue influence on government leaders by the Gupta family indicates that monies for the Tegeta transaction which were handled by the Bank of Baroda did not comply with the prescripts of the law.

Accordingly, Tegeta may have contravened South African financial regulations, which is an offence under South African law and could lead to a fine of R10 million rand or a period of approximately 10 years in jail.

The Public Protector has found that during the period Aug 2, 2015 and March 22, 2016, Eskom Chief Executive Officer Brian Molefe called Ajay Gupta, a member of the Gupta family, a total of 44 times and Ajay Gupta called Molefe 14 times.

The report states that between March 23 and April 30, a Ms Ragavan, an employee of the Gupta family businesses, made 11 calls to Molefe and sent four text messages to him.

The Public Protector also placed Molefe several times in the vicinity of the Gupta compound in Saxonworld, north of Johannesburg. The report concludes that an unusually close relationship existed between the Eskom CEO and the Gupta family.

The report has also clarified what happened at Denel, a State-owned armaments industry enterprise, which entered into a contractual relationship with the Gupta-owned VR Laser which operates an arms business throughout Asia.

The removal of former Denel CEO Riaad Saloogee and other members of the board and the executive paved the way for the Gupta business to enter into a lucrative transaction with Denel, the report says.

This came after Denel dissolved its relationship with Britain’s BAE Systems, a link dating back to the days of the arms deal. When heads began to roll at senior levels at Denel in 2016, concerns of Gupta involvement mounted.

The Public Protector’s report says Denel bought a company called LSSA, an armoured vehicle manufacturer, from BAE before the new board was appointed.


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