Eskom Inquiry: Anton Minaar & postponement of Anoj Singh

Public Enterprises

05 December 2017

Chairperson: Ms D Rantho (ANC)

Eskom Inquiry: Anton Minaar & postponement of Anoj Singh 3
Eskom Inquiry: Anton Minaar & postponement of Anoj Singh 2
Eskom Inquiry: Anton Minaar & postponement of Anoj Singh 1

Record of Events by Anton Minnaar

Meeting Summary

The Chairperson announced that the Eskom Board and Mr Anoj Singh would appear before the Committee. However, before the Committee engaged with the Board, they would hear from Mr Minnaar, Executive Support Manager at Eskom, who had to be questioned before the Committee listened to the Board, on the narrow issue of how it came about that Mr Molefe retired from Eskom after 18 months with a R30 million pension package.

Mr Minnaar began by a reading a document entitled ‘Sequence of Events’ which listed all the processes that he had engaged in relating to Mr Molefe’s contract and retirement package.

He explained the confusion when Mr Molefe was brought into Eskom, even before a contract had been drawn up for his employment. Initially, Mr Molefe’s was appointed, as were all other executive staff members at Eskom, on a permanent basis. A month later, Minister Brown, conveyed to Eskom the Cabinet decision that Mr Molefe had to be appointed on a five-year contract. It was not a practice of Eskom to appoint executive staff on short-term contracts. When his salary was not increased to a comprehensive package, it was determined that he would be considered a permanent employee on a five-year fixed term contract. The permanent status allowed Eskom to provide benefits and bonuses and to put Mr Molefe on the Eskom Pension and Provident Fund, and to buy back 10 years’ service to allow him to retire at age 50. If he were on contract, he would not have been permitted to join the Pension Fund. His intention was to retire at the end of December 2017 once he had turned 50. The Pension Fund estimated that it would cost Eskom R25 million for Mr Molefe’s retirement Fund but, after the estimation was made, he married a younger woman and so his pension was adjusted to just over R30 million. Eskom was initially concerned about the difference between the estimated and actual amount that the company had to pay the Pension Fund, but did not have a problem with the amount of R30 million as he had served Eskom well, making significant changes and stopping load shedding.

Mr Minnaar explained that it was only when the information was leaked to the media, probably via the finance department in Eskom, that Minister Brown had engaged with the matter and demanded that the funds be repaid to Eskom, although he had written more than one letter to the Minister about the desire of the Board to arrange the pension pay-out for Mr Molefe.

The Pension Fund believed that Mr Minnaar had misled the Fund by using the code for permanent employees when registering Mr Molefe with the Fund. On whether he had mistakenly or deliberately appointed Mr Molefe on a permanent basis, despite the instruction to appoint him on a five-year contract, Mr Minnaar was adamant that all processes had been followed, according to the book, and that the appointment on a permanent basis ‘with a term’ was a legitimate contract, especially in the light of the fact that Mr Molefe’s salary was not increased to encompass a comprehensive package when changed to a five year term. He also noted that while he could make recommendations, he could not make decisions. That was a matter for the Board. Mr Minnaar said that the only contract signed by Mr Molefe was done so in February 2016 and it was not signed in October 2015.

Questions from Committee Members were wide and varied. When Mr Minnaar was asked if it is morally defensible to pay a person R30 million after 18 months of work, he replied yes. There was general questioning about Mr Minnaar’s understanding of fixed term contracts, and why he had not sought guidance on what to do when for the first time an executive was employed on a fixed term contract. Members required explanation of the retirement fund process and why Mr Molefe had worked at Eskom for over for five months before he signed his employment contract. Members were interested in who had made the decisions about the changes to Mr Molefe’s contract and retirement package. Questions were asked about the leak to the media about the R30 million pension and it was noted that there was clear evidence that Eskom had attempted to ‘massage the truth’ once the media exposed the story of Mr Molefe’s pension. Mr Minaar was asked if he viewed the departure as Mr Molefe’s retirement, resignation or unpaid leave. Members tried to understand the way in which Eskom had addressed the contract and retirement package but were fairly united in perceiving it as “finding the best possible deal for Mr Molefe and giving him a golden handshake”.

The appearance of Mr Anoj Singh, suspended Eskom CFO, before the Committee was very brief. The Chairperson informed him that the Committee had not prepared for him because his documents, totalling 400 pages, had been sent to the parliamentary office very late the previous night. The Chairperson informed him that he had had six months’ notice that he was to appear before the Committee, and he had asked for a postponement two weeks’ previously and that he could therefore return to Parliament at his own expense when the Committee was ready for him. They could not do justice to the work of the Committee without having read the document.

Committee Members were outraged and accused Mr Singh of showing contempt for Parliament with his delaying tactics, probably devised by his legal team that had attended every sitting of the Committee from Day One, but they were resolute and determined to carry on with the inquiry.

Mr Singh was not asked to speak.

Meeting report

The Chairperson announced that the Eskom Board and Mr Anoj Singh would appear before the Committee. She would not restrict Members on time. The work would be done diligently. She had once said that the Committee would work morning to night, ungodly hours. The Committee was there to work for Parliament and for South Africa as they were elected by the people. She hoped that the day would be fruitful.

The Chairperson noted that the Agenda stated the Committee would start by listening to the Board. There was a Mr Minnaar, who was part of Eskom, who had to be singled out and questioned alone before the Committee listened to the Board.

Chairperson: Adv Vanara, will you lead the evidence with Mr Minnaar?

Mr S Swart (ACDP): Chair, I am just a little concerned. As you noted, we are going to need a lot of time today and I note that we have only until two o’clock with the Board. We have another witness which might be important, but it might mean that we have to sit further into the afternoon with the Board, if necessary. Would that be your inclination as well?

The Chairperson: Yes, I am aware that we might take a long time with the first witness, so with the Board, we envisage to see the Board before lunch and after lunch and maybe towards the evening.

Mr N Singh (IFP): Will Adv Vanara take us into the circumstances of Mr Minnaar, who he is and why is he appearing before Eskom? Will we hear that from him or from yourself?

Chairperson: Adv Vanara will lead us. Usually when he starts introducing a witness to us, he gives that witness a chance to explain who he or she is and give us all of the background of where he worked and how he has got to where he is today, and his involvement in the matters that we will raise today.

Witness: Mr Anton Minnaar, Executive Support Manager, Eskom

The Chairperson read the oath to the witness.

Mr Minnaar took the oath and swore to tell the truth.

Adv Ntuthuzelo Vanara, Evidence Leader, Parliament: Mr Minnaar, I understand that you did not prepare a statement.

Mr Minnaar: That is correct.

Adv Vanara: You have a document that you wish to read from?

Mr Minnaar: Yes, I have a record of events.

Adv Vanara: Please feel free to make reference to the document during your testimony. As indicated in the invitation to appear before the Committee, yours is a very narrow issue that relates to Mr Molefe’s pension. Can you, for the record, state your full particulars?

Mr Minnaar: I am Anton Minnaar and I have been working at Eskom for nearly 28 years, and for the last 17 years I have kept the current position of Executive Support Manager, providing an administrative function to the Executive Committee, what we call F-pack and which I can go into detail later, and the Board.

Adv Vanara: Can you explain to the Committee the circumstances surrounding the pension arrangement that Eskom arranged for Mr Molefe?

Mr Minnaar: I can try and answer that for you, but would it help the Committee if I went through the sequence of events from the appointment?

Adv Vanara: Yes.

Mr Minnaar began to read from his document: Sequence of Events.

Chairperson: Mr Minnaar, Can you hold on a little bit? Members, you see how fast Mr Minnaar is reading. I am not sure if you are comfortable with that. Do you understand what he is saying? If you do not understand you will not be able to engage with what he is saying. This is important. Are you keeping up with him?

Mr Swart: It is a bit quick. I am trying to take notes, but I am not catching the dates, for example 27 September, 20 October and was the next date after that 11 November? May I suggest that we go a little bit slower as there are a lot of facts and we need to take notes so we can engage in this process going forward?

Dr Z Luyenge (ANC): He is too quick, so we are forced to run after him. He is dealing with matters that we are familiar with and he is taking of advantage of that. This is not new, but really, he is on the run. If he can go a bit slower so that we can connect the dots, because there are a lot of dots that he is bringing about.

Mr M Gungubele (ANC): If it is possible, I do not know how quick that could happen, because he is not the first and we are looking for consistency and collaboration. This is not the first time that we interface with it, but already as he speaks, we pick up some differences between what we have heard before and what he is saying. If we do not have that document, and at the speed that he has been moving, it is difficult to follow the comparisons. I am not sure how quick it is to get a copy. This is very serious. We do not want to have him for formality purposes, but like this it would be a mere formality.

Chairperson: I am not sure how big the document is that you have before you, Mr Minnaar. Can we will take a 10-minute break for printing and distribution of that document? Do we agree Members?

Members agreed.

Mr Minnaar: I must just mention that this was not a preparation for this Committee meeting. It is merely a sequence of events. When the process started with Mr Molefe, our office collated all the documentation because there are so many investigations that have happened, and this was just to provide a file with copies to make easy reference to it.

Chairperson: The documents will be fine for the Members. We will be able to follow the sequence of events and we will be able to respond to issues that need our attention.

Dr Luyenge: The sequence of events was most important. It is very important that we follow them. I want to make a clarion call. Chair, maybe you can assist us by ensuring that all presenters who are going to present, even if it is for ten minutes, could you make sure that we have the document so that we have prior…

Chairperson: There is a document for Members from the Eskom Board, but this was a last-minute arrangement for Mr Minnaar to give us the information.

Mr Gungubele: A general statement for all witnesses. Witnesses tend to give documents very late, but we are prepared to wait. But when the witness is ready, they want us to run on documentation that has not been properly read. I think we need to engage so that there is a balance that is fair between us and the witnesses. It is no use if you tell us you are not ready, and we stand back and wait for you to get ready and you want to ambush us when we are not ready to deal with your documentation. I am not talking about Mr Minnaar. It is a general rule that needs to be followed up very strictly.

Mr Swart: I understand that Mr Minnaar is ready to give evidence and it is a pity that we have not got his document. I was not aware that he would be called this morning, but I understand that he is part of the Board. But is it fair to the whole Board that they are now waiting whilst we are dealing with the witness? Maybe we should expedite it as quickly as possible because I was under the impression that we were going to start with the Board. I understand that we are hearing from a member for elucidation purposes, but we have taken the decision and I think we need to expedite it as quickly as possible.

Chairperson: Mr Swart, we were expecting the Board the week before last and we were prepared to wait for the Board. The Board should be prepared to wait for us. I think that is fair enough.

Dr Luyenge: I was on the issue of documents. It is not the first time that we make this plea that we get the documents earlier. Maybe we do not understand who the source of the documents is. Are these documents sourced from the presenters or from the Committee? If they are coming from the Committee, there is nothing that stops us from getting the documents earlier. But if they are sourced from them, is it possible for them to provide us with the documentation as early as they possibly can.

Chairperson: In my understanding, the documents are coming from the witnesses. The witnesses interact with their lawyers, so it is they who are giving us the documents late. Maybe it is lawful for them to do so, I don’t know. This is not the first time that we have asked them to give the documents on time. We have been doing this consistently.

[The meeting adjourned for a 20-minute break.]

Chairperson: The documents have been handed to Members. Members are asking that we start from the beginning.

Mr Swart: We have the document. It is not necessary to start again as we have the document.

Dr Luyenge: We have to understand the document so now we can read it while he goes through it.

Chairperson: We will start from the beginning

Mr Minnaar: This document is not a legal document. It is my view, and documents that I have collated about the events relating to Mr Molefe’s pension.

Chairperson: Mention the structure and the name.

Mr Minnaar read the document: Sequence of Events.

Mr Minnaar: That is about the record of events.

The Chairperson: Thank you very much, Mr Minnaar, we will now hand over to Adv Vanara.

Adv Vanara: Thank you Mr Minnaar. When you refer to the Chairperson of the Board, who was the Chairperson of the Board?

Mr Minnaar: The Chairperson was Dr Ben Ngubane at that time.

Adv Vanara: What is your understanding of a meeting that does not quorate? Can that meeting take any resolution?

Mr Minnaar: I am not in governance so if I attend meetings that are not quorate, I do my presentation and assume that through the governance processes they will discuss with the committee or the Board if decisions can be made. If you ask me personally, if the meeting is not quorate, that resolution cannot be passed.

Adv Vanara: Working on remuneration and benefits of senior executives and Board members, you must be working very closely with the Board, is that correct?

Mr Minnaar: We work actually very closely with people in the People and Governance board committee that handles remuneration and that information; it then gets obviously presented to the Board in their feedback sessions, which I am not involved in.

Adv Vanara: So, you work very closely with the people in the People and Governance committee, which is a subcommittee of the Board?

Mr Minnaar: I work very closely to them, especially in sessions relating to remuneration of executive and non-executive directors.

Adv Vanara: Your knowledge of the Pension Fund rules insofar as membership of the Pension Fund, what is your understanding?

Mr Minnaar: I am very clear about it. You can only be a member of the Pension Fund if you are a permanent employee in Eskom. If you are on contract, you cannot participate in membership of the Pension Fund.

Adv Vanara: I understand there must have been some confusion at the beginning of Mr Molefe’s appointment - whether he was to be permanent or on a five-year fixed term contract. When did it dawn on you that Mr Molefe had been employed on a fixed term contract?

Mr Minnaar: This is very difficult to answer. I mean, on 9 November, the Minister said it must be a term. That did not change our thinking at all because surely if he has negotiated as a contract employee, there had to be a total negotiation on his package. They would have to make provision for his retirement, medical aid post retirement, his death benefit, bonuses and all that other stuff. So, the only thing that we approved was his total guaranteed remuneration and that was shared with the Minister as well, and as we know, DPE (Department of Public Enterprises) employees are on contract and also participate in the pension benefits. So, it never crossed my mind at all that this person would be taken off as a permanent employee, because there are massive risks. I mean, we do not want to call back the past, but in 2001, South African Airways (SAA) paid the Chief Executive over R200 million. Now, there is a major risk on term contracts. We advised, the whole time, from our side, that contracts in organisations are not the best thing, because there are payments normally on delivery, or because these people have to provide for their own pension benefits. So, it never crossed our mind, or my mind, and I do not think that of any of the board members, otherwise they would have advised me differently, that Mr Molefe had to be taken off as a permanent employee and put on a contract. I do not know from a fiduciary duty that that would be indicated, but I am under correction.

Adv Vanara: You have given a very lengthy explanation. All I want to find out is when did it come to your attention? He was permanently employed, offered and signed. Then there was a letter from the Minister that said change this thing to a five-year contract. When did you become aware that the permanent contract was changed to a five-year contract?

Mr Minnaar: I wish I could say no or yes, but on 9 November, he was still permanent, and even up to today, I am very clear that he is a permanent employee with a term. He is not a contractor.

Adv Vanara: Your role is that of an advisor to the People and Governance committee. Is that correct?

Mr Minnaar: That is correct, Chair.

Adv Vanara: And that, irrespective of your strong views on the decisions that are made by the Minister, or by Cabinet, or by the Board, or the people in People and Governance, you are bound to implement those decisions. Is that correct?

Mr Minnaar: That is correct, Chair.

Adv Vanara: So, if Cabinet and the Minister instruct your board to put an employee on a five-year term contract, is it correct that yours is simply to assist the Board to implement that decision?

Mr Minnaar: That is correct, Chair.

Adv Vanara: Is it also correct that the final contract of Mr Molefe’s employment, the five-year fixed term contract, was some time in 2016, backdated to 1 October 2015?

Mr Minnaar: That is correct, Chair, because there was no contract in place during that period.

Adv Vanara: So, having worked for 17 years in that position, what did that mean to you?

Mr Minnaar: I am not totally too sure, Chair. A concern for me was that we signed a contract so long after the person had been employed. That is a concern, but, I mean, obviously we deal with the Department of Public Enterprises and there could be delays with these issues that we do not have control over.

Adv Vanara: Put your concerns aside. Remember, we are working on the basis that you are just an implementing agent. The decision-makers have decided, somewhere in February 2016, that they are employing Mr Molefe on a five-year fixed term contract backdated to 1 October 2015. For you, you had to implement that decision, is that not correct?

Mr Minnaar: That is correct, Chair.

Adv Vanara: In implementing the decision, what is it that you, in your mind, had to implement?

Mr Minnaar: That he stays permanently employed as it is and that we just have to fix a term. So, the contract that we appointed him on is a standard F-pack contract. It is stated clearly that he will participate in all the benefits, including pension and medical aid, and the only change to the contract was that there was a term to this.

Adv Vanara: So, is it your evidence before the Committee that, notwithstanding the efforts that were made by the Minister, by the Board, by People and Governance, to change from the earlier decision to employ Mr Molefe permanently to employ him on a five-year fixed term contract, that, in your mind, he was still a permanent employee?

Mr Minnaar: That is 100% correct, Chair. And I am still of that opinion.

Adv Vanara: What is your basis for it?

Mr Minnaar: It is straightforward, Chair. If a person is appointed on a five-year term and not a permanent employee, then he has to re-negotiate his whole package. The package that we got approved was his salary that was the same in Transnet. In Transnet he was also on a salary and on benefits. He paid into pension Fund in Transnet as well. So, if it is clear to say that this person is an independent contractor, he does not get any benefits. Obviously, he has to negotiate a better package for himself because the package that had been approved to him was merely the total guaranteed remuneration, his salary.

Adv Vanara: The discussions that the People and Governance committee had around the pension: what had sparked those discussions?

Mr Minnaar: Chairperson, as soon as we received the letter from the Minister that the person must be put on a term contract, the request from the people in the People and Governance committee was to say: “What is this individual losing by putting him on a term?” And I advised the Committee that the only thing that he was losing was his ability to retire because we were clear in our minds that he was still a permanent employee with the benefits. So, if you are not employed to age 63 or 65, the only risk that you have is that you lose your ability to retire. The only other thing was your post-retirement medical aid, but that was a function that we had already cancelled in 2003. So, the only risk for a person who had been employed as a permanent employee, and was being put on a term, was his ability to retire.

Adv Vanara: So, when Ms Klein, who was the Chairperson of the People and Governance committee, said that these discussions around the pension were prompted by the fact that Mr Molefe was now no longer a permanent employee, but a contract employee, would her understanding be different to that of yours?

Mr Minnaar: Chairperson, I just want to rephrase it. A ‘permanent employee with a term’ was our understanding and I think that our understanding was the same because when she asked, “What is there that he would forfeit?” and that was the information I provided for her - that he would not be able to retire.

Adv Vanara: In your understanding, what is meant by the rule of the Eskom Pension and Provident Fund that says that membership of the Pension Fund is limited to permanent employees. What is your understanding?

Mr Minnaar: Chairperson, this is my view. I think that would have to be decided in court at this stage because I am of a different opinion. I think everything was fine on the issue around Rule 28 and happened according to their rules, because they signed the documentation off. And it was interesting for me, referring back to this issue of a contractor, that Mr Molefe was not able to retire. It is a confusing thing for me and I am very interested in the outcome of that (court case). I, unfortunately, cannot answer that for you. In my view, he is appointed. We have previously had situations where we put people on contract for organisational matters and then put the person back as permanent again, and they all retired. So, I’m not too sure what this whole issue of the term was that the Pension Fund implemented, because in my view, he was definitely not appointed as an independent contractor.

Adv Vanara: The pension rules have not made reference to an independent contractor. Can we agree on that?

Mr Minnaar: Chair, I am not too sure on that. As I said before I am not an expert to provide information on those rules and definitions.

Adv Vanara: You worked for 17 years, using the rules of the Pension Fund, and in there, there is no reference to an independent contractor. So, where do you get the inference that a fixed term employee must be an independent contractor?

Mr Minnaar: This is my view, Chair.

Adv Vanara: The letter that you prepared, that you read to the People and Governance subcommittee on the 9 February 2016, to a meeting that did not quorate: firstly, why did you take that letter to the People and Governance committee?

Mr Minnaar: Chair, that was on the 21 November not the 9 February. I was requested by the chairperson of the People and Governance committee to bring it through and read it to the Committee.

Adv Vanara: For what?

Mr Minnaar: It was for approval because, in my view, the conclusion, at the end of the meeting, was that I must finalise it and we needed to get the chairperson’s signature for the letter.

Adv Vanara: I am sorry for referring to February. You are correct, it was the November meeting. Why, if you went to that meeting for that letter to be approved by the People and Governance subcommittee, when that committee did not quorate, did you get the sense that the letter was approved by the People and Governance subcommittee?

Mr Minnaar: Chairperson, just to inform you that I wasn’t part of the whole meeting. I was requested to come and present: I presented but I cannot even remember all of the members were there, so whether it was quorate or not, I could not tell you. But I was requested to present the letter at the committee and my understanding was that, should it not be quorate, it would go through a governance process to make sure that everybody agreed. The instruction that I had after the meeting, was that I must finalise the letter for signature, which I did.

Adv Vanara: You have testified that you went to a meeting to get an approval; you didn’t stay long in the meeting; you left the meeting without an approval from the meeting. Is that correct?

Mr Minnaar: A request to finalise, Chair.

Adv Vanara: I am sorry

Mr Minnaar: I received a request in the meeting to finalise the letter, and give it through to the chairperson.

Adv Vanara: The minutes of that meeting recorded differently: that, one, you were made aware that the meeting did not quorate; secondly, that a further meeting would have to be arranged for that matter to be considered. Where did you get the impression that you had been given the go-ahead?

Mr Minnaar: The chairperson, I think in the environment where we are, it is very important that I make sure that all t’s are crossed, and i’s are dotted, as I mentioned. We don’t do anything before I have approval on it. It’s a high-risk environment, and we know that. It is actually very difficult to refer back to meetings that happened some months ago and try and recall exactly what happened there. For that reason, I listened to the tapes of the meeting of the 21st and it concluded when the chairperson of the People and Governance committee said: “Suzanne, when is Dr Ben back, because we need to sign that letter?” She mentioned that he would be back the following day and then she said, “We have to decide ASAP after this to tie it up. We all comfortable?” That was how the portion closed. So, unless the minutes are not correctly minuted, I am not aware of it, but that was my instruction, otherwise I wouldn’t have done it.

Adv Vanara: Now, in a high-risk environment where you need to cover your back, clearly you needed that committee’s resolution. Did you have it?

Mr Minnaar: No, I didn’t have the resolution, Chair.

Adv Vanara: And, in absence of the resolution, how did you think you are covering your back?

Mr Minnaar: Chair, it was an instruction from the Committee, so it is not necessary that I sit and try and cover my back. I think it’s just a normal process. I came out of the meeting; I needed to action it; I have taken the letter, and I have actioned it.

Adv Vanara: You have created the impression that you deal with very sensitive matters in a highly-charged, risky situation. You need to be very sure of what you are doing and that was why you went to get the transcript. So, if you had to implement a decision of that committee, did you obtain the resolution from that committee?

Mr Minnaar: I don’t obtain the resolution where it is specifically stated because then it is stated in the minutes. Then you are correct, Chair.

Adv Vanara: You didn’t obtain the resolution, is that your testament?

Mr Minnaar: Chair, it is.

Adv Vanara: On what basis did you go to Dr Ngubane to tell him that you had the resolution from the People and Governance committee approving that letter?

Mr Minnaar: Just a correction, Chair, I did not tell him. I did not see him. I put the letter in an envelope, as I mentioned, and I dropped it off at his offices.

Adv Vanara: What was your expectation then of Dr Ngubane with that letter?

Mr Minnaar: I wouldn’t know, Chair. I assumed that he would discuss it with the chairperson of the People and Governance committee or the Board members before he signed it.

Adv Vanara: No, no, no. It is not the chairperson of the People and Governments Committee who took the letter to Dr Ngubane. It was you. Is that correct?

Mr Minnaar: That is correct, Chair.

Adv Vanara: Now, what I want to find out, when you took it to Dr Ngubane, what is it that you expected Dr Ngubane to do with that letter?

Mr Minnaar: I assumed that he would sign it, but, as I mentioned, I did not have any discussion with him on it. It was given through to his office.

Adv Vanara: Was it your expectation that Dr Ngubane would sign this letter without any background information, whether or not the People and Governance committee had approved this letter?

Mr Minnaar: I don’t know, Chair.

Adv Vanara: What is it that you don’t know?

Mr Minnaar: If Dr Ngubane would consider it.

Adv Vanara: Maybe you don’t understand the question. You take a letter that you had prepared, gone through the trouble of presenting this letter to the inquorate meeting, which you knew was inquorate, and you leave it in Dr Ngubane’s office. The question is: what was your expectation of Dr Ngubane to do with that letter?

Mr Minnaar: Just a correction again, Chair. At the time that I presented to the committee, I did not know that the committee was not quorate. I didn’t know. I came into the meeting when, I think, they were discussing the Dentons Report. I did a presentation; I left with an instruction; I have given that letter through to the board hairperson. I assumed, it would, 10 to 1, be signed. I had that expectation.

Adv Vanara: When you left the letter in Dr Ngubane’s office, the letter was addressed to the Pension Fund, is that not correct?

Mr Minnaar: No, the letter was addressed to Mr Molefe.

Adv Vanara: The letter that Dr Ngubane addressed to the Pension Fund, where Dr Ngubane says to the Pension Fund: “The Board has taken a decision to accept Mr Molefe’s early retirement”. Who prepared that letter?

Mr Minnaar: I prepared the letter, but the letter was not for the Pension Fund, but it was given to Mr Molefe that we accept his early retirement. That letter I received a copy of, and then I actioned it.

Adv Vanara: So, there was no communication from Eskom to the Eskom Pension Fund telling the Fund that Eskom had approved Mr Molefe’s early retirement?

Mr Minnaar: Chair, there is no formal letter that goes through to the Pension Fund. After the letter has been received by the person that goes on retirement, we action it on the SAP system. So then, it is merely a transaction between Eskom and the Pension Fund.

Adv Vanara: So, Mr Sbu Luthuli would be wrong in saying that the Eskom Pension Fund received communication from Eskom, from Dr Ngubane, saying that Eskom had approved the early retirement of Mr Molefe?

Mr Minnaar: Chair, I don’t think it was a specific letter. It’s a systems process that we do. So, they do receive an instruction for retirement from our side as per the rules that have been approved from their side. But we don’t do a physical letter that has been signed. The letter that had been signed – we can give them maybe a copy of the letter – would be given to Mr Molefe, but they don’t get a specific letter from us, especially where the chairman signs. It’s a function at our offices dealt with by the front end.

Adv Vanara: The file code: why was Mr Molefe reflected, in the correspondence between Eskom and the Pension Fund, as a permanent employee?

Mr Minnaar: We appointed him as a permanent employee, Chair.

Adv Vanara: Who appointed him?

Mr Minnaar: I did Chair; my division did.

Adv Vanara: Was that contrary to the Minister’s instruction, Cabinet, and the Board?

Mr Minnaar: Chairperson, no, because the Board knows well that it was said that he would participate in all the benefits and that’s what I tried to mention to you. This whole debate is whether he is a permanent employee or on a contract and that is a concerning issue that we raised from the beginning by bringing in term contracts. I think I have tried to make it clear to the Committee that the understanding, continuously, is that he is a permanent employee with a term and his contract stated that as well – I think you have a copy, otherwise I can provide it – the term of it, but stated that he will participate in medical aid, Pension Fund, death cover, group life cover, and the bonus structures. And that was signed by the board chairperson, Dr Ngubane. And I assume that it was shared with the Minister as well, because she wanted to have a view of the contract.

Adv Vanara: You are not being accurate when you say, “with pension benefits” because there is a qualification in that contract. That qualification says, “subject to the rules of the Pension Fund”.

Mr Minnaar: Chair, that wasn’t intended, if I am correct, because there was an understanding that he was a permanent employee.

Adv Vanara: No, no, no. You are not answering the question. I am not asking you; I am telling you what is in the contract. The contract says: “you would be a member of the Pension Fund, subject to the rules of the Pension Fund”.

Mr Minnaar: That is correct, Chair.

Adv Vanara: Now, if the rules of the Pension Fund do not admit him as a member of the Pension Fund, how can he be a member of the Pension Fund?

Mr Minnaar: As I said previously, Chair, that is an issue for debate. And I think that needs to be determined by a court because, in my view, he is a permanent employee, otherwise there was no way he could benefit and, I tried to state it earlier, we would have had to negotiate a whole new package for him. And that was never done.

Adv Vanara: Eskom Pension Fund is very clear and Mr Molefe, himself, is very clear that he was a permanent employee. However, you seem to be the only individual at Eskom who thinks that Mr Molefe was a permanent employee. Having worked on the same rules for 17 years, where’s that risk imagination of yours coming from?

Mr Minnaar: Chair, firstly, it’s not imagination. You mentioned now that Mr Molefe considers himself a permanent employee. That is what I agree on. He is a permanent employee, otherwise he would not be able to get any of the benefits.

Adv Vanara: I am sorry, he didn’t regard himself as a permanent employee. He regarded himself as a fixed term employee, which disqualified him as a member of the Pension Fund. So where do you get this thing?

Mr Minnaar: I don’t know if it’s a thing from where you are getting it. It is clear in my view, and from the board members that were dealing with it, that we appointed him as a permanent employee. We have never been advised differently.

Adv Vanara: What is the status of Mr Singh? The Pension Fund had written to you, asking you to explain the status of Mr Singh.

Mr Minnaar: Exactly the same as I mentioned earlier regarding Mr Molefe. He is a permanent employee with a term. And we have provided that information to the Pension Fund.

Adv Vanara: So, this view of yours still persists, notwithstanding what is now common knowledge of what is meant by the fixed term contract of employment?

Mr Minnaar: Chair, respectfully, the common knowledge, has it been legally determined?

Adv Vanara: You are the first one from Eskom to maintain that somebody who is on a fixed term contract, is regarded as a permanent employee. Your Board, Ms Klein, testified that actually the basis of all the manoeuvres to buy Mr Molefe’s additional pension, was precisely because he was not a permanent employee, and you were advising them. And yet, today, you come and say that you always regarded him as a permanent employee.

Mr Minnaar: Chair, I don’t get the question. I agree, I did advise them, and I am still of the opinion.

Adv Vanara: What I want to find out is what the basis of this opinion is? You say that you don’t know the rules. Clearly, if the Pension Fund tells you this is what the rule means, you must accept that.

Mr Minnaar: Chair, I don’t accept it until we get proof of the understanding of that interpretation. The basis for my rationale around the permanent employee, comes back again to the negotiation of the package. If it was clearly seen, that he wouldn’t participate in any of the benefits which had been signed off by his contract and subsequently signed off by his reappointment contract, he would have had to renegotiate his package, but that never happened. So, from that point of view, I am very clear in my mind that he has been seen as an employee with benefits, and the only way for him to participate in the benefits, is for him to be appointed as a permanent employee.

Adv Vanara: Eskom conducted an investigation on the leaks around this pension pay-out. Was this investigation conducted into the circumstances leading up to the pension pay-out?

Mr Minnaar: We have had an audit review, Chair. Further than that, I am not too sure, but our documentation is available for them at any time. I think what is also important is that our section gets a full audit review annually, obviously because we declare the remunerations and we have had, up to this year, a clean audit on our side. The documentation is there for the audit and the review.

Adv Vanara: When Eskom writes to the Pension Fund wanting the money that has been paid into the Pension Fund to be paid back to Eskom, did you have any role in that?

Mr Minnaar: I did not, Chair.

Adv Vanara: Why not?

Mr Minnaar: That was dealt with by board members. I am not exactly too sure who. I assume, maybe the Chairperson, but maybe it’s not. All that I was requested, at that meeting that I mentioned with the client liaison officer, whether it could happen, and they gave us an indication that it is possible. After that I wasn’t involved in any of the further negotiations regarding Mr Molefe’s return.

Adv Vanara: Your understanding of Eskom’s claim to the Pension Fund for the money to be returned, what was the basis for it?

Mr Minnaar: That was after a discussion with the Minister.

Adv Vanara: And what were the discussions?

Mr Minnaar: Chair, I can’t recall exactly but it was just that the Minister stated that she was not comfortable with the pension arrangements and that the committee, I think Mr Steyn was involved in that, was looking at alternative arrangements for Mr Molefe.

Adv Vanara: Is it possible that the Minster did not believe Mr Molefe was entitled to the pension?

Mr Minnaar: I cannot answer that, Chair.

Adv Vanara: But if I put it to you, then you can’t dispute that.

Mr Minnaar: I am not too sure. I haven’t got evidence, Chair.

Adv Vanara: Mr Molefe was in the employment of Eskom for less than 16 months or 18 months, is that correct?

Mr Minnaar: That is correct. 18 months, Chair.

Adv Vanara: But you had requested the Pension Fund to calculate the amount of pension that would be due to him twice. Is that correct?

Mr Minnaar: Chair, no, I think more than twice. I continually requested them. That was a request from the chairperson of the People and Governance committee that we provide information to do estimates as to what it would cost Eskom, and also the thinking around it. So, there were a few mails that went through between me and the client liaison officer to do estimates for us. It was even over the December period, as well. The understanding was that things needed to be discussed with the Minister.

Adv Vanara: There is general acceptance that the Rule 28 upon which Mr Molefe’s added time was based, was not applicable in the current circumstances that he was granted pension. What is your view on that?

Mr Minnaar: Chair, as I mentioned earlier, I don’t know totally all the rules, which is why I will always get advice and agreement from the Pension Fund that it can be done. It is very clear that Rule 28 says 50 years and 10 years’ service. I was then requested to find out the situation if a person didn’t have 10 years’ service, but that service could be bought, and I requested the Pension Fund to provide me information on that and they said, “Yes, it can be done”. On that basis, the presentation was then made to the People and Governance committee for their consideration. So, at that stage, I agree with you, the Fund said that it can be done, and they approved it in a letter from the Pension Fund, that it can be done.

Adv Vanara: Not withstanding that it is common cause agreed that he could not retire on that rule that he was retired on, you are still insistent that he was correctly retired?

Mr Minnaar: Chairperson, correct, because the Fund said he can.

Adv Vanara: So, you don’t read the rules, you just phone and you’re told, and you come back and relay that to your board members? Is that your job?

Mr Minnaar: Chair, I don’t see it necessarily as part of my job, but I can say one thing, if I am not an expert in a certain area, I won’t go with my own gut feel. So, it is important that I deal with the people that have helped us for the last 17 years to provide information so that we can act. If Eskom can say, retire and we buy 10 years, the Fund can reject it and say, “No, we’re not processing because it is outside the rules”. They are also running a risk as well. I think that they are under the Financial Services Board. We cannot act or instruct anything from our side to the Fund, unless the Fund agrees on it and that’s the reason why I engage with the Fund. They said, “It can be done within Rule 28”. They also confirmed that in a letter that it can be done, early retirement at 50 and additional years’ service, pre-the 10 years being bought. So, I don’t want to allow myself to interpret Fund rules and advise the Board. It comes from the Fund directly.

Adv Vanara: In that same vein and spirit, you can’t therefore challenge the Fund’s interpretation when they say: “A non-permanent employee will be an employee who is on a fixed term contract”.

Mr Minnaar: Chair, I have my view and I think it needs to be confirmed. I think it is my right to challenge it because it is a new interpretation on it and, obviously important, on the path going forward, should we ever go into contracts again, which I hope we don’t. It will be interesting to see what the outcome is going to be on this whole thing. This is my view.

Adv Vanara: The letter that went to the Minister from Dr Ngubane for the early retirement, and the Minister did not respond. That letter you claimed was seeking approval of the Minister to the pension, and the Minister did not respond. On what basis then, or on what resolution, was this pension being pursued?

Mr Minnaar: Chairperson, I do not know if the letter was an instruction, or information about it, and I assume discussion was happening between board members and the Ministry. After the third time that we provided information and a request to the Minister around the issues, it was then required that the pension resolution be presented at the People and Governance committee, which I have done, and the resolution has been accepted at that People and Governance committee. I’m not totally too sure what the involvement was as I don’t deal directly with the Ministry around these issues.

Adv Vanara: If you had been the one advising the Board on this issue, the pension, and the Pension Fund says Eskom misled it, on the status of employment of Mr Molefe, is it correct to then impute you, as the person who was advising the Board, as somebody who would have misled the Pension Fund?

Mr Minnaar: Chair, I disagree that we misled the Pension Fund. As these issues are coming out, we have to look at the contracts at Eskom, and if there is any participation, it is something that must become open and we must investigate further, but there was no intent of misleading the Fund with about the contract or permanent employment. We were of the view that the appointment be treated as a permanent employee with a term.

Adv Vanara: The Pension Fund testified that there are two codes and these codes are different for permanent and contract employees. Is that your understanding as well?

Mr Minnaar: I agree with that, Chair.

Adv Vanara: And that at some point, whilst there might have been some misunderstanding from Eskom about what it exactly means about a fixed term employee status, this issue was resolved, and you were part and parcel of those discussions. Is that correct?

Mr Minnaar: Chairperson, I assume the resolution was on the permanent employee. We never discussed anything else, except permanent employee, except with the term, and I was part of the discussions and was never informed differently that he was seen as a total separate employee on a contract and not to be treated as a permanent employee.

Adv Vanara: No, no, that is not what I am asking. The Pension Fund said that before Mr Molefe joined Eskom, in the file, Eskom would identify permanent employees using a code and because this had created a problem for the Pension Fund when they did reconciliation of the contributions received from Eskom. They engaged Eskom to clarify the situation and there, whatever confusion that would have existed about what it means to be a full-time employee, what it means to be on a fixed term contract employee, that issue was laid to rest there, and you were part of it.

Mr Minnaar: I’m not totally too sure that I was part of those discussions. I appointed Mr Molefe on 1 October as a permanent employee on the system. That was never referred to debate around it.

Adv Vanara: Don’t deliberately try to run away from this question. You and the Eskom Pension Fund, the Eskom Pension Fund is on record testifying that it is an issue of what full-time employee means in terms of their rules, did not arise because of the employment of Mr Molefe. It is an issue that arose long before. Do you accept that?

Mr Minnaar: No, I disagree.

Adv Vanara: And you are part and parcel of those discussions to clarify this point of confusion.

Mr Minnaar: No, never been.

Adv Vanara: And yet for 17 years you have been on the job, and in this period this issue is clarified, and you were not part and parcel of those discussions?

Mr Minnaar: Yes, I have never been involved in that. Nobody invited me to that meeting, Chair.

Adv Vanara: But Eskom said you were part and parcel of the meeting.

Mr Minnaar: I don’t know what meeting, Chair. Maybe you can refresh my mind around it, but I wasn’t in the meeting where we clarified those issues. There were discussions around what a permanent employee is and contract employee is. And that I’m clear about. But Mr Molefe wasn’t further discussed and, the issue was raised, and, obviously, you have got my view around it.

Adv Vanara: Your view aside, and Mr Molefe’s point aside, I am referring to that meeting. The exact one that you said you were in where the issue of  permanent employee and the contract employee was resolved. That’s where I am. The one that you are recalling.

Mr Minnaar: I don’t think there was any resolution there, Chair. That was a discussion at the Protea Hotel, am I right, where he talked about his retirement. I am sorry that I’m missing you. No intent, I am trying to answer you to the best of my ability.

Adv Vanara: You are trying to deliberately run away.

Mr Minnaar: Chair, I don’t run away from anything. I am here to provide my facts to you and I have tried my best to help this Committee inquiry.

Adv Vanara: Now, for the umpteenth time, leave Mr Molefe’s issue aside. Do you understand that?

Mr Minnaar: Yes, I do.

Adv Vanara: Let’s come back to that meeting you identified as being at this hotel that you were in. That is where I am. Do you understand that?

Mr Minnaar: I understand that, Chair.

Adv Vanara: Now that is the meeting where what a permanent employee and what a fixed term contract employee are, gets to be resolved. You say you were at that meeting but you say that there was no resolution taken.

Mr Minnaar: Yes, I was in that meeting. It was an informal meeting. There was no resolution. That is the meeting where Mr Adil Patel was in the meeting and he tried to provide advice around Rule 28. So, the focus of that meeting was to discuss Mr Molefe’s return and no conclusions or resolutions about contract full-time or contract employment.

Adv Vanara: Maybe this meeting at the hotel that you talk about was a different meeting. Do you recall a meeting where the Pension Fund raised pension related issues with you and the people that you work with in Eskom?

Mr Minnaar: Not that I am not aware of, Chair.

Adv Vanara: Do you recall a meeting where the Pension Fund raised with you and those that work with pension related matters about the difficulty that Eskom presents to the Fund in reconciling monthly contributions?

Mr Minnaar: We have not had any formal meeting with the Pension Fund after Mr Molefe around these things. What we have was a request from the Pension Fund to look at contracts to provide information, and that we have done.

Adv Vanara: I thought that we understood each other. We are not talking about Mr Molefe. We are talking generally of a relationship between Eskom as a contributing employer and the Pension Fund. Can you forget about Mr Molefe? You are a contributing employer to the Pension Fund of Eskom, is that not so?

Mr Minnaar: That’s true, Chair.

Adv Vanara: Before Mr Molefe came for his 18-month stint, you already had a working relationship between the Pension Fund and the contributing employer.

Mr Minnaar: That is true, Chair.

Adv Vanara: Do you recall a meeting between the Pension Fund and yourself as well as your colleagues where the Pension Fund says: “You need to assist us here with our reconciliation of monthly contributions because you send us a list with employees and contributions for some, and for others there is no contribution. And when you explained that the reason that there was no contribution for some, is because some of the people on that list, are not full-time employees of Eskom, and therefore they are not members of the Eskom Pension Fund. Do you recall that?

Mr Minnaar: To my best recollection, we had no formal meeting. And just to confirm to this inquiry, regarding all our F-pack permanent employees, we have no people on contract for whom we don’t send contributions through. However, we had a request from the Pension Fund to provide a list of all employment contracts, which we have done. But it was not a formal meeting.

Adv Vanara: So the Eskom Pension Fund must be lying when they say there was such a meeting and this confusion that existed then, was laid to rest.

Mr Minnaar: I cannot answer that, Chair.

Adv Vanara: If you are insisting there was no such meeting and they are saying that there was a meeting and this issue was resolved, then between yourself and the Pension Fund, somebody is lying to the Committee.

Mr Minnaar: I cannot judge what they say. All I can tell this Committee is that there was no formal meeting between us and the Pension Fund regarding contract issues. There was a request, however, that we can provide them with all the contracts of F-packs, which we did.

Adv Vanara: When the Minister communicated to the Fund that Mr Molefe was not to be a full-time employee, he was to be given a five-year fixed term contracts, what is your understanding of that?

Mr Minnaar: I wasn’t aware that the Minister communicated to the Fund, Chair.

Adv Vanara: Sorry, communicated to Eskom.

Mr Minnaar: Our understanding was that he was a permanent employee and we put him on a 5-year term.

Adv Vanara: No further questions, Chair.

The Chairperson: Thank you very much, Adv Vanara.

Mr M Gungubele (ANC): Am I correct, it is Mr Minnaar?

Mr Minnaar: Yes, Chair, I am Anton Minnaar.

Mr Gugunbele: Meneer Minnaar. Let’s start with your work as you describe it in the document here. You are saying that you provide the exclusive function of executive support. The keywords are ‘exclusive’ and ‘executive’. What does that entail?

Mr Minnaar: Chairperson, it just refers that we have an administrator function that deals with all the administration for the executive, which I have mentioned, F-band employees, roughly about 24, and the Board, and that includes remuneration benefits and recruitment processes, and everything.

Mr Gugunbele: Does that involve legal support?

Mr Minnaar: No. We do provide legal support.

Mr Gugunbele: So, what does your administrative support entail?

Mr Minnaar: Chair, it includes board remuneration and benefits, executive remuneration and benefits, F-band, and executive F-band contract management, short-term incentive scheme, management of long-term incentive schemes, the executive recruitment, placement and movements of the F-bands only, exit and separation arrangements for F-bands. We have a small executive health centre and we assist with ad hoc support, and that includes the whole board, chairman of the board, the executive committee and additional F-bands in the group executives, divisional executives and senior managers.

Mr Gungubele: Do you only come to the board when you are invited specially?

Mr Minnaar: Chair, yes, I participate in any committee sessions, if needed, for the People and Governance committee and only on invitation from the board.

Mr Gugunbele: Do you give advice on employment contracts?

Mr Minnaar: We have a standard employment contract that was drafted by the legal firm and that is the basis that we are using, Chair.

Mr Gungubele: Do you advise the executive on those?

Mr Minnaar: We do not advise necessarily. We use the base of the employment contract, I guess then to advise on it, Chair.

Mr Gungubele: You also provide advice?

Mr Minnaar: Not on the contracts. On the basis of the standard contract, I can provide advice. It’s not advice actually, I can merely share the standard F-bank contract with them, Chair.

Mr Gungubele: So, you referred the executive to the standard contract?

Mr Minnaar: We’ve got a standard contract, Chair. That’s correct.

Mr Gungubele: Are you expected to understand the standard contract?

Mr Minnaar: I think I’ve got a fair understanding of that contract, Chair.

Mr Gungubele: Sorry for repeating one or two of the questions. When you’re in a meeting, are you the head of executive support? What is your position?

Mr Minnaar: Yes, I am head of the executive support function, Chair. Correct.

Mr Gungubele: So, when you go to the Board, am I correct in saying, if you are called to present in a manner that affects a particular decision, you are supposed to go back to your unit, knowing what the position of the Board is?

Mr Minnaar: Chair, if I understand correctly, I present to the Board for consideration and once there’s a conclusion or instruction, I then action that through our department. That’s correct.

Mr Gungubele: Now, there is this decision of the contract of the CEO. If I am correct, you left the meeting before you knew the decision. Am I right? The meeting as chaired by Klein.

Mr Minnaar: Chair, are you referring to the meeting of 21 November, the last one?

Mr Gungubele: The meeting that you gave a presentation, was it about the contract or remuneration?

Mr Minnaar: No, it was a contract issue that we discussed. I attended the whole meeting and then the contract was given through to the chairperson for consideration.

Mr Gungubele: Am I correct that you were given the final position of the meeting when you left the meeting?

Mr Minnaar: Chair, I left the meeting on 21st, if we are referring to that one. That’s correct.

Mr Gungubele: You were advised that the issue was finalised?

Mr Minnaar: My understanding was that I must finalise the letter, which I have done, Chair.

Mr Gungubele: So, you were advised that it was finalised, the whole issue of the CEO by the board meeting?

Mr Minnaar: I don’t know if the whole issue was finalised, but the letter was finalised. I have the impression that the letter was finalised.

Mr Gungubele: About what?

Mr Minnaar: About Mr Molefe’s early retirement, Chair.

Mr Gungubele: At the meeting where you were sitting?

Mr Minnaar: At the meeting where I was called, Chair.

Mr Gungubele: Was there a written note?

Mr Minnaar: No, it was verbally communicated to me, and, obviously, it was supposed to be reflected in the minutes of the meeting.

Mr Gungubele: Who communicated it?

Mr Minnaar: At the meeting, the chairperson of the People and Governance committee.

Mr Gungubele: Thanks. Now, there are one or two connections that I want you to clarify for me. For instance, you are saying on 9 November, the chairperson informed you that the Minister had instructed the Board that the contract must be on five years. That’s 9 November 2015. Am I correct?

Mr Minnaar: That is correct, Chair.

Mr Gungubele: This was discussed with the Company Secretary on 9 November and the letter based on fixed term was given to the Company Secretary. Is that correct?

Mr Minnaar: That is correct, Chair.

Mr Gungubele: Now, let’s go to 11 November. When Mr Molefe signed an appointment letter, the letter did not state the term. Is there no contradiction there?

Mr Minnaar: No, there is no contradiction. The letter of appointment stated that he will be expected to enter into a term, but a physical term was not stipulated in that letter of appointment.

Mr Gungubele: If, on 9 November, the Minister had advised that it be a five-year term and discussed that with the Company Secretary, or whoever drafted a letter of appointment, is there no contradiction between what happened on the 11th and what happened on the 9th?

Mr Minnaar: Chair, I am not totally too sure if there was still a discussion to find out about the whole term, whether we had to do it or not.

Mr Gungubele: But you don’t see any contradiction?

Mr Minnaar: No, I think it was stipulated in the letter that he would be requested to agree to a term. But finalising the term, I think was a contract. Or he was already made aware that he would be requested to enter into a term.

Mr Gungubele: Where was that put, in which letter? The letter stated a term

Mr Minnaar: In his letter of appointment, Chair.

Mr Gungubele: Are you referring to the same letter of November?

Mr Minnaar: November, Chair.

Mr Gungubele: But this letter says that the letter did not state the specific term?

Mr Minnaar: Yes, it merely stated that there will be a term, but an actual term wasn’t stated.

Mr Gungubele: Did I hear you saying that by 9 February 2016, there was no contract in place?

Mr Minnaar: That is correct, Chair.

Mr Gungubele: If you go to Brian’s submission here. Maybe you can clarify that? Brian says: “In October, I received and signed the executive employment contract from Eskom which specified the commencement of the mandate as 1st October”. The contract specified the employment – this is October 2015.

Mr Minnaar: I assume that it was the open-ended contract. It was discussed with him. I never received a copy of that signed contract.

Mr Gungubele: But, if you say by 9 February there was no contract in place yet, where do you get that?

Mr Minnaar: Chairperson, I think in the beginning when Mr Molefe was appointed, the total permanent employment contract was discussed with him and, I think, it was shared with him as well. Subsequent to this, the Minister then mentioned the five-year term that she wanted implemented into the contract. So, we agreed…

Mr Gungubele: No, Mr Minnaar, this is the last question. I am requesting you not to do unnecessary elaboration. You say that on 9 November, there was no contract in place. Mr Molefe says, in October, he received and signed a contract. I am not interested in whether it’s a five-year term. He received and signed a contract. Can you explain that contradiction?

Mr Minnaar: I don’t have a copy of that contract, Chair.

Mr Gungubele: So, who could be staying away from the truth? It is either you or Molefe.

Mr Minnaar: That is true, Chair, but I don’t have a copy on record.

Mr Gungubele: Who is staying away from the truth, is it you or Molefe? You are saying two different things, concretely differently. Which truth are we supposed to take? Remember, you are the exclusive executive support function, and you are saying, in your capacity in execution of that, around February, there was no contract. Molefe says, “I signed it in October 2015”. So, the two are not necessarily the same. All I want to know from you, is what happened between the two? You are executive support.

Mr Minnaar: Chairperson, the judgement is for this Committee. I can’t judge. All I want to let you know is that I do...

Mr Gungubele: No, no. Remember that you have a senior responsibility. You must tell us what to believe because you have a responsibility, you are paid to do it. You say 9 February, no contract. Molefe says October. In the execution of your job where you should live with the consequences of what you say, what position must we take between the two?

Mr Minnaar: The only evidence that I have got, is the contract that was signed, and I have it on record. I do not have any other record.

Mr Gungubele: No, no, Mr Minnaar. I am saying that there are two positions. To close this, I want to know, between these two positions, yours and Molefe, which one must we take? You have a duty and you are paid for it, executive function, actually, fiduciary and more responsibly, the principles of good faith in terms of Section 2 of the Labour Relations Act, you are here in that capacity.  You said by February, there was no contract. Molefe says, “I signed a contract”. I want you to tell the Committee, according to you in the execution of your work, when did Molefe have a contract?

Mr Minnaar: Let me get the dates and this is my contract that I am standing with.

Mr Gungubele: Where is that?

Mr Minnaar: Just give me some time so I can go through this again please. I just have to find the date when the contract was signed.

Mr Gungubele: You confidently said, when I asked you repeatedly, that there was no contract around 9 February 2016. And I asked you more than twice. You said there was no contract and I kept on repeating to you that you differ concretely with Molefe in material terms. I am not sure what you’re looking for.

Mr Minnaar: As I mentioned, on 7 March the contract was drafted, awaiting feedback. It was only signed in March 2016. That is the only contract that I have got on file and that is the only contract signed by Molefe and by the chairperson of the Board.

Mr Gungubele: So, you don’t know the October.

Mr Minnaar: I do not, Chair.

Mr Gungubele: So, you don’t know?

Mr Minnaar: I do not. That is the only contract that I have on record. I don’t.

Mr Gungubele: Thanks, Chair.

Ms N Mazzone: (DA): Mr Minnaar, on 21 November 2016, you stated that after the committee had discussed the early retirement, “I was requested by the chairperson of the P&G committee to finalise the letter and give it to the board chairperson”. When you gave this advice, did you also advise Eskom about the cost to Eskom of buy-ins and buy-backs of time?

Mr Minnaar: Chair, that is correct. It was mentioned to the People and Governance committee what the amount was. The amount that we received at that stage was the figure of R25 million. That was not the final amount because some changes came as, I think, the Committee knows, and R31 million came out. I was not too sure where it had come from. But the P&G committee was aware of R25 million. I had shared it directly with the chairperson of the People and Governance committee.

Ms Mazzone: OK. So, R31 million turns out as a rough amount and you yourself are not too sure where this money comes from. Did you not have an ethical duty to inform the Eskom Board that this could be problematic?

Mr Minnaar: Chairperson, the calculation was an estimate. We get an estimate from the Fund and the estimate from the Fund was R25 million. That was the last number that I knew of. So, on Mr Molefe’s retirement, that calculation changed because he got married in the meantime. I wasn’t aware of it and I could also, unfortunately, not advise the Board on the change in the number.

Ms Mazzone: You know that Eskom is in a precarious financial situation, and so, an amount of R25 million, that then goes up to R31 million, obviously has a massive effect on the company and its finances. At any stage, was this enormous amount of money discussed, and perhaps the reputational damage it could do to Eskom, and why such allowances were being made for an individual by a company that was in a very bad financial situation.

Mr Minnaar: Chair, the R25 million was discussed at a committee meeting, it was shared with the committee. As I mentioned, the R30 million was unfortunately after the fact. We only found out once it was in the newspapers because we don’t follow up on the numbers again after it has been submitted to the Fund.

Ms Mazzone: Mr Minnaar, it sounds to me like we have a problem here because a lot of things were not followed up, and there is certainly a lot of information that you weren’t privy to. I say this, because on your timeline on 20 April, you say: “I was requested after the meeting with the Minister to determine if the money paid to the Eskom Pension and Provident Fund (EPPF) could be paid back to Eskom. Should this be possible, the intent was to start negotiations with Mr Molefe on possible scenarios, i.e. he returned to Eskom, resign, or take the issue to court”. Why would the Minister have such a bipolar legal opinion and a bipolar approach to this pay-out than what you and the Eskom Board had?

Mr Minnaar: Chair, I am really sorry, but I can’t answer that. I can mention that it was my opinion as well. The Minister was, I know, uncomfortable about paying out the R30 million. So, the only outcome was the three that I mentioned: come back, pay back the money, or it has to be a court issue. I wasn’t involved in further discussions around Mr Molefe so, unfortunately, I cannot answer that directly.

Ms Mazzone: I am concerned about the last couple of paragraphs of your information to us. You say, “On the Minister’s decision not to agree to the retirement issue, Eskom found itself in a difficult position. (I agree with you.) The option was to ask Mr Molefe to return to Eskom. In doing this, Eskom had to show that the retirement issue was a mistake or wrongly interpreted”. Now, as a layman, and certainly not someone who works at Eskom, that line “Eskom had to show that the retirement issue was a mistake or wrongly interpreted,” that means to me that Eskom had to massage the truth. Can I have your opinion on that?

Mr Minnaar: Chair, I think as I mentioned earlier, remember these are my views and my thinking about it, as well. If you ask me, honestly as I sit here, “Is Mr Molefe retired?” I said that we followed the processes. He did retire. It was a decision made. The resolution was made. The Pension Fund said he can. My understanding of permanent employment is, so, if you really ask me, honestly and without anything, “Is Mr Molefe retired?”, I said, “Yes”. Now, I think the other issue is, as soon as something comes out, a company obviously has to say how it is going to deal with this going forward and merely, as my views state there, there have to discussions about how they can process this going forward. So, I open myself obviously by stating my personal views over there, but I hope that I honestly can provide the answers for you and that it is satisfactory. It’s not an Eskom view necessarily, but it would be my view.

Ms Mazzone: You say, in the next paragraph, “I have dealt with this option before in four cases and it was very clear on the conditions, i.e. age 50 and 10 years’ service”. Can you tell us a little bit about what other four cases you have dealt with?

Mr Minnaar: Chair, we have had in Eskom previously, separation from individuals. I think all companies have to have processes in place for if you separate or let go people at some stage. The thing where we have done it, is with people who sit with maybe 20 years’ service and the Board considered those for retirement. They may either approve additional years’ service or they may waiver the penalties. And then there were also cases where the individuals requested those benefits, but it wasn’t granted. But the provision resides with the Pension Fund that we can do it if we want to do it. And the cases that we dealt with were people that had in excess of 10 years’ service, or 20 years’, or whatever the case may be.

Ms Mazzone: OK. So, certainly not in a case like Mr Molefe’s case where he had way below that criteria?

Mr Minnaar: No.

Ms Mazzone: OK. So, we are all in agreement that he did not meet that criteria. Then on 27 June, this strikes me as important: “I was also asked to look at Mr Molefe’s contract and how we could possibly improve it”. It seems to be an overly kind gesture on your behalf Mr Minnaar, and, quite frankly, on behalf of Eskom. Certainly, I wish my employer would look at ways to improve my contract because an out of the way formulation was done to improve the contract of the CFO who, I assume, was Mr Anoj Singh, and certainly an out of the way formulation went to Mr Molefe. Can you explain why the Eskom Board was so adamant to improve these two gentlemen’s contracts?

Mr Minnaar: Chair, I think, and this is my view, that it is very, very important that we were faced with a term contract for the first time in executive employment in Eskom. I think, as the Committee knows, it is not the best practice. We open ourselves to major things if we used fixed term contracts. So, for what it’s worth, I also stand for it. You manage performance through a short-term incentive scheme. I’m going to come to your answer now, if you allow me. So, you don’t need a five-year contract to get someone out of an organisation. If a person doesn’t perform on a 12-month basis, you can get a process in place to get them out of the organisation. So, it was a huge thing imposed on us, bringing a five-year term contract in place. Hence, I use the interpretation of permanent employment with a term and the question around the issue is: how do we look at this individual with the issue that retirement has been taken away from them at the normal age of 65 or 63? And then a clear thing was in the case of Mr Molefe, because he is 50 and the Pension Fund said that we could purchase the additional years, his issue was resolved but, in the case of Anoj Singh, he was younger than that age when he came to work for Eskom. So, there was nothing that we could do for him. And I think the whole thing that you raised, the thing that started us looking at these issues was that the five years was forced, no, requested of Eskom.

Ms Mazzone: I do also find it strange that we have now gone from a permanent contract to a permanent contract for a fixed term and I’ve read up a little on labour law and I have consulted a few of my colleagues who are labour law specialists and they would agree that you are certainly quite right that it is not best practice at all to enter into a fixed term contract because, legally speaking, labour law does not recognise a fixed term contract as being permanent employment. So, I am afraid that I disagree with you when you say someone is permanently employed on a fixed term contract. You cannot legally be permanently employed on a fixed term contract. So, I would put it to you that you have been misled by whoever advised you. Certainly, the reason that people are put on fixed term contracts is so that the company does not have to afford them benefits, such as pension pay-outs, medical pay-outs, and, in fact, in this country, fixed term contracts are frowned upon because it is exploitation of the worker, and I see you nodding in agreement with me. We are clearly on the same page, so would you agree with me, it is virtually a legal impossibility to be permanently employed on a fixed term contract.

Mr Minnaar: Chair, through you, I don’t know and that’s why I say it’s important to get that legal opinion for that has to pave the way for us going forward as well. We obviously have to look at things totally differently going forward. But I agree with you on the whole issue, from a best practice point, we were put into a different situation and, where we are now, I would definitely look at it differently because, as I mentioned to you, these benefits had to be funded out of the total package of the individual, which, in our case, was proposing a recommended salary for Mr Molefe the same as he had received from Transnet, and also the benefits.

Ms Mazzone: Chair, my very last question. Mr Minnaar, since being informed that you were going to appear here today, have you had meetings with Eskom board members or any legal representatives of Eskom where you were trained in how to answer questions regarding your timeline?

Mr Minnaar: Not at all, Chair. I do, however, have meetings with the board members but those are on operational issues. I have not been trained at all. This is my record of events.

Ms Mazzone: Thank you, Chairperson.

Dr Z Luyenge (ANC): Thank you, Chairperson. Mr Minnaar, you are employed to render executive services at Eskom, dealing exclusively with the executives. Am I correct?

Mr Minnaar: You are correct, Chair.

Dr Luyenge: What are your major qualifications that put you to that level?

Mr Minnaar: I am a graduate and a post-graduate, but I think my exposure in the environment is what assisted me in the executive benefits environment over the past 17 years.

Dr Luyenge: Who deals with quality assurance at Eskom?

Mr Minnaar: We do have a quality assurance department, Chair, but not specifically in our environment.

Dr Luyenge: Within your environment?

Mr Minnaar: Within my environment, we just get audited. We don’t have a quality assurance. What we do, however, is obviously that information we provide is based on benchmark information and we have external companies that assist us with that.

Dr Luyenge: What made you not to advise the board and the executive at Eskom of the manner in which Eskom had acting board chairpersons, acting CEOs? All those aspects were actually part of your duties to exercise.

Mr Minnaar: Chairperson I don’t want to run away from any duties. I think, as I mentioned, I have been in Eskom for 28 years and it is an awesome organisation. What we see now in the last 10 years was obviously a fluctuation of chief executives coming in and out, some for only a few months. Eskom even had 20 days without a Chief Executive. I think that I benefit in that I do have access to the chairperson and, kindly enough, he listens to what I have to say, but I don’t think, as an organisation, that we can do too much in addressing those issues. I sometimes think that these things are perhaps not totally in our control, i.e. the appointment of people.

Dr Luyenge: In the appointment of Mr Brian Molefe, did you share your sentiments with either the Board or the executive, including the Minister, on whether the contract should be permanent or fixed term, and whether it would be viable for him as a pertains to the existing environment in Eskom.

Mr Minnaar: Yes, Chair, I am totally against term contracts as you expose the company. We would not have had this discussion today if it were not for the term. With SAA in 2001, phenomenal amounts were paid out, so you really do expose the organisation by enforcing term contracts. I did advise the chairperson of the People and Governance committee. I am quite outspoken about it.

Dr Luyenge: Did Mr Molefe resign or did he apply for early retirement?

Mr Minnaar: Chairperson, he applied for early retirement.

Dr Luyenge: When did you realise that?

Mr Minnaar: When the request was given to me, the specific dates I don’t know, and when I was requested to do the letter for the committee meeting on 21 November. That became clear then. The Chairperson shared with me Mr Molefe’s intent to retire. I have that on file.

Dr Luyenge: How much money from the Pension Fund, do you know of, that Mr Molefe has already benefitted?

Mr Minnaar: Chairperson, I am under correction and it would be bad for me to mention numbers. It is important to note that Mr Molefe brought in excess of R4 million over from his Transnet Fund to the Eskom Pension and Provident Fund. The third that was calculated would obviously include some of that money, but I haven’t got the numbers in front of me. I can try and get them for the Committee, if wanted. The Pension Fund stopped his retirement fund, as far as I know, until the outcome of the court case.

Dr Luyenge: Did Mr Molefe qualify for any pension benefits?

Mr Minnaar: For Eskom, I say: “Yes”.

Dr Luyenge: What if Mr Molefe tells you now that he understands fully that he was not even supposed to have received that money from the Pension Fund because he did not have 10 years’ service at Eskom. At the same time, he did not get into 60 years.

Mr Minnaar: Chair, as I mentioned, the resolution passed by the Board, and also the information received from the Eskom Pension and Provident Fund, my view is that Mr Molefe retired. I know there are different opinions about it, but that is my opinion.

Dr Luyenge: My last question. Can you kindly pronounce yourself as an executive services provider at Eskom and that you have actually achieved your goals and you provide the ideal service at Eskom?

Mr Minnaar: Chairperson I am not here to boast but I think I don’t reflect about me but about my department. I always say that you are as good as your last record. I think we have run a very professional service over the past 17 years. We make sure that everything is validated by information that we receive from sources, and whatever we present to the committee is obviously for their consideration. I don’t make any decisions on it, we merely implement. And I do believe, as per audits, that everything is done above record and all the documentation can help with that as well.

Dr Luyenge: But is it deliberate, on your part, that you are not giving straightforward answers to very clear questions here when you are appointed to provide special services to Eskom and also guide processes professionally that will take Eskom to where it should be?

Mr Minnaar: I do believe I provide a service, Chair.

Dr Luyenge: Letters were written, contracts were submitted without timelines. Contracts for Mr Molefe were not very clear and Mr Molefe can attest to the situation and says, “The one that I signed, the contract that I signed is the one that was saying I am permanently employed”. How could you say that you have provided executive services if you could not quality assure what is provided for your bosses.

Mr Minnaar: Chairperson, the information that we provide is to the best knowledge that we’ve got at that time. The contract that was signed was very clear about the dates. The letter merely indicated a term, but the contract that was signed was very clear. As I mentioned earlier, the contract that was mentioned that was signed on full-time, I do not have a copy of that. So, the only one that I have is the one that was specifically on the term, as signed by the chairperson of the Board and by Mr Molefe.

Dr Luyenge: I rest my case, Chairperson.

Mr Swart: Baie dankie, Mnr Minnaar. Dankie dat jy hier is. I want to ask a couple of questions, and I’ll put it to you in English. Firstly, you indicated on 18 April 2017, there was an internal investigation to determine the leak. Now that seems to have perturbed Eskom tremendously, but is it not correct that had the information not been in the public domain, Mr Molefe would have received the R30 odd million pension and no one would have been the wiser?

Mr Minnaar: Chairperson, you are 100% correct on the information not being in the public domain but the person that was very perturbed about the leak was myself because, in an organisation, it is necessary to keep some stuff internal and to try and manage that accordingly. Now, I think it is important that information like this comes out and the public knows about it, and we can see that we really do something about it, wrong or right. That is important, and you cannot argue around it. The concerning thing for me, is that Eskom, and now it’s Anton speaking, was becoming a place managed by the media and that hadn’t been the case. So, we don’t even know what’s going on when we come into the office, because we first read the newspapers and then make a joke and say, “This is what is happening today”. So, that is a concern for me.

Mr Swart: OK, but clearly a lot of this inquiry is based on media revelations or we would not have otherwise known. Was this at any time reported to the Portfolio Committee on Public Enterprises? No. It was only after it was divulged in the media, is that not correct?

Mr Minnaar: That is correct, unless this has been discussed with the Minister and then they would be aware of it.

Mr Swart: Is it morally defensible, in your view, to pay a person R30 million after 18 months of work? Yes or no.

Mr Minnaar: I think, yes.

Mr Swart: On what basis can it be morally defensible when the very issue in that Rule 28 speaks about 50 years old plus 10 years of service, which was not achieved, and you, yourself, have said that this was a unique situation? Can I just say to you that Ms Venetia Klein, in her statement, says in paragraph 80 that when it appeared that there had to be a five-year contract as opposed to a permanent contract – now you have continually said that it’s a permanent contract and that’s your view and the courts will decide on that – but, it is very clear from the Board’s perspective that it was a five-year contract. She says, “We agreed that an arrangement could be put in place to ensure he was not adversely affected in respect of his pension benefits”. Now it is very clear that there was some arrangement relating to the 10 years’ service that Eskom and yourselves came together and said, “We are going to pay to the Fund, not only the penalties, but also the 10-years and that, to me, is totally morally indefensible because that is why the 10-year requirement was there.

Mr Minnaar: Chairperson, I 100% percent agree but …

Mr Swart: Sorry, so you would agree it is morally indefensible?

Mr Minnaar: No, no, I don’t. I agree about the five-year contract and the decision to look at the pension. I disagree with the interpretation of the 50 years in Rule 28 because we were advised by the Pension Fund that it can be done. That wasn’t Eskom. It was clear from the Pension Fund that it could be done.

Mr Swart: You see, she also says in paragraph 82 of her statement: “It was at all times, my understanding, and I understood it as the intention of the Board, that Mr Molefe would only qualify for this benefit after serving an initial 5-year period and not the 18-month period”. So, the Board resolution, and their understanding, was that after a five-year period, there could be some qualification of this, but not after an 18-month period. So, I am sure that the whole Board must have been shocked. That is why you tried to cover up the leak because after 18 months, the public knows about it and it is outrageous. Is that not so?

Mr Minnaar: Chairperson, I disagree with covering up the leak. I’ve expressed my view why I think it’s important that information must not leak. The big thing is that I do agree that the intent was to sit a five-year period out but, the information was provided to the Board, and the resolution didn’t state that it must be done after five years. The resolution merely stated that Eskom will buy the additional years’ service.

Mr Swart: Why was there this sense of trying to help Mr Molefe, and Mr Anoj Singh? And, yes, we appreciate, according to the evidence, that they added a lot to Eskom, but we are also aware that there was a very clear, and this can be contested, link to Mr Salim Essa and the Guptas. Is that not also a reason why there was this keenness to assist with the early retirement that had never been done before – you admitted it yourself?

Mr Minnaar: Chairperson, I cannot get involved in any of the links with Mr Molefe. What I do want to mention is that I can judge him as well. He was one of the better executives that we have brought in in a long time. I judge him merely from a performance point of view.

Mr Swart: I appreciate that, but you agree that this had never been done before?

Mr Minnaar: I agree with you. We also never had a five-year term contract, as well, Chair.

Mr Swart: You see, that is the dispute now - whether it’s a permanent contract or a five-year contract. And it is also interesting that on 12 March, Ms Daniels had a meeting with various members where she indicates, and we’re going to hear Deputy Minister Martins, you heard that in the media, Mr Salim Essa, Mr Gupta, where the Molefe pension was discussed. This was now June/July this year. The whole issue of his court case about his pension was discussed. Would you not agree that it would give credence to the fact that there was a sympathetic view towards Mr Molefe, considering, and people are entitled to come and dispute, we have nothing to doubt Ms Daniels’ word, having that meeting to discuss Mr Molefe’s pension fund case. Doesn’t it seem strange to you that this whole issue would reach that level?

Mr Minnaar: I don’t know if it was discussed at that level but, as you mentioned, there was evidence around it, but I cannot make an opinion on that.

Mr Swart: But if you consider the weight of the evidence now, of a unique situation relating to this pension, a massive pension that would have been paid out had it not got into the public domain, plus now a great interest in the litigation from the Gupta family, from Mr Salim Essa. And we know now, if you look in the broader context, the Board is going to respond to that about the Tegeta contracts, does it not create an impression of a person receiving beneficial treatment?

Mr Minnaar: Chairperson, I don’t want to be naïve, but I can’t be led into that. It would be an opinion of mine. I think the key thing for Mr Molefe that pushed us around was the resolutions of the Board, making us think that we were entering into this term agreement, which was a first for us, and obviously they were looking at options on how to address a shortfall.

Mr Swart: But, you see, Mr Molefe had short term contracts prior. This was not a new thing for him. So why should it be to you such a great interest that he should have a pension benefit of this amount?

Mr Minnaar: Because he had it at a previous company, Chair.

Mr Swart: He had short term contracts at his previous companies.

Mr Minnaar: But he participated in the Pension Fund, in Transnet as well, Chair.

Mr Swart: At the meeting on 9 February 2016 with the P&G committee, you explained that, as a result of Mr Molefe short term contracts in numerous public entities where he had served at an executive level, Mr Molefe had been deprived of the opportunity to grow a pension fund in a single fund. So that obviously means that you did try to assist him and try to find a sympathetic way out. Would you not agree?

Mr Minnaar: I disagree with you, Chair. I don’t focus on individuals. We are looking at clear practices, whether an individual has a shortfall or not.

Mr Swart: I am just saying focus on the 10-year. Surely that was a massively sympathetic approach, once you understood that there wouldn’t be a 10-year contract. It was 10 years minimum, was that not so?

Mr Minnaar: That is correct. That was before the Pension Fund said that we could buy the additional service.

Mr Swart: And you had never done that before?

Mr Minnaar: We had never done that before. And as I said, we have never had term contracts before.

Mr Swart: Thank you, Chair.

Mr N Singh (IFP): Like my colleagues, especially Mr Swart, I am beginning to get an impression that you went out of your way to try and assist Mr Molefe to get the best deal possible. So, my question would be, you knew Mr Molefe for 18 months, what kind of relationship did you have with Mr Molefe? Did you have any discussions with him about pension and retirement benefits, whilst you were calculating or asking the Pension Fund to give you figures?

Mr Minnaar: Chairperson, that is correct. I even had a client liaison officer meet with Mr Molefe when he joined Eskom, and, at that time, it was for him to consider whether he wanted to bring his money over to the Eskom Pension Fund. That is what I normally do. When new people arrive, I introduce them to the client liaison officer of the Eskom Pension and Provident Fund. After that, there were no discussions on it until the approval was done on his early retirement and then I was looking at certain options as to what those pay-outs would be. But, that is not a specific thing to Mr Molefe, as I said we provided that to all the executives, although the Pension Fund does have online services that you can put your own information in and calculate possible pensions. But we normally provide the service. So, after the agreement on retirement, I had discussions with him around it.

Mr Singh So, you had a good relationship with him, you were familiar with him, and so on. Can I say that’s what happened?

Mr Minnaar: Chairperson, I have a relationship with all the executives. I have to, because we provide a service to them and also report to that function.

Mr Singh: Did you have any discussion with him about the actual amounts that were being given to you by the actuaries?

Mr Minnaar: No. Not on the total amount. I think there was an indication of possible pension pay-outs should he retire. As I say, that can be calculated. But the total amount, not as far as I know.

Mr Singh: Mr Minnaar, I’m trying to understand your role in the company. That is the question that Dr Luyenge asked. I get a sense that sometimes, unintended, you are overplaying your role and responsibility, and at other times, you downplay your role. In certain instances, as you have said in your own document: “During a 17-year tenure, we have provided service for seven chairmen and 12 chief executives”. In other instances, you don’t seem to know things, and in some instances, you know everything about the company. You are a very, very important player in the company.

Mr Minnaar: I don’t think I’m an important player, Chair, in terms of employees at Eskom. To my benefit, I have a long stint with Eskom. As I say, it is a great company, but I think what I do is to provide a professional service to the best of our ability. So, some of the information, I do have knowledge about and some I really don’t. And I think, we try to get advice on those issues and if there are mistakes made in the process, we will obviously pick up on that and learn.

Mr Singh: On 16 November you said you were requested by the chairperson of the P&G committee to identify benefits. And you said that early retirement could be considered, should Mr Molefe’s contract not be renewed, to ensure that he is not penalised by the term contract. What did you understand by that request? And how did you activate it?

Mr Minnaar: Chairperson, my understanding was, because it was the first time with a five-year contract where we take away a person’s ability to retire, that needs to be addressed. That was what he was losing and that was the question. How do we look at it? The other thing, and we need to keep in mind as well, should Mr Molefe have stayed and another term had been added onto it, his pension would have grown. I think that’s where the misinterpretation of this whole thing, with regards to long term, is. With regards to 5 years, we were looking at benefits for him should he retire, so that he is not worse off.

Mr Singh: Could that question not be interpreted as “Find the best possible deal for Mr Molefe. We need to give him a golden handshake. We need to give him these millions that can leave Eskom and he is our friend and we know him, and he is a very, very important player in political circles”.

Mr Minnaar: No, no, Chair. You just have to look at it to see that he is being deprived of certain benefits of being a permanent employee and the request to me was to see if there were ways that we could address it.

Mr Singh: On 20 November, you informed the P&G chairperson that it would be important to get ministerial input. Why was that so? It is normally the Board and the Pension Fund and the employee that deals with these things. Why get the Minister involved at that stage, on your advice?

Mr Minnaar: Chairperson, it was the first time that we dealt, as I mentioned, with the five-year contract and I know there is risk in the whole thing. We can see today what it is – the different understanding about what is permanent and non-permanent. So, I thought, if we made those specific arrangements, it would be important that the Minister was at least informed, and, I think, it was a risk and she needed to be informed about it.

Mr Singh: And he took your advice and informed the Minister?

Mr Minnaar: No, I don’t inform. I don’t deal with the Minister. I provided a letter for the chairperson of the People and Governance committee to look at. She agreed to that letter and that it was signed by the board chairperson because all communication goes through him.

Mr Singh: Do you know whether that letter went to the Minister, indicating that these are the possible retirement benefits that Mr Molefe could get?

Mr Minnaar: It was sent through to the Minister and they confirmed receipt of the letter.

Mr Singh: So, are you saying that the Minister was aware, long before she became surprised, at the R30 million pay-out?

Mr Minnaar: I don’t know if the Minister was aware, but her Department was aware.

Mr Singh: Her Department?

Mr Minnaar: I assume so because we delivered it to the Department of Public Enterprises.

Mr Singh: You say you were surprised, Mr Minnaar, when the journalist said that a R30 million payment was made. Now that is the first time that I have heard about the R25 million in response to a question by Ms Mazzone. Then you speak of R4 million Mr Molefe brought into the Fund from Transnet. Wouldn’t that have made up the R30 million?

Mr Minnaar: No, Chair, the money that he brought over is invested in the Eskom Pension and Provident Fund. That is not reflected. R25 million was a calculation of his pension benefits for retirement and that is the number that we received from the Fund at the time. That was recalculated as he got married afterwards and that changed the numbers to R30 million. That is why I was not aware of that number at that stage.

Mr Singh: When they mentioned R30 million, why would it be such a surprise because you were already thinking of R25 million, you were aware of R25 million. Did you try and find out where they got the information from, and if that information was authentic?

Mr Minnaar: I immediately tried to find out. That is why I was in shock about the number. R5 million was a lot of money, Chair. I don’t think you are going to change that within six months, so it must have been something in the calculation, and I was concerned. I thought about it and immediately went to find out.

Mr Singh: I put it to you that R25 million is a lot of money and R5 million is small change compared to R25 million.

Mr Minnaar: I think we have to account for every cent and it is big money.

Mr Singh: You were still prepared to say to Mr Swart that it was reasonable. There was nothing wrong with it. So, if it was R25 million, it was okay. If it was R30 million, it was not okay.

Mr Minnaar: No, Chair, I disagree. I think it is important to look at the remuneration for chief executives. I have always said that if Eskom sneezes, the country catches pneumonia. We compete in the same market to get top executives and I think the record of 10 CEOs in 10 years, is something that this Committee must raise as well. It may be a concern in terms of the stability of the company. We pay big bonuses but companies, like Sasol, pay huge bonuses to those individuals, if you look in their company annual reports. Whether Sasol is there tomorrow or not, is not going to affect the country, except in terms of employment. So, it’s key that we have to get these people and, I think, that a key thing is that we when we go into a contract, you have to pay much, much more than the R30 million to his pension fund. That’s merely my view, Chair.

Mr Singh: Would I be incorrect in saying that you, yourself, tried to get the best deal possible for Mr Molefe? You knew him well and you tried to get the best deal for him and that’s how the amount came to what it was.

Mr Minnaar: No, Chair. The instruction we got from the chairperson was to look at options. I didn’t come up with this idea. On that, we requested information and tried to find out if it could be done. It was put in place.

Mr M Dlamini (EFF): You are a man of opinions. Adv Vanara asked you about the contract. It’s either a permanent contract or a permanent contract with a term, but it’s a lot of confusion. But tell me, in your own opinion, Brian worked for 18 months, how much was he supposed to get?

Mr Minnaar: Chairperson, he got his approved remuneration by the Department and that I can’t recall, but it is reflected in the Annual Report.

Mr Dlamini: The R25 million. On 23 March you are saying that, once calculated, Eskom made a payment to the Fund. What are you referring to here? Is this the same amount that we are talking about?

Mr Minnaar: Chairperson, that is correct. The amount that was paid, but Mr Molefe didn’t receive it. It goes from Eskom payroll directly over to the Eskom Pension and Provident Fund. It’s a transaction that we do and that is the money that was the shortfall for him to retire.

Mr Dlamini: How much was that?

Mr Minnaar: It was the R30 million, Chair.

Mr Dlamini: That is the R30 million. The calculation was done by the Fund.

Mr Minnaar: That is correct, Chair.

Mr Dlamini: Who came up with the figure of R25 million? You say the Fund does the calculation and they send it to Eskom and Eskom pays according to that calculation. How much did the Fund calculate and said to Eskom it must pay? How much was that?

Mr Minnaar: Just to put the thing into perspective. Before Mr Molefe retired, the Committee wanted to find out how much money we were going to pay. What is the estimated amount? So that was done a few months before Mr Molefe retired. That was the actuarial value that had been calculated by the Fund. We get a number from them. When he actually retired, they did a recalculation at the date of retirement and, in between, he got married, and that obviously played a role in his retirement calculation. The final amount that he received from the Eskom Pension and Provident Fund (EPPF) was the R30 million.

Mr Dlamini: You are saying at the time of resignation, there was a recalculation?

Mr Minnaar: Retirement, yes.

Mr Dlamini: The recalculation was how much that was sent to Eskom?

Mr Minnaar: That was the R30 million, Chair.

Mr Dlamini: So, the recalculation was R30 million and that was sent to Eskom. And after that Eskom paid the 30 million?

Mr Minnaar: Yes, we paid it over to EPPF.

Mr Dlamini: So, you paid R30 million, but you are saying you were not aware of this until the media said it was R30 million. So, which one came first?

Mr Minnaar: No, Chair, we do not work with the figures. We don’t see those numbers. We merely action the process of retirement and we never know the exact numbers, unless we do a request before the time to see what the estimations are.

Mr Dlamini: I want to understand your process. The Fund calculates at retirement, saying R30 million, and then they send that information to Eskom and Eskom releases R30 million to the Fund. Then the Fund is supposed to pay Brian. Is that how it works?

Mr Minnaar: Chair, you are 100% correct, except Brian doesn’t get the R30 million. He would get a monthly pension. But the R30 million was paid from Eskom to the Fund in order for them to do arrangements so he can get a monthly pension. There is an option that you can take one third lump sum and then a monthly pension. That would be the amount that went through to him if he had opted for that, and then they calculate the monthly pension.

Mr Dlamini: What I am trying to understand here is this issue of the media. You are saying that the Fund, has the calculation, they tell Eskom that they have done a recalculation and Eskom pays the money. It is actually R30 million that has been paid and you, at Eskom, are saying that you only learnt about the R30 million from the media. So how did that process happen? The instruction was issued to you that R30 million must be paid and Eskom paid and then you learned that from the media. That’s where I get the confusion.

Mr Minnaar: Chair, you are 100% correct. When that amount was raised it goes through to our financial department that pays the money over. So, financial accounting obviously gets the number to be paid to the organisation and somebody must have picked it up there and shared it with the media. That’s how it got leaked.

Mr Dlamini: So, on getting information from the media, you are saying it was you as an individual and not Eskom as an organisation. When you sit there we think you are representing the organisation, but you are saying as an individual, you were not aware until the media published it. However, Eskom as an organisation, through its processes, was aware of the payment of R30 million.

Mr Minnaar: Yes, Eskom was aware when the journal was raised by Finance to do the payment.

Mr Dlamini: Another Member asked, should the media not have made the public aware? The process was correct within Eskom. Eskom paid the money. It is only you, the executives and the Board that behave as if something is wrong when it’s in the media. Is that correct?

Mr Minnaar: Chair, the reason we queried it, was just the difference in the amount sent to us originally by the Fund and the actual amount. We just needed to query it and know why it was higher.

Mr Dlamini: No, but you’re saying there is a calculation and at the time of retirement there is a recalculation. So, which different amount are you referring to now?

Mr Minnaar: We knew about the R25 million and the final amount was R30 million.

Mr Dlamini: Let’s go to the R25 million. At what stage was the R25 million the correct figure?

Mr Minnaar: I don’t have the exact date, Chair. I will look it up for you.

Mr Dlamini: At what stage? At the retirement stage?

Mr Minnaar: We received that information on 15 November 2016.

Mr Dlamini: That was the stage of retirement? There are too many dates. I just want to understand the stage. You are saying that when someone comes in, a calculation is made and when someone retires, there is a recalculation. The R25 million - at what stage was that? There are two recalculations. I want to get to the R25 million.

Mr Minnaar: R25 million was 15 November 2016. That was before he was married, and the recalculation was done at 31 December 2016

Mr Dlamini: OK, so when he retires it is R30 million and that was an issue with Eskom.

Mr Minnaar: Chair, that is correct.

Mr Dlamini: But the finance guys did not raise it with you or the Board. They just went ahead and paid it. See you only now have an inquiry within your internal organisation but the money has already been paid. The finance guys didn’t come to you and say, “This is the amount we’ve been given,” but they just went ahead and paid.

Mr Minnaar: The principle of retirement was already approved, Chair.

Dl: Was the Minister at the meeting at the hotel?

Mr Minnaar: No, Chair, she was not.

Mr Dlamini: Now there is R30 million recalculated. Who has the right to recalculate the pension fund? Is it Eskom or the Fund?

Mr Minnaar: The Pension Fund, Chair. We don’t do it. Sorry, Eskom doesn’t do it; it is the Fund.

Mr Dlamini: And then you are saying that the Minister declined the R30 million.

Mr Minnaar: Chair, that is correct.

Mr Dlamini: So, in this Pension Fund arrangement, did you ask the Minister on what basis she declined the calculations? If the Pension Fund has the responsibility legally to do the calculations, then it must be given the R30 million. Then the Minister comes and says that is not correct. Did you check with the Minister on what basis it was declined?

Mr Minnaar: No, I did not.

Mr Dlamini: And the Board, they asked the Minister? Do you know?

Mr Minnaar: Chair, they were there but I am going to lie to you by trying to recall the meeting. There was a lot of discussion at the meeting, but I can’t remember the detail. All I know is that it was declined, and I had to look at different options.

Mr Dlamini: So, when it was declined, what did you do, as the person handling all the documentation?

Mr Minnaar: No, we were waiting for the next steps. That is why we had a discussion at the hotel to look at the next steps going forward.

Mr Dlamini: But what were the necessary steps that you had to look at? Why did they not go back to the Minister and tell her that she had no right to declare on that? There is a Fund, a structure that determines what is correct and what is not correct. Your opinions don’t matter on this. Why did you have to sit at the hotel and look at other options, if you knew that the Fund was the correct structure to deal with the amount?

Mr Minnaar: You have a point. I can’t answer that, but I know that the Committee was looking at different options and having discussions with Mr Molefe.

Mr Dlamini: During the time when Molefe was there, do you think he had the upper hand of the Board? Was Molefe more powerful than the Board at the time?

Mr Minnaar: I don’t think Mr Molefe was more powerful than the board but Mr Molefe was a good businessman and he brought some energy into Eskom that was much needed at the time. That’s why I say, I can’t talk about the person everybody is investigating, but rather as an individual and as an executive. We really saw a change in Eskom.

Mr Dlamini: Why was there a need for the meeting when it was not Eskom’s responsibility? The Fund had said that the money due to Mr Molefe was R30 million. Why did the Board and the Minister even have to sit down and have a discussion when it is not their responsibility? The Fund has said R30 million and that’s where it ends. Did I hear that the Board had to go the extra mile and involve themselves in something that is not their responsibility?

Mr Minnaar: I, unfortunately, cannot answer that.

Mr Dlamini: During Molefe’s term at Eskom, was there any external political influence?

Mr Minnaar: Chair, I don’t deal with that at all. I really don’t know.

Mr Dlamini: In your professional work, do you consider political dynamics of business before you give advice or make a decision?

Mr Minnaar: Chairperson, I think it is very difficult because we don’t have a say on whatever political decisions have been made. We sometimes get the end of the process of what has been decided. That is my personal view.

Mr Dlamini: But, you yourself, do consider those before you make decisions because you seem to have gone the extra mile here, trying to please some structures that are not within Eskom. From your own way of operating, before you take a decision as a professional, do you consider the political or business dynamics linked to or involved with that person, or do you just look at what needs to be done as a professional?

Mr Minnaar: Chairperson, definitely. That is also why I raised that we write a letter to the Minister on the intent of the changes to the retirement for Mr Molefe.

Mr Dlamini: So, when you do that consideration, what becomes the correct decision? What is politically correct in terms of having to communicate with those people? I’m asking that on the basis that the Fund said R30 million, yet you still had to go and speak to politicians and try and speak to the Board, when there was, to me, no need.

Mr Minnaar: Chairperson, I am sorry, but I don’t deal with them and so I don’t have any inputs on that.

Mr Dlamini: Thank you, Chair.

Mr E Marais (DA): Mr Minnaar, you are on the F level, that’s the highest level in Eskom.

Mr Minnaar: No, Chair, I am not on F level. I am an E-band manager.

Mr Marais: Is that the second level layer?

Mr Minnaar: Chair, that is correct, a level lower.

Mr Marais: And you have 17 years of service?

Mr Minnaar: Chair, 28 in service and 17 in that position.

Mr Marais: Overall, you have 28 years of service within Eskom?

Mr Minnaar: It sounds like it is counting against me, but I do.

Mr Marais So, you have thorough knowledge of the whole organisation. That’s the point.

Mr Minnaar: No, sir, I don’t.

Mr Marais: You should have with those years of service. I want to ask you this question. You said previously the Board had declined requests for early retirement. Can you advise me? Was it different boards and not this Board?

Mr Minnaar: It was different boards.

Mr Marais: As general knowledge, I won’t get into the exact amount, but what is the remuneration of an ordinary board member

Mr Minnaar: Chairperson, around R77 000 a month, roughly.

Mr Marais: R77 000 per month. And what hours do they sit for that R77 000 per month? Plus/minus?

Mr Minnaar: Chairperson, can I tell you, I think Cabinet must know about this as the Department of Public Enterprises has a set of remuneration guidelines. That was established in 2005. In those guidelines they don’t have an honorarium payment per meeting. They have a full payment for board membership and not based on attendance. We are still based on the 2005 guidelines as we are still waiting for the 2013 standards that will be approved soon. It doesn’t matter how many committee meetings they attend, it is calculated merely on how many committees they belong to.

Mr Marais: What is the salary, plus/minus, of the chairperson?

Mr Minnaar: The chairperson is just over R1 million.

Mr Marais: And the vice chairperson?

Mr Minnaar: We do not have a vice chairperson.

Mr Marais: So, it is just the Chairperson and ordinary members?

Mr Minnaar: That is correct, Chair

Mr Marais: I want to make the point that the board members, and specifically the chairperson, earn quite a substantial salary and they have to make, let’s put the word, ‘wise’ decisions on behalf of the Board and Eskom and on behalf of the people of South Africa because Eskom actually belongs to the taxpayers of South Africa. So, if they make a decision to buy pension back for Mr Molefe, they must make a very wise decision if they are going to use the taxpayers’ money for that purpose. Now the question should always be, if you run a company yourself and it belongs to you, and you ask the board, if it belongs to you, would you make a payment of R30 million after 18 months’ service and approve that a person buy back pension because it is the person’s decision, actually, to leave the company?

Mr Minnaar: Chairperson, what I am going to say is very difficult and perhaps it’s not want people what to hear. It depends on the performance of the individual. We know that the load shedding really came down. Maybe it was luck on his side but during his watch we actually got the load shedding down. If you had to pay a person 5% to prevent load shedding for a year, you would pay millions. So, you ask me, if I was the private owner of Eskom and the individual comes and he can stop load shedding for me for 12 months, I would pay him.

Mr Marais: Okay that’s in your view. Now I shall come back to the Board because it important for me that those board members make a decision on behalf of the people of South Africa when approving such payments. Is that true?

Mr Minnaar: That is true, Chair.

Mr Marais: And for the salary that they receive, or the remuneration that they earn, they should actually apply their minds before making such payments.

Mr Minnaar: Whether it is a small amount or a big amount, they are supposed apply their minds.

Mr Marais: I just want to ask this question because it is important for me just to get to terms with it. For example, a teacher in the civil service wants to buy back pension, it could be approved but then the person himself had to pay for the buy-back of the pension. Is that to your knowledge as well?

Mr Minnaar: I have no knowledge of that, Chair.

Mr Marais: In this case, it is not the person that is paying for the buy-back, it is Eskom paying the amount and not Mr Molefe himself. I just want clarity from you on your document regarding 6 September 2016. Can you explain to me because I can’t get to grips with it? “It was decided to increase the long-term incentive rewards for both Mr Molefe and Mr Singh to two times their annual pension earnings. Was this ever done before, to your knowledge, having been in the company for 28 years?

Mr Minnaar: No. We made changes on awards for retention purposes, but we have never had it at two times.

Mr Marais: So why the special treatment?

Mr Minnaar: I think it was for retention purposes, Chair. They want to make sure that the people stay.

Mr Marais: Niemand in die lewe is onmisbar op enige posisie. Dit is baie duidelik. [No one in life is irreplaceable in any position. That is very clear.] And, it was backdated to April 2015. Is that correct?

Mr Minnaar: That was when the awards were made paid on a long-term incentive scheme, but it is proportional according to the months that the person is a member of the scheme.

Mr Marais: I want to get back to the final point I want to make. As I asked you originally, previously applications had been declined for early retirement and that was a different Board, but it was applicable here. It varies actually, depending on who is sitting on the Board, what decision is taken.

Mr Minnaar: Chair, if I can just correct that. The previous Board that declined payments also approved payments, so it was a different Board in both cases.

Mr Marais What would be the difference where, in some cases, it is declined, and in other cases, it is approved.

Mr Minnaar: I think in some cases for operational decisions, it is fine sometimes to let people go and it is a process that you can follow. In other cases, where you want to retain individuals, the Board can decide that they don’t want to do it, so then the person would have to forfeit the money and resign. So, it is for retention purposes and whether it’s about a person that you want to keep or don’t want to keep.

Mr Marais: Is it only for retention purposes?

Mr Minnaar: I would think so.

Mr Marais: Thank you Chair.

Ms L Mnganga-Gcabasha (ANC): You are saying that the five-year contract was not a general practice within the business environment.

Mr Minnaar: That is correct, Chair.

Ms Mnganga-Gcabasha: You received a letter from the Minister to say your Group Executive must be put on a five-year contract. Not knowing how to implement that, what did you do?

Mr Minnaar: Chairperson, our understanding was that it would be a normal permanent employment, as we have done with all our executives and all we changed was the term.

Ms Mnganga-Gcabasha: No, for me, that was wrong, because if you are not familiar with a particular matter, you get clarity. You seek clarity on that particular matter. You have competent people in your HR department, you have competent people in your legal department and with your experience, you should know better. Your team, within your department, should have searched for what it meant. Did you seek clarity from the Minister because you’re not familiar with that practice, or did you approach the DG in the Department of Public Enterprises to give you clarity, because you should be aware that government has been practising the five-year contract for some time, and you are a government entity? If you were not sure, why did you not seek clarity? You received a letter from the Minister instructing you and if you were not sure, why did you not seek clarity?

Mr Minnaar: Chairperson, we did not seek clarity, but we are now aware and will do so if that ever comes up again. And just to let you know that people on Department of Public Enterprises (DPE) contracts all participate in the state pension fund. They are not seen as contractors but as pension beneficiaries.

Ms Mnganga-Gcabasha So you assumed that a 5-year contract is a permanent contract that is entitled to all the benefits.

Mr Minnaar: Yes, we did, Chair.

Ms Mnganga-Gcabasha I do have a problem with that. No one gets appointed to the position in HR or in the legal department without a degree in a company as big as Eskom. You have brilliant minds in that company and you are telling us that all those brilliant minds, competent people, all of them from HR, from Legal, did not think of this? Why are you still keeping them? And why are you still in that company?

Mr Minnaar: I cannot answer that for you, Chair, unfortunately.

Ms Mnganga-Gcabasha You will have to because the top executives are responsible for the personnel in the department. You will have to answer that.

Mr Minnaar: Chairperson, the instruction that we got from the Minister was for a five-year term and we interpreted it as permanent employment. We did not see it, at that stage, necessary to request any further information. The Board provided us with exactly the same understanding of it. There was no indication that it would be treated differently and, based on information we had at hand, a decision was made.

Ms Mnganga-Gcabasha: I will tell you what it means to have a five-year contract. You, as an executive of Eskom, you have a responsibility to do it. You put together a contract. You said that you are competing with the private sector and other state-owned companies. Particularly for that reason, the package is higher, if you are on a five-year contract, than the usual package of executives in permanent positions. The package is structured in a manner that the employee can structure it himself. You can have your own retirement annuity, your home loan with the bank, your own medical scheme because you are given enough, since you’re not going to get benefits from the employer. The employer gives you a package that is enough for you to structure for yourself all those benefits. I am saying to you, your Group Executive in a fixed five-year contract, did not qualify for a pension, a home loan benefit or a medical scheme medical scheme subsidised by the company. He had an opportunity to create that within the high package offered by the company.

Mr Minnaar: Chair, I disagree with that. The Group Executive did not receive a higher package. His package was on the median of DPE standards for basic salary. He did not have a high package to fund all of these things. If that was the case, the package should have been much higher. It would have to provide for his pension fund and bonuses as well, which it didn’t do.

Ms Mnganga-Gcabasha: You should have done that as soon as you received an instruction from the Minister and acted on that instruction. You should have researched that. You have researchers in your company that can assist HR and the legal department; if you were willing to do that. Even local government, the municipalities have been practising five-year contracts for many years. They know. If you had the will to get information on how to implement a five-year contract, you would have done that. I am saying to you as Eskom management, there was no will in you to implement the five-year contract as instructed by the stakeholder, the Minister, as per the Cabinet decision. What is your answer to that?

Mr Minnaar: Chair, it was a clear instruction, so we could not interpret it. I am here to provide all the information that I can. Those are opinions and I cannot comment on it.

Ms Mnganga-Gcabasha: This is a Portfolio Committee inquiry and you have to give answers. It is not a court of law. This is a Portfolio Committee and, as an executive, you have to give us answers here. This is a Portfolio Committee on Public Enterprises inquiry. You have to give us answers.

Mr Minnaar: Chair, through you, I will try my best to do that.

Ms Mnganga-Gcabasha: Let us say we accept, for argument’s sake, your position that when you employ your Group Executive on 1 October, your understanding as has been practice, was a permanent position or a permanent contract, but when you received a letter from the Minister, that changes everything. As I said, you should have researched it, and you start in February or 1 March if you received the letter in February but by 1 March, your Group Executive should have been on a contract and ceased to have benefits that are for permanent executive employees only. I am saying that it was done deliberately. With all of these good minds, with experience and long-term service, none of you thought that you must get clarity on what is entailed in a five-year contract? I am telling you that HR would be able to give you what is involved in a five-year contract. You can go to any Metro and HR will give you what is in a contract. You would’ve calculated, even if you didn’t want to calculate from October, you would’ve calculated from 1 March. There is no way that you can sit there and tell the Portfolio Committee inquiry that you did not know about the amount of the pension. It is not only the Fund that has the responsibility to calculate a pension. Let me remind you, the company contributes towards pension on a monthly basis for everyone in the company. You can’t tell us that you didn’t know about the amount that would be paid. Yes, the amounts are calculated by the Pension Fund. The Pension Fund was seated here opposite us. You did not send a letter saying that the Group Executive was employed on a five-year term contract. Is that true?

Mr Minnaar: Chair, we never send the contracts through.

Ms Mnganga-Gcabasha: Why?

Mr Minnaar: We never do. We don’t provide them with employment contracts. We appoint them on the system.

Ms Mnganga-Gcabasha: How are they supposed to calculate the pension if they don’t know on what basis the employee is employed. Do they know how to manage pension funds?

Mr Minnaar: They base it on the normal pension fund contributions, Chair.

Ms Mnganga-Gcabasha: The Pension Fund must know. They must get information from the employer, whether this employee is on a one-year contract or on a permanent basis. They should be given it. You should have informed the Pension Fund when you started to structure the five-year contract. Why not?

Mr Minnaar: Because we were of the understanding that Mr Molefe was permanently employed.

Ms Mnganga-Gcabasha: You assumed. That is why you are here today. That’s why this matter is in court. But your Group Executive was here. At least he was able to admit that he was not eligible to receive a pension on a five-year contract. Why is it so difficult for you to admit that?

Mr Minnaar: Chairperson, I don’t have to admit anything. I think that we are here to look at the facts and as I mentioned these things are open for debate by the Committee. I am clearly of the view that the proceedings were followed correctly and except for the issue around “term” and “permanent”, that the Pension Fund is now arguing, Mr Molefe is on early retirement. I admit going forward, if we ever get a term contract again, there has to be a clear negotiation between the Board and the Chief Executive before he even starts. I think a better thing even, that we must raise here, is why did the Chief Executive start working without a contract? That must be in place before you actually start. I mean, in the private sector, you won’t get a guy that comes, starts working and then determines his contract over the next month or so and decides what he wants to do. So, in principle, that is wrong.

Ms Mnganga-Gcabasha: I am still coming to that. Rather just tell us, boetie, why you did not draw up a contract in the first place. From 1 October or 1 November, whichever is the case. Why was there no contract up to February?

Mr Minnaar: There was a discussion between the Board and the Minister in finalising the contractual issues.

Ms Mnganga-Gcabasha: No, the negotiations are done before the person starts working.

Mr Minnaar: That did not happen, Chair.

Ms Mnganga-Gcabasha: Why not when you have an HR and a legal department? Why not?

Mr Minnaar: Chair, these things happen at Board level between the Minister and not us. As soon as we get the instruction, we start working on it.

Ms Mnganga-Gcabasha: When did you get an instruction?

Mr Minnaar: I’ll go through my document. The instruction was on 2 October 2015 in a letter from the Minister, not stating a term contract. That was when we started working on it.

Ms Mnganga-Gcabasha: And that was an instruction from the Board, because you stated that you were waiting for the Board’s decision. And what did you do then?

Mr Minnaar: We started drafting the normal standard employment contract. I shared it with the People and Governance committee and Mr Molefe.

Ms Mnganga-Gcabasha: How long did that take?

Mr Minnaar: It depends how quickly the Minister get backs to us.

Ms Mnganga-Gcabasha: My question was how long did that take?

Mr Minnaar: The letter originally received from the Minister was on 2 October 2015 and the final contract was in March 2016.

Ms Mnganga-Gcabasha: That is where the problem is. It takes you more than three months to develop a contract. Is that a standard practice in Eskom?

Mr Minnaar: Chair, as I mentioned, a five-year contract is not a standard practice in Eskom and, so we had never had the problem. Just to recall. The 2 October 2015 was when the Minister sent the letter to us informing us about his employment. A month after that, it changed to the five-year term. So, there was already a month and a few days gone and after that there were the discussions finalising the issues.

Ms Mnganga-Gcabasha: How do you pay an employee without a contract in place?

Mr Minnaar: We paid him based on the remuneration approved by the Minister as in her letter.

Ms Mnganga-Gcabasha: Is that normal practice?

Mr Minnaar: A five-year contract is not a normal practice. So that was the first time that it happened

Ms Mnganga-Gcabasha: The buy-in of a ten-year pension doesn’t arise as the Group Executive did not qualify, in the first place, to receive a pension. So, a ten-year contract does not arise for this Portfolio Committee. The court process is fine, but for this Portfolio Committee it is not going to arise.

Chairperson: Mr Dlamini I know that there is something you want to raise. I am not going to allow you to raise anything now. It is my turn to raise things.

Mr Dlamini: It is wrong to say that I cannot speak. You don’t know what I want to say. I am not even asking questions of the witness. Don’t be a bully.

After an exchange of words, the Chairperson continued the hearing.

Chairperson: It was clear from Mr Minnaar there was no contract for Mr Molefe. In a big company like Eskom you just get employed. There is no contract for any employee until they rethink that there should be a contract in place because you are now permanently temporarily employed. Therefore, there should be a contract in place. Mr Molefe, according to everyone who spoke about Mr Molefe, including himself, was good. He brought change, so it was good that he came to Eskom. It was what was needed. I take it, Mr Minnaar, that the money you calculated, you people of Eskom, all of you, it was a golden handshake, called a retirement, for Mr Molefe who had resigned from Eskom or who was on unpaid leave. Members, if you remember, there is also an issue that Mr Molefe was on unpaid leave. When we asked why the organisation took Mr Molefe as a Member of Parliament, the response was that Mr Molefe was a Member of Parliament because he was on unpaid leave. If I remember well, that was said to us. Since he had brought stability to Eskom, he needed something to take home. I just wanted to check with Mr Minnaar, was it an instruction that Mr Molefe was to be given R25 million or R30 million or whatever money that has to be given? Was it an instruction from Salim Essa or was it an instruction from somebody that you have to do it?

Mr Minnaar: Chairperson, as I am under oath, I can say to you that there was no instruction. I never received an instruction from anybody, except from the chairperson of the People and Governance committee, which was a request to look at options.

Chairperson: The issue of retirement, when did it come up because Mr Molefe was also on unpaid leave during the time that he left Eskom.

Mr Minnaar: Chair, early retirement came up when we had a discussion on the term contract and one of the issues to address was his inability to retire from Eskom.

Chairperson: Is it possible that you give us just an idea of what was really in the letter from the Minister? Or was it in a letter from you to the Minister explaining the retirement of Mr Molefe - or whoever has written the letter between you, the Board and the Minister. What was explained in that letter because it looks like that was where the gist of the matter is. It’s in the letter.

Mr Minnaar: Chair, the letter was written to the Minister addressing early retirement, seeing that he was on a term contract and that Eskom would buy his 10 years’ service. That was clearly stated in the letter.

Chairperson: Maybe I will be repeating the same question that has been asked. Who gives who instructions, the Board or the Pension Fund? Who gave the instructions for the Pension Fund to calculate the pension from his 50th birthday until 63, when he was going to get pension? Who gives the instructions that it must be done, even if he only worked for 18 months?

Mr Minnaar: Chair, we cannot instruct the Pension Fund to do anything that does not comply with the rules. So, the first thing is that we have to request from the Pension Fund if it can be done. If they agree, then we can action early retirement and after that we notify the Pension Fund of the early retirement as per the agreement and they then calculate the retirement amount.

Chairperson No, Mr Minnaar, the issue of the executive or the employment in Eskom is becoming more worrisome. After the saga with Mr Molefe’s pension, retirement, resignation, unpaid leave, where do you stand now? What is your future preparation for such unforeseen circumstances? I say unforeseen circumstances, but I am aware, circumstances were made to be there.

Mr Minnaar: Chairperson, it is very clear if, in the future, we are instructed again by the Department to enter into a term contract, whether it is someone seconded to us or someone from outside, we would have to get clear instructions from the Minister or the Department as to what they foresee in that payment. That will be very interesting, for all SOEs, because the guidelines do not make provision for five-year contracts. They look at permanent employment contracts. So, we have to get a very clear indication from them, and I think it will be a problem if we appoint someone from outside because we cannot allow them to work without a contract, as in Mr Molefe’s case. They have to define that remuneration. For Eskom, this would be the first time that we would be clearly guided, and the Department will have to be very alert as to how we take this forward.

Ms Mnganga-Gcabasha: Was Mr Molefe on unpaid leave or retirement?

Mr Minnaar: I don’t know if he is on unpaid leave or not, but he is not on the Eskom system, so he is not getting paid anything at the moment.

Chairperson: It is so unfortunate that this has happened in an institution, respected by the world, known as Eskom, the biggest entity that has millions if not billions of budget. Big mistake that has happened, because now Mr Molefe agreed, in this very Committee, that it was wrong for him to have a pension fund within Eskom. And you yourself Mr Minnaar, don’t want to say that it was a mistake. It is unfortunate. He, himself, saw it as a mistake but you do not want to agree that in your calculations, in whatever you have done, you have helped in misleading the Board and in misleading the Minister. If you say it was a mistake, I agree it was a mistake. That would be understandable, but we cannot understand it if you do not agree that it was a mistake. You could have had a meeting and thought of better incentive for Mr Molefe. It is something that should have come up in the long run if you have the heart of the country in you and the heart of putting Eskom into a better position. Do you still not want to say that it was a mistake?

Mr Minnaar: Chair, I am very clear that it was not a mistake. It was done by the book. The decision to approve it could be reconsidered but I wasn’t part of that decision. The information leading to that decision was clear, signed and can be audited. So, I haven’t misled anything. We were clearly guided by whatever information we had on hand. As I mentioned, that was given to the P&G committee for consideration, and a lot of individuals sit on that committee where the agreement was made. The reason why Mr Molefe said that he is not entitled to a pension? I don’t know why he would say that. But if you look at things from a procedural perspective, everything was done and agreed upon.

Chairperson: Eskom is proposing a tariff hike of 19% but the reputation of Eskom has been damaged. Would you be able to give me information that I can carry to the people on the ground in saying that you have not made a mistake in calculating Mr Molefe’s pension, and you are able to justify the tariff hike in that situation because a layperson on the ground would say, if Eskom is able to take out of its coffers R30 million to pay a pension fund for Mr Molefe who has worked for Eskom for 18 months, why is Eskom expecting people on the ground to pay a hike of 19,9%? Can you give me words of justification that I can carry on the ground to a person who is listening to you right now on the ground?

Mr Minnaar: Chairperson, what I can say is to reiterate that the whole calculation was with no poor intent, or by instruction from anyone. It was ways of looking at addressing a five-year contract, which we were dealing with for the first time and procedurally everything was done hundred percent correctly. I don’t know anything about the price hikes and I think our learned colleagues will provide more information around that. And I think it is more complex because Eskom sits with a huge amount of other issues. We employ 10 000 people more than we did previously, which is a massive cost to the organisation, which I cannot comment on now but, from a procedural point of view, I am very comfortable telling everyone that there was no bad intent. It was merely looking at addressing a contract.

Chairperson: Thank you very much. I think, Honourable Members, there is no one who wants to take a second bite because we have exhausted the questions that we had for Mr Minnaar.

Afternoon session

Hearing of Mr Anoj Singh, suspended Eskom CFO
Chairperson: Let me take this opportunity, board chairperson, to announce that the Committee has taken a decision that we start with Mr Anoj Singh. We were trying to wait for him. We were expecting him to come at 2 o’clock but he has just arrived. Good afternoon, Mr Anoj Singh. I see that you are with your legal people. This is the parliamentary committee, that you know, of Public Enterprises. We have invited you to the inquiry of Public Enterprises. In July 2017, we informed the Eskom board that we would want to see you in the inquiry. We invited you towards the end of November and we told you that you had to appear in the inquiry. The week before last, the week of the end of November, we received an apology that you were not ready for the Committee and the Committee must give you time. The Committee took a decision that we postpone the inquiry and do some other necessary Committee work. Then we gave you the date of today.

In all those instances, we were waiting for you to give us documents that you were going to collate. You wanted information from the Committee and we sent you the information on what we, as a Committee, expect from you. Then we waited for you to send documents to the Committee. In our utmost disappointment, the documents were received at 22:00 last night and there were 400 pages. I think you expected us to read 400 pages from last night, but the documents were received by the administrative staff, not by us, the public representatives. The evidence leader was supposed to go through your documents when they come, but because your documents came yesterday evening and you are going to appear in the Committee today, we could not read a single page of what you have sent to us.

Therefore, this Committee has taken a decision. You were given a ticket to fly from wherever to Cape Town. We were expecting that you would give us the documents in advance, but you didn’t do that. The Committee is expected to return you after we engaged with you, but we will not be able to engage with you today because your documents have only just arrived. Those documents need to go to Adv Vanara to go through and see what information is necessary for the Committee to prepare for the inquiry. We could not go through the documents because your documents arrived at 11 o’clock last night.

There is a Committee here in Parliament that looks at the budget of Parliament and makes Parliament accountable for the money it uses. We are not like Eskom where if we feel it is necessary for us to give our friends a certain amount we just give our friends that amount, and don’t take any responsibility. That is not us. We are public representatives. Whatever we do in Parliament, we account to the public of South Africa.

We are going to take you back from where we have taken you, but I want to put it on record that we are still going to call you to come in front of this Committee. We are going to deal with your documents and, with all the negative statements that are out there about you and about Eskom that you were working for. We are not going to continue the engagement with you. You are going to take full responsibility for coming back to Parliament when Parliament asks you to come back. We are going to give you another date when you should come to the Committee and account for the monies spent in Eskom.

We, therefore, take the opportunity to tell you that today we have not prepared anything because you made us not to prepare for you. We are therefore not to continue with you today. We are responsible people. We are accountable to the public. If we can’t read the 400 pages, we will not do justice to this Committee. I am guided by the Committee to tell you that we will not engage with you today. I am going to give over to the Committee for them to comment on what I have said.

I want you to register our disappointment. It is six months since July and you have seemed to undermine the work of this Committee. This is a Committee of Parliament and Parliament is a senior office of the land. This Committee is very serious about doing its work and we are doing our work diligently, regardless of what other people think of us. We know that we are accountable to the people of South Africa and to our organisations that have sent us here.

Dr Luyenge: Thank you, Chairperson. In fully concurring with you, I want to highlight the following to Mr Singh and to everyone else looking upon Parliament to do its work in accordance with the Constitution. We are here for a particular cause: to respond to a hypothetical view that says, in South Africa, there is deliberate looting of state resources and Eskom is one of those entities that is leading it. That is the perception outside here. It is upon us as an extension of Parliament that we must represent the communities that we are representing here.

You must not look at the numbers here. We are Parliament in the true sense. But if the past experience about Parliament is of that body that is simply there for formalities, gone are those times. We have a constitutional obligation to hold each and every citizen of the country, including the Executive, to account. It is so amazing, as the Chairperson has just reflected, that we have interacted with you, Mr Singh, from July, and, on the eve of us engaging with you, then you approach us with a mountain of documents.

In the past, maybe it was just a formality, just take these documents to Parliament, they won’t go through them. We won’t give justice to the cause so, Chairperson, I agree with you that we need to go through these documents. Thanks, Mr Singh, we are now in possession of the documents and can go through them for information that we want. What is important for us is to engage, to deliberate, to deal with the issues because the office of the CFO is a very strategic one in the country because of the global standing of South Africa. In Eskom, the CFO’s office is the one that counts most, so we need to be factual and we need to have time, but we don’t have the luxury of time.

Mr Swart: Chair, I want to endorse your sentiments. Mr Singh features prominently in this inquiry, in documentation, and we have been looking forward to engaging with him. His lawyers have been here continuously. There have been many attempts to undermine this committee, Chair. We’ve seen death threats, we’ve seen attempts at bribery, MPs have been intimidated, and this is another example of undermining this Committee. To give us documents last night is unacceptable and we as Parliament need to express our condemnation of that. It is very clearly a delaying tactic and an attempt to frustrate us from doing our work. But we are resolute, and determined, to get to the bottom and so, regrettably, we won’t be able to continue today because of that documentation. We are resolute and determined to continue our oversight function and we look forward to engaging with Mr Singh again in the near future when he will have an opportunity to give his side of the story, his version, and we will, of course, have an opportunity to engage him as to his role in the various allegations of state capture. I support your sentiments, entirely, and that regrettably, we won’t be able to continue today.

Ms Mazzone: I, for one, as a parliamentarian, do not like it when Parliament is held in contempt. And this kind of delaying tactic, let me tell you, is not wise, nor is it clever. It’s silly and unnecessary and when the whole country has its eyes on this Committee, it is actually shameful for any South African to hold this Parliament in contempt as we are being held at the moment. This Committee has done nothing but act in good faith. We have acted in good faith over and over and over again and the kind of mala fide shown today is not acceptable. Chair, Mr Swart made a very good point that Mr Singh’s legal team has been in the hearings day-in and day-out, from hour one to the last hour. This is unacceptable behaviour and it simply goes to illustrate exactly why we’re sitting in this Committee. We will not be stopped; we will not be halted; we will not take this as a clever legal move; we take it in exactly the light it was given to us. Thank you for my December reading, I’ll read it, not once, twice, three times, four times and we’ll see you in January and when we see you in January, we’ll engage with you the way we should have engaged with you today. But know, let shame be upon you for doing this to this Parliament.

Mr Dlamini: Thanks, Chair. Mine is simple because I think Mr Singh and his buddies decided to undermine this Parliament with his R600 million, so he must go and tell them, we are not scared of them, but we will go through them, one by one. We are going to start with him. These documents that he brought to us, you must just know that when you meet up with us, you’re going to give us answers. You can pass the message on to your buddies as well, all of them that are on the list, that they must come to this inquiry. It doesn’t matter where they get their power that they think they can undermine Parliament. It has come to an end. So, we are going to see you and you are going to answer all the questions and anything we want clarity on. We are not your friends. When you need to come to Parliament, come on time and do exactly what is expected of you. It is a simple process. You must not do that to us.

Mr N Singh (IFP): In fairness to one Narend Singh, whom you all call Honourable, please, whenever you refer to Mr Singh, you must say Mr Anoj Singh. I don’t want confusion out there in the public that the Mr Singh that you’re referring to is me. We are not family. The first time that I met Mr Anoj Singh was when he appeared before the Public Enterprises Committee. Unlike our African brothers and sisters, where if you are a Mkhize, all the Mkhize’s are related to you and likewise all Buthelezi are related, but we are not related. We are not relatives, so I am declaring that upfront.

I must say when we had a discussion this morning, I was extremely disappointed to learn that the documents had arrived at midnight last night. You know, Chair, and I know, that all the Committee members here have really been applying themselves, impartially, independently and ensuring that the audi alteram partem rule is respected. We give everybody a right to be heard, and to spring this upon us now is really not fair to us. I hope that Mr Anoj Singh and his legal team take note of that. We don’t take too kindly to the fact that this has happened and if there are any more documents that are going to be supplied from your side, can you kindly arrange with the Secretariat that they come in good time so that when we have this engagement with yourself, we are well prepared. I support the decision of the Committee.

The Chairperson: Thank you Honourable Members. Mr Anoj Singh is released. Thank you very much for coming.