Yesterday, global ratings agency S&P downgraded Eskom’s long-term foreign and local currency corporate credit rating to ‘CCC+’ from ‘B-’.
The ratings firm went as far as to add that the outlook remains negative.
According to Ben Theron, chief operations officer at OUTA, the S&P downgrade of Eskom to “substantial risk” as an investment destination, with warnings of possible default, illustrates the results of massive, systematic mismanagement of Eskom and the state’s failure to do anything to hold executives, board members or those implicated – like Anoj Singh – to account.
“It is essential that the Hawks and the National Prosecuting Authority take action without fear or favour against senior public officials like Anoj Singh who are implicated in corruption,” says Theron.
The Public Investment Corporation recently had to provide a hurried R5 billion bridging loan to Eskom so it wouldn’t default on loan payments. Read more: Multiple financiers lend Eskom R20 billion credit facility
“South Africans should not be expected to have to pay substantial increases in electricity prices and to have to foot further state bailouts for Eskom because of financial mismanagement and looting by failed executives who are allowed to avoid accountability,” states Theron.
Failure to prosecute possible reason for S&P downgrade
“We demand that Singh and his ilk are prosecuted and that the reasons for the losses are established and the missing money sought.”
Last month it emerged that Singh probably lied to Parliamentary inquiry, to cover up Eskom’s illicit payments to consultancies McKinsey and Trillian.
In December, the Asset Forfeiture Unit obtained a preservation order for R1.595 billion against McKinsey, Trillian and eight individuals, arising from the Eskom payments, plus interest at 15.5%. Singh, accused of authorising the Eskom payments, was not among them.
Singh resigned as Eskom CFO in January pending a disciplinary hearing, leaving a trail of unanswered questions over Eskom’s chaotic financials throughout his reign.
“Anoj Singh was instrumental in the siphoning of funds out of Eskom coffers for the ultimate benefit of the Guptas, so OUTA wants Singh to face both criminal charges and civil action to recover the ill-gotten funds,” says Ronald Chauke, OUTA’s Portfolio Manager for Energy.
“Resigning should not allow him to avoid prosecution,” adds Theron.
During the ongoing parliamentary inquiry into Eskom, then MP Pravin Gordhan told Singh that he had been part of bringing Eskom, the biggest utility in Africa, to its knees.
In August 2017, OUTA laid charges of corruption and financial misconduct against Anoj Singh at Randburg Police Station. In September, OUTA filed a complaint against Singh to the South African Institute for Chartered Accountants, to have him barred from practising as an accountant or CFO. Neither case has been finalised.