Get orange overalls ready for Koko!

We are encouraged by the increase in state capture prosecutions and welcome government promises of increased funding for specialist services for the NPA

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OUTA is standing up against government corruption and mismanagement. Our work is made possible though donations by our paying supporters.

27/10/2022 13:05:59

.Picture: Moneyweb / OUTA

Get orange overalls ready for Koko!

The Organisation Undoing Tax Abuse (OUTA) welcomes the announcement that Eskom’s former head of generation, Matshela Koko, his wife Mosima and his stepdaughter Koketso Choma were arrested early this morning in connection with state capture allegations. The charges against the trio relate to a multibillion-rand contract between Eskom and Swiss engineering company Asea Brown Boveri (ABB) in 2015. Koko’s former close friend and director of the Leago Group, Thabo Mokwena, was also arrested this morning on the same charges.

ABB subcontracted a contract to Impulse International, a South African company where Choma was a shareholder and non-executive director. Impulse netted at least R1bn from the deal, of which Choma received R30 million. Some of this money allegedly flowed to Koko, who was placed on special leave in May 2017 when the allegations were investigated internally by Eskom.

The controversial executive resigned from Eskom in February 2018 during his disciplinary hearing, without admitting any guilt. The disciplinary charges against Koko were based on his failure to declare his relationship with Choma and, indirectly, Impulse International.

The sub-contract with Impulse International was entered into after a sub-contract with Leago Engineering was cancelled. Mokwena, director of Leago, was a university friend of Koko and also a groomsman at his wedding. The relationship between the two soured when Mokwena allegedly did not share the payments he received from ABB with Koko.

Koko worked for Eskom since 1996 and in October 2015 became the head of generation at the power utility. In December 2016, Koko was appointed as interim CEO of Eskom. One of his executive functions was the overseeing of coal contracts.

Evidence found in the Gupta mails and further exposed at the Zondo Commission suggests that Koko used his position to help the Guptas buy Optimum Coal Holdings and its Optimum and Koornfontein coal mines from Glencore. This was done by putting these businesses under financial pressure to force their sale.

Eskom then assisted the Guptas fund the purchase of the Optimum mine by authorising prepayment of R659 million to the Gupta-owned Tegeta Exploration and Resources (Pty) Ltd for coal contracts – a contract that Koko had overseen. The prepayment was approved during the same period when Tegeta needed R600 million of bridging finance to acquire the mine.

Throughout the Optimum financial collapse and subsequent sale, Eskom had insisted that the R2.177 billion penalty would not be waived for Glencore or any new owner. But in July 2017 at a media briefing Eskom publicly confirmed that the fine had been reduced to R577 million, saying the coal quality readings on which it had based the penalties were wrong. At the same briefing Eskom also confirmed the R1.6 billion guarantee to Tegeta, which it had previously denied.

OUTA laid criminal charges of corruption and fraud against Koko relating to the Optimum transactions.

Our investigation of the Gupta mails also exposed Koko’s close links to the Gupta family. E-mails reveal that he stayed at Dubai’s luxurious Oberoi Hotel, with the Guptas picking up the bill for his stay.  

Rudie Heyneke, OUTA’s portfolio manager for state capture, said today’s arrests bring more hope in the fight against corruption and bringing state capture suspects to book. “We have seen several state capture related cases in court the past few months and South Africans should be encouraged by that. It is now in the hands of the National Prosecuting Authority who must ensure that we see speedy trials and positive outcomes.”

OUTA also welcomed the promise of more funds for opposing state capture in yesterday’s medium-term budget budget policy statement. This includes the Department of Justice and Constitutional Development reprioritizing funds to the Financial Intelligence Centre to implement the recommendations from the State Capture Commission and the Financial Action Task Force, and funding for the National Prosecuting Authority (NPA) to increase capacity in specialised tax units and the Investigating Directorate, and to fund specialist services in the NPA. “Additional funding will help the NPA to acquire top legal minds and forensic experts to assist in these corruption cases,” says Heyneke.

More information

A soundclip with comment by OUTA's Rudie Heyneke is here.

A copy of the charge sheet sheet in the 2018 Eskom disciplinary case against Koko (he resigned before it finished) is here.

A copy of the invoice and e-mails for Matshela Koko’s Dubai trip, paid for by the Guptas, is here.

OUTA laid corruption charges against Koko in 2017: see here.


Help us oppose corruption

OUTA is standing up against government corruption and mismanagement. 

Our work is made possible though donations by our paying supporters.

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In 2022, we’re in court challenging the AARTO law, the Karpowership generation licences and SANRAL’s secrecy over toll profits.
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