Business rescue documents reveals that Eskom paid Guptas mining company – Tegeta Exploration – a R587 million ‘pre-payment’ within six hours of South Africa’s major banks refusal to finance its bid to buy Optimum coal mines.
This was revealed by amaBhungane, who first reported the revelation that at a special late-night tender committee meeting, Eskom executives agreed to hand a Gupta company R587-million – money that was then used, two days later, to help pay the R2.15-billion purchase price for Optimum Coal mines.
The business rescue documents noted the process that was followed on 11 April 2016, in attaining the money needed to complete the purchase of the mine from Glencore.
Report had it that Tegeta received the money from Eskom through an extension of a contract to supply Eskom with coal. Eskom also confirmed that the deal was approved so Tegeta could open up new mining areas at Optimum’s Mpumalanga mine.
According to reports, business rescue practitioners refused to confirm or deny the existence of the report, but a copy of the documents seen gave the following detail of what happened on April 11:
- On that morning, Nazeem Howa, the chief executive of Gupta-owned Oakbay Investments, called the business rescue practitioners and asked for a meeting.
- At 10:00, Howa sat with the practitioners at Tegeta’s office in Sandton and delivered the bad news – Tegeta was R600-million short of the purchase price for Optimum Coal.
- At Howa’s request, the practitioners called an urgent meeting with Optimum’s three bank creditors – First Rand Bank, Investec and Nedbank – and a representative of Optimum’s then-owner, Glencore. At the meeting, held at about 13:30 at First Rand’s Sandton offices, the practitioners asked whether the consortium of banks would offer Tegeta a R600-million bridging loan.
- At 15:00, Marsden phoned Howa to tell him the banks had refused the request.
Tegeta is partly owned by the Gupta family through Oakbay Investments, while smaller stakes of the business are owned by President Jacob Zuma’s son Duduzane Zuma, Gupta-linked businessman Salim Essa and an opaque offshore company registered in the United Arab Emirates.
amaBhungane publication said leaked Eskom minutes, broadcast on Carte Blanche in June, proved that about six hours after Howa was informed that the banks would not stump up the funding, Eskom held a “special tender committee meeting” where it decided to hand Tegeta a R587-million prepayment for coal.
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Two days later, Tegeta delivered the full purchase price of R2.15-billion for Optimum Coal mines. Tegeta’s purchase of Optimum from Glencore has been muddied by allegations of political interference and favoritism, particularly directed at mines minister Mosebenzi Zwane and Eskom.
Eskom has repeatedly denied showing Tegeta favorable treatment.