HomeIndustry SectorsFinance and PolicyEskom defends appointment of Matjila as acting CEO

Eskom defends appointment of Matjila as acting CEO

South African opposition party the Democratic Alliance (DA) has expressed concern regarding the appointment of Collin Matjila as acting CEO of Eskom. Natasha Michael, DA shadow minister of public enterprise finds it concerning that Matjila is the CEO of trade union Cosatu’s investment arm, Kopano ke Matla, which in itself should render him unsuitable. “Cosatu forms part of the tripartite alliance, and therefore has major access to government decisions. This is a conflict of interest, which will open the power utility to more scandal, as was witnessed when Chancellor House linked firms were awarded tenders for the multi-billion rand Medupi project,” she says.

The controversy does not end here according to the DA: In April 2012, Matjila was reportedly forced to resign as chairman of construction group, Raubex, over Raubex’s involvement in Gauteng’s e-tolling project. In June 2012, following an investigation by the Financial Services Board (FSB) into alleged corruption and maladministration, Kopano ke Matla’s licence to manage employee benefits of 400,000 former Bophuthatswana employees was revoked. Matjila is also reported to have received R1.33 million from Kopano’s transactions through payments to his company Summerlane, which he described as personal commissions when confronted by FSB inspectors. FSB reportedly described the transaction as unusual and suspicious.

In addition Matjila was reportedly implicated in the controversial sale of the old Cosatu’s headquarters, and the purchase of the new headquarters. It has been reported that the old Cosatu headquarters was sold for R10 million less than its market value. Furthermore, the Sizwe Ntsaluba Gobodo audit found irregularities with regard to the purchase of the new Cosatu House building, which was reportedly purchased at an inflated price at over R50 million. Kopano ke Matla acted as transaction advisor on both deals.

“Despite the above-mentioned findings, Matjila, astonishingly continues to serve on the Eskom board,” Michael says. “In light of the on-going crisis at Eskom, questionable leadership, now more than ever, cannot be entertained. Matjila’s appointment and continued presence on the Eskom board is yet another example of how Jacob Zuma’s ANC is more interested in its politically connected elite − at the cost to the South African people. Eskom must urgently correct this mistake and appoint an appropriate acting CEO without delay.”

In defending the appointment of Collin Matjila as acting CEO on 27th March 2014, the utility argues says that it was prudent to select a candidate with suitable credentials from among board members, so as to allow management to continue to focus on operations. “Given the ongoing challenge of balancing electricity demand with constrained supply, it was prudent not to diminish operational management capacity in any way,” a release from Eskom says.

“Matjila was a unanimous decision by the board, based on his deep knowledge of and experience in the South African electricity industry emanating from his previous role as chairman of the National Energy Regulator of South Africa and from his current role as Eskom board member,” Zola Tsotsi, chairman of the Eskom board, says. “In addition, Matjila has insight into the requirements of municipalities, one of Eskom’s largest customer groups, which stems from his previous role as chairman of the South African Local Government Association.”

Eskom argues that Matjila has the requisite academic qualifications for the role of acting CEO. He graduated with a BA degree in law from the University of Lesotho in 1984, and an LLB from the University of the Witwatersrand in 1988. He also holds Management Advanced Programme (MAP) and Senior Executive Programme (SEP) diplomas from Harvard University (Boston, USA) obtained in 1999.

Matjila has conveyed to the board that he would not be interested in a permanent role as CEO of Eskom. In his temporary role, he is a competent decision-maker along with an executive committee of eight members, Eskom says. It also says that Matjila has relinquished all other Eskom board responsibilities and the board is satisfied that there is no conflict of interest. It says the appointment of Matjila in this short-term role was the most effective and least disruptive solution for Eskom. “The board is making good process with the appointment of a permanent CEO,” Tsotsi says.

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