Eskom Inquiry: Lynne Brown

Public Enterprises

22 November 2017

Chairperson: Ms D Rantho (ANC)

Eskom Inquiry: Minister Lynne Brown 2
Eskom Inquiry: Minister Lynne Brown 1
Eskom Inquiry: Minister Lynne Brown 3

Minister of Public Enterprises Lynne Brown statement

Meeting Summary

Ms Lynne Brown, Minister of Public Enterprises, attended the parliamentary inquiry and delivered a statement under oath about the capture of state-owned enterprises (SOEs). She said that her appearance before the parliamentary inquiry went against the advice of her legal advisers who had advised her to decline the invitation to give evidence. She said that the legal advice was based on the view that the Committee’s process "was unfair, inappropriately accusatorial, and that her appearance would only serve to legitimise a predetermined interim report containing a rehash of untested information designed to embarrass particular positions. However, she did not take that legal advice because the Constitution states that members of the executive should account to Parliament. She emphasised that her interest was to ensure a fair and just process and noted that no member had insisted on this.

In her statement, Minister Brown rejected the allegation of former Eskom board chairperson, Mr Zola Tsotsi, that she had consulted others about her executive functions — not Tony Gupta, Gupta associate Salim Essa nor anyone else. On board appointments, she said that she reported to Cabinet and Cabinet decided who served on boards. She noted that recommendations to establish board sub-committees came to her from the board, in writing. The board sent her a letter with the names of the people for the sub-committees. Usually, she approved them because the board knew their members better than she did.

Minister Brown said she was astonished that Mr Tsotsi found it appropriate to attend a meeting with the President without conferring with her before the meeting, and not sharing with her the outcome of the engagement with the President. In her statement, Minister Brown said that the inquiry was using the trouble they were in to achieve short-term political and business objectives regardless of cost to the company and country and that cleaning up SOEs was of secondary importance. There should rather be proper investigations by the law enforcement agencies. Minister Brown said the best thing for the country was to have a comprehensive investigation. The establishment of a crack investigating team by the National Prosecuting Authority was heartening and her request for a Special Investigating Unit probe into Eskom was awaiting approval by the President. Besides, the commission of inquiry into state capture was imminent. She said that it felt as if Eskom had been beaten to the ground and was being pinned down by the weight of untested allegations, while being kicked to death. In her view, what was desperately needed was for the wheels of justice to be sped up, and noted that a thoroughly toxic environment had been created at the worst possible time for the country.

Minister Brown was asked to respond point by point to allegations by other witnesses who had given evidence at the inquiry.

Members felt Minister Brown was not assisting the Committee since she was denying all allegations levelled against her by other witnesses. Her letters to the Committee went against the grain of her claim that she wanted to sort out the rot at Eskom. Members felt that all names that were mentioned throughout the inquiry process should feel free to come and give their testimony. Members suggested that the Committee ought to invite the Gupta brothers, Duduzane Zuma, Salim Essa and Eric Wood and should there be any resistance to making an appearance they should be subpoenaed.

Meeting report

The Chairperson welcomed the Minister. I would like to inform Members that tomorrow we were supposed to meet with the Deputy Minister. The Deputy Minister will not be with us tomorrow. I will say that we owe the Deputy Minister some documentation he asked for. He has to go through that and we will give him some time to appear in front of us, as a Committee.

Mr S Swart (ACDP): On behalf of the Committee I would like to propose that we subpoena the following persons to appear before the Committee, next week.

Chairperson: I thought we are dealing with the Deputy Minister. So, do we agree as a Committee?

Mr F Shivambu (EFF): I support the proposal that the Deputy Minister should be given some time and should appear before the Committee, next week Tuesday. We should reject with contempt the request of three weeks to appear as this is not a reasonable time. We are going to give him up until next Wednesday to appear before the Committee. The parliamentarian power of summoning or subpoena-ing should be utilised. He must give evidence before the Committee.

Mr M Gungubele (ANC) agreed.

The Chairperson asked if Members agreed with the proposal.

Mr Gungubele: Yes.

Ms L Mnganga-Gcabashe: I think we should stick with Wednesday as we have a long time before the sitting at 3pm. It is for Members to decide.

Chairperson: That is what has been suggested. Mr Shivambu corrected himself and said the day of Wednesday.

Mr Gungubele: If we are agreed on this, I want to take this opportunity to say that a number of people have had their name implicated in one way or another. I think the Chairperson will make more pronouncements on that. I want to focus on the fact that the Guptas family has been cited several times. They should be invited to clarify themselves in the areas they were implicated in.

Mr Swart: I would like to move with the motion that the Committee subpoenas next week the following persons: Tony Gupta, Ajay Gupta, Atul Gupta, Duduzane Zuma, Salim Essa and Eric Wood.

Dr Z Luyenge (ANC): My submission is that an invitation should be extended to these other individuals. We do not however start with a summons. We cannot be in the fighting mood the first time. Rather, a person should be summoned if he/she undermines the normal process.

Mr E Marias (DA): I support the proposal that if the person does not react to the first invitation, then we go with the subpoena.

Mr T Rawula (EFF): I also support that we write to them first before we subpoena them. I think also, amongst those names, the Minister of Finance should be added. He should be invited on the basis of the same resolution. An invitation should be extended to all those people whose name has been mentioned. If those people are willing to make an application to appear before the Committee, they should be given an opportunity to be heard on the basis of the resolution of this Committee that those people who were mentioned may come and state their story. They should make application and the Committee should consider their applications.

Mr Shivambu: We should invite Ms Dudu Myeni who was prominently mentioned. She should come and give her side of the story. The likelihood is that she is going to deny or even reject the process under review. Let’s give her an opportunity to confirm whether the meeting with Thalente, Zola and her lawyer did occur in Durban. This will help us to clear up these things and to give them context. Ms Dudu Myeni should be part of those we intend to invite and of course we make a public call that if there is any member of the public who would like to testify, to write to the Committee so they can come and give their side of story. We cannot reach a conclusion without appraising all the evidence so as to give a clear and balanced picture of what is happening.

Mr Marais seconded.

Chairperson: Let me wrap up by saying that we have mentioned seven people that must come; that they must not be subpoenaed. Instead, they must be invited to appear before the Committee and if there is any resistance, then they will be subpoenaed. I want us to formally agree as a Committee that anyone whose name had been mentioned by a witness to the inquiry, that person has a right to write to the Committee and be given a chance to be heard by the Committee. Anyone who wants to come and clear her name or who wants to come and add on his or her name from what has come out of testimony is welcome. We have opened a window for those people to come forward.

Mr N Singh (IFP): I trust the list of names that my colleagues have given. It is an exhaustive list and serves as a point of departure for individuals needing to be invited. I feel – as I was listening to evidence this morning – that the person needing to come and explain himself here – because he is implicated – is President Zuma. We heard evidence that there were meetings where he was involved in. I think he should be given an opportunity to exonerate himself. This Committee needs to give him that opportunity.

Chairperson: Thank you, Members. Today we are meeting the Minister of Public Enterprises, Ms Lynne Brown. The Minister is going to speak under oath. So I want the oath to be read to the Minister.

Mr Shivambu: We cannot leave it on a loose end. I wanted to second the proposal that – because Mr Zola Tsotsi said that President Jacob Zuma made calls about the suspension of Eskom employees and even called a meeting in which he participated – we, perhaps, should give him a platform to clarify himself. He was warned of objecting to judicial review. Before it gets there, let’s allow him to clarify himself. It must be clear whether we agreed on this or not. I think we should take a resolution that President Zuma should appear before the Committee and clarify himself and his rule in running administrative issues of, particularly, Eskom.

Chairperson: Thank you, Shivambu. Let me continue reading the oath to the Minister.

Witness: Lynne Brown
The Chairperson read the oath to the witness. The witness took the oath. After the oath taken, the Chairperson said that she should sign the documents in front of her and those documents would be forwarded to her.

Adv Vanara: The Minister has prepared the written submission and the submission had been distributed. In our discussion, we agreed that she will be given an opportunity to address the Committee. When she is done, we will engage with her.

Minister Brown: Chairperson, Members of the Committee, Evidence leader, Ladies and gentlemen, I have brought with the notes, the documents requested, that is the board appointments, the database of the board members from 2014 through 2016. I have also given you a written submission that would include my response and I will be speaking from my responses – it is the same with what you have in your files. Before I make my statement, I would like to respond to Mr Zola Tsotsi's accusations over an hour or two ago. I have forgotten to introduce to you, Chair, Adv Leballo, who sits next to me. I am sorry about that.

Chairperson: Welcome Adv Leballo.

Minister Brown: Let me re-start. Before beginning my prepared statement I would like to respond to Mr Zola Tsotsi's accusations of an hour or two ago. I have never consulted with anyone on my executive functions. Not Tony Gupta or Salim Essa or anyone else. Why would I hand over my functions to anyone else? In as far as board appointments are concerned, I report to Cabinet, and Cabinet decides who serves on boards. Recommendations to establish board sub committees come to me from the boards in writing and I generally approve them as they know their members better than I do. In addition, I am astonished that Mr Tsotsi found it appropriate to attend a meeting with the President without conferring with me before the meeting nor bothering to share with me the outcomes of his engagement with the President. Thank you, Chair.

The Minister read out her statement to the Committee (see document). When she was at page 4, she was interrupted by the Chairperson.

Chairperson: Can you hold on, Minister. It seemingly appears that Members want to raise something.

Mr Gungubele: I have a document in front me which purports to come from the Minister. I am trying to follow her and I cannot find the connection. I am not sure if she is reading the summary. If it is the summary, that is where the challenge is.

Minister Brown: I have not yet distributed my statement because it is the summary of the document I have given you. I was requested by the Chairperson to give you a set of documents. Those documents include board appointments and CEO appointments. So you have two documents from me.

Dr Luyenge: I think, Chairperson, the methods we are using are not new. People are actually reading their statements but we have copies of such. Now we have the main document from which the summary of the Minister is dealing with was drawn. This disorganises us because we cannot follow the Minister appropriately. It would have been better if the Minister was reading from the main document. She has a completely new document.

Mr P Gordhan (ANC): Can the Minister allow us to make a copy of her document now? Is there any objection to that? Unless you refer to the paragraph in the document we have where we can, for example, find the phrase in our document "Eskom was kicked to death".

Mr Rawula: I wanted to suggest the same. I think the document the Minister is reading is more detailed than this one. We can get that one, please.

Mr Gugubele: I want to emphasise that what is critical is that what Minister is reading in particular are assertions which do not appear in the main document. We need to interact with those assertions. These assertions have their own weight and we do not want to rely on something else.

Mr Gordhan: I suggest that a copy of the statement should be made and distributed.

Ms Brown: I want to respond. I have watched the interactions in these couple of weeks. I attest that they were not the same as the affidavits that I have received. However, I am very happy to give you a copy of my notes.

Chairperson: Can someone get notes from the Minister and make copies of them.

Mr Shivambu: The Minister must give us a copy. Mr Molefe and Mr Tsotsi gave us copies. This inquiry has been consistent with how it dealt with witnesses. We should not imagine things.

Chairperson: I want to make something clear. We received a statement from every witness. We do not understand how someone could be reading a statement that Members do not have a copy of. Hence we will not be able to engage with the statement. How long would it take to print the statement? Are you willing to wait for copies?

Members: Yes.

Chairperson: The meeting is adjourned until the copies are made and distributed. Please note that the Minister is under oath and is not allowed to talk to any journalist until the interview process is concluded.

[Meeting resumes]

The Chairperson asked the Minister to start from the beginning so that everyone could follow.

The Minister: I am sorry that I did not submit my notes because I did not think that they will matter as I have made a written submission. Let me get on with my reason for being here today, Chair. There is overwhelming circumstantial evidence of malfeasance at some of our state-owned companies.

The Minister read out her statement to the Committee (see document).

Chairperson: Thank you Minister, we will go then to the Evidence Leader to lead us.

Adv Vanara: Thank you, Minister. Let us start with the relationship between the shareholder representative, yourself, and the board. That relationship is premised on trust. Does the Minister agree with me?

Minister: I agree with you.

Adv Vanara: It would appear that the Minister correctly relied on this trust relation between her and Eskom for some time, until some people proved that they were not trustworthy. McKinsey has testified before the Committee that Eskom lied to them that they have obtained Treasury’s approval. They entered into agreement. They performed work. They were paid. They were prepared to pay billions back simply because Eskom lied to them. With your experience of Eskom, would you state the McKinsey statement that Eskom lied to them was far-fetched?

Minister Brown: I would not know if it was or if it was fabricated or not. But I would say that there was a high level of secrecy that a company, which is very difficult to get through to.

AdvVanara: You have also been put into very compromising position by Eskom, by those questions put to you by your colleagues in the National Assembly on the relationship between you and Eskom on one hand and you and Trillian on the other. It must put you in very compromising position because of telling you inaccurate information that could have exposed criminals – Is this what the understanding of the Minister is?

Minister Brown: Absolutely. I received that information. I was before the Public Protector and before the Committee – because I had received that information. 

AdvVanara: When you tried to engage with Eskom as shareholder on the matter that concerned the nation on the re-appointment of Mr Brian Molefe. When you were asking questions of Eskom, they were relying on legal opinion, and when you were sourcing the legal opinion it was not forthcoming. It does not add up. It goes further that the inter-ministerial committee (IMC); the shareholder's representative and cabinet decided to add more numbers to try and look into this particular transaction that concerned the nation. Is that justifiably so? The IMC was deprived of this legal opinion. What does this tell you about Eskom?

Minister Brown: It was that they would not release the legal opinion. And at the time when I spoke to the then board chairperson about the legal opinion, he said that the legal advisor did not trust my department. And eventually they could come and see this matter in the legal advisor's office. She was not available for my legal department to go and see her. There have been many so many kind of issues with Eskom and we raised this with Eskom consistently. Of course this had a negative effect in the public space - on the public generally. It was something we struggle with Eskom. That was the reason I felt that there should be a deep dive into areas of Eskom so that they start lifting out of that kind of culture in the organisation.

Adv Vanara: My understanding is you are in court about the dismissal of Mr Brian Molefe. I understand that there is another case where there were issues of tension that were being challenged. I get a sense that you have been following the inquiry proceedings when you got an opportunity. You might have seen the interaction I had last night with Mr Molefe around his stepping down. The perspective or your views around his departure is that he resigned.

Minister Brown: Yes, sir.

Adv Vanara: If it helps; it appears to me that we have agreed in that respect that Mr Molefe resigned from Eskom and that his resignation had been accepted not only by the board but also yourself.

Minister Brown: When I issued the statement to say so.

Adv Vanara: Then, if he resigned, there could not had been the basis to come back to Eskom. Is that your understanding?

Minister Brown: Yes, that is my understanding.

Adv Vanara: On the pension that he received – he had conceded last night that he was entitled to the pension and of course, naturally, we expect that the money would be paid back. I want to get to the board appointment. At Eskom, there was Mr Pamensky and at Transnet, there is Mr Shane – a non-executive member – who was in the disposal and acquisition committee. Do you know him?

Minister Brown: Yes.

Adv Vanara: Let's start with Mr Pamensky – how did you get to – I know how you have appointed non-executive members – but I want to get to him specifically.

Minister Brown: He was on the short list at the end of process. Remember that we put out an advert, people applied, there was a nomination process. It went through verification processes, and those who qualified went to a shortlist – eventually dealing with the conflict interest. My office raised an issue of conflict of interest with a particular company – I do not remember that company – I think it was Blue something. That company had worked with Eskom. That was at the beginning. The decision was that he should choose a company or choose to recuse himself whenever that issue comes up. He chose to recuse himself. The second issue is when he became a member of the Eskom board. It was discovered that he was also on Oakbay. When this was discovered, there was a conversation to get to the bottom of this. I then asked him to resign or to step down. Mr Pamensky decided to step down. This took a while because he felt that he could recuse himself, but he eventually stepped down. I do not remember the date he stepped down. It was the same time that I wrote to members to declare the conflict of interest. I do write to members annually to declare their conflicts of interest. I now do it bi-annually. Mr Pamensky declared his interest in Oakbay after he joined the Eskom board. He has actually resigned from the board. There were certain allegations that were in connection with the Gupta family. I spoke to two other members of the board. There was another member whose husband was linked to another company but his wife said that he did not have a company. The way I tried to solve the problem was to declare a conflict of interest.

Adv Vanara: The non-executive you are talking about might be Viroshini Naidoo?

Minister Brown: No, Ms Klein.

Adv Vanara: It appears – as a part of this process – that you need to assist us to fix things. I am glad that I can pick from your response that the second experience suggests that some processes are not adequate enough. That you are starting working towards [fixing] them. The reputation of Eskom: there are things that you can attest to – as others have attested to. Let’s go back to the suspension of four executives. There was a meeting on 11 March when you joined the board and the discussion was about an investigation or inquiry to be instituted, which could not take long, which you dealt with in your notes. There is a second element: Two non-executive directors have testified including Mr Tsotsi about the suspension of the executives. What are you told in the meeting about investigations and suspensions?

Minister Brown: It was Wednesday afternoon. I remember the day very well. I just came out of the War Room. We were in a very complex space with Eskom. There was a load shedding. We just came out of the War Room and there was again no adequate information. We were not sure whether we were going to see the next day, the next couple of days. In fact, the issue was that it was very clear that I felt that the board had to revive Eskom. I went to Eskom that day and I did not call a special meeting; rather I attended the meeting they had. When I got to the meeting, there were two matters – the item of suspension was on agenda. It was concerned with four people being suspended. Yes, I wanted the company to be stable, but what I did want to understand was the reason we are spending a lot of money on primary energy. We spend a billion a month on diesel. There was no plan for maintenance. The decision was taken in 2008 that the lights should be kept on irrespective for the World Cup. There was no space to do maintenance. Financially, in the December 2014, I was advised by the CEO that by January 2015, there would be no money to pay 45 000 workers that work for Eskom. So Eskom was in a difficult situation and I wanted to dive into Eskom. I wanted that is where the Dentons report came from – because you have got to understand what the problems were and how to get out of these problems. And the board had taken the direction to deal with this. We had the War Room but they turned into a single War Room. The responsibility still rests on me as shareholder representative and them as the board. That is what they had to do. At that meeting, I think the chair of the board told me that he was going to suspend four members. I said, look, you do what you need to do; but what I want is the sustainability of the company. How are we going to create the sustainability of the company and do what we have to do? I left. I was not there for a long time. Probably an hour or half an hour. I was there to speak to the board. Actually, my department pushed me strongly that I had to go and see the board and address the full board. The board was not part of the War Room. They did not know what was happening in a War Room. I was actually going to brief the board on what was happening in the War Room. That is what I did.

Adv Vanara: It appears that, in this meeting, the board members were not opposed to investigation.

Minister Brown: Indeed, they were not opposed to investigation. In fact, the board members were having questions at that time.

Adv Vanara: On that particular day, you were just concerned with the suspension. The decision was taken when all four members were in the board meeting. The board explained to you its intention to suspend, is that so?

Minister Brown: It is so.

Adv Vanara: Were you furnished with names of executives?
Minister Brown: I could imagine that they did furnish me with four names.

Adv Vanara: Mr Tsotsi testified earlier on in the day. In that meeting there were three executives that were to be suspended: Matshela Koko, Matona and Marakane. It was actually government people in subcommittee meetings, who decided when you had already left. According to Mr Tsotsi you did not spend time at the board meeting. Are the people from government in board sub-committees? Dr Ngubane raised the name of Ms Tsholofelo Molefe to add to the three names. There are questions about this. Dr Ngubane indicated that he proposed that the name of Ms Molefe be added to the list. 

Minister Brown: I did not propose anyone’s name. I came into the meeting with officials and walked out with officials.

Adv Vanara: And that, upon hearing this, he made a telephone call to you. That is Mr Tsotsi. He wanted to understand why the name of Ms Molefe was added because she was not on the list. But, from a meeting in Durban, he insisted that the name was not on the list. What would be your response?

Minister Brown: I must say that I do not remember – or ever put a name on the list. I did not add the name of Molefe on the list. My view was they should have a deep diving into the company and that they should see the best way to take the company forward and to create financial sustainability as far as the regular maintenance was maintained.

Adv Vanara: At the beginning, you challenged Mr Zola Tsotsi's testimony – you said that you would like to respond to his accusation. You challenged that you consulted with anyone on your executive functions – not Tony Gupta, Salim Essa or anyone else. For appointments, you report to cabinet and cabinet decides who serves on the board. You also found it astonishing that Mr Tsotsi attended a meeting with the President without consulting with you before the meeting and without bothering to share with you the outcome of the meeting or his engagement with the President. This morning, I had to clarify these issues with Mr Tsotsi. Some of them and not all. What is missing from your response is that you had a telephone conversation with him and you insisted that the name Molefe should be added to the list. If we have to believe you that indeed you insisted that Molefe should be added on the list – why are you challenging that in your statement?

Minister Brown: I have to be frank with you that I did not actually hear Zola Tsotsi statement. I was in a meeting and my staff said oh something had happened. They went out to look what was happening. That is the only thing that we saw. I did not see anything or say that the name Molefe should be added on the list. So that was the only matter that was raised. I mean, I thought that it was a nonsense. And we issued a statement. We made a decision whereby a statement was issued. That was the only thing that I have heard. I was not listening.

Adv Vanara: What is your response to this – did you or did you not give the name of Tsholofelo to Dr Ngubane to add to the list.

Minister Brown: I did not.

Adv Vanara: Was Mr Tsotsi lying?

Minister Brown: In fact I am saying that I did not and he said I did. I do not think I am lying.

Adv Vanara: When did you know that the four names would be suspended – was it prior to announcement or after announcement?

Minister Brown: I remember that it was Mr Tsotsi who called late that night after the meeting to tell me that was the decision they had taken. And that they were going to make announcement the following day.

Adv Vanara: At least we know that that evening Mr Tsotsi called you about people to be suspended.

Minister Brown: I can tell you that that was when I knew about the people to be suspended.

Adv Vanara: I have asked you earlier on whether you had a meeting in which you were told about the people to be suspended and you said that they gave the names.

Minister Brown: I am not absolutely sure whether they gave me the names but I know that they were suspending management.

AdvVanara: And those four: there were the financial director and other three executive members. In your statement you alluded to negative publicity around Eskom. When you found out executive directors were to be suspended, why did you not feel concerned? 

Minister Brown: I was concerned that four were to be suspended. I was also concerned about the company given the difficulties it was facing. If this was the way to make a company fully operational then yes I would like to see them doing what could be done to make the company operational. I must tell you that out of these issues – I knew this was discussed in the boardroom at times. They had a lot of information that was not clear. It was not accurate. It was information coming from Eskom. Whatever it took to bring the company to stability that was what I wanted. I wanted them to understand that they had to what they had to do at ease. That was one thing. The second thing was that they had to suspend these executives – whatever it took – I wanted the company to be stable. That was the most important at that time.

Adv Vanara: My last question is not necessarily about the investigation, rather about the suspension of these four men. What were the reasons given to you, if any, for suspension of these executive people.

Minister Brown: Some of the reasons I have already mentioned them. Information was not forthcoming. Information was not accurate. There was no plan that was getting the company out of this mess. There was no plan to ensure the financial sustainability of Eskom. It was a time that everyone was working hard toward the R23 billion bailout. We had three governing structures at Eskom – we had IMC on energy, which was chaired by me and Finance Minister and the Energy Minister. To bail out a company that had no plan for the future did not make sense. Those were the reasons that we were given at the time.

Adv Vanara: The people who take the decision to suspend – you did not take the decision – you did say that they had to do what they had to do. No one has testified that you took a decision for the people to be suspended. The people who were suspended – three of them – are on record: Mr Tsotsi, Ms Klein and Naidoo – that there was no reason for suspension of executives. All that had to be done was to proceed with an investigation. But to remove them from the company so they would not interfere with the investigation?

Minister Brown: I remember that they wanted to remove them so that they could proceed with investigation.

Adv Vanara: Was there evidence of wrongdoing, particularly, the executive director ? Mr Tsotsi was here this morning and had testified how he was bitterly ready to fight the suspension of the financial director because of the massive response from the market and investors. He testified that his reservation or concerns were later realised when he had to field 52 inquiries. Does this not bother you, Minister?

What happened after the four were suspended, among other things, Eskom was downgraded. There were three or four reasons that were given for the downgrading. And one main reason was the suspension of management. Mr Tsotsi anticipated that the removal of executives would bring all these problems. Did you not foresee this?

Minister Brown: It was not the suspension of the financial director, it was actually the suspension of all four that brought the Eskom downgrade. That was actually the issue.

Adv Vanara: Did you not foresee the downgrade coming? Because Mr Tsotsi said that you should have foreseen the downgrading coming.

Minister Brown: We foresaw the downgrading coming because the company had facing various concerns. It needed a bail out. It had no visible plan. There were a whole range of concerns. Eskom was in the media that it was about to get a downgrade. What I did not realise what that the main reason of degrading was the suspension.

Adv Vanara: Two of these you did appoint, the Financial Director (FD) and Group Chief Executive.

Minister Brown: I did appoint the Chief Executive and FD.

Adv Vanara: Although you did not suspend them, you could have understood the consequences of the suspensions: Don’t you think you could have done better?

Minister Brown: I do not think you realise that we were in a very, very, very difficult position – I think am not explaining it enough. In fact, we were on stage three load shedding and if we are on stage four, there would be a black out. The areas like Gauteng, KZN or Cape Town – they would take two weeks to be revived. After 14 hours of blackout, you cannot revive the economy again. I was panic stricken. I felt panicky about Eskom at the time because of the crisis that were facing. I remember stating in the House that there would be load shedding for three years. I advised Members to go and buy generators, solar lights and so on. Prepare for load shedding because we were not prepared to alleviate the backlog in maintenance for at least three years. If it meant that management should be removed for the betterment of Eskom, then it was appropriate to do so because the country was being affected by the load shedding.

The whole country was affected by the load shedding. The economy got such a knock. The number that was given at that time was R400 million per day for load shedding. I needed a solution to this crisis. In some respect, I am always sad when people have to go; but they were suspended and they were not fired. I think one of them decided to come back and take the package after discussion with Eskom. I do not want to see people going. I do not want to see young black professionals being moved aside. I should rather tell you that there was a crisis in the country and that was why I wanted them to go. Please understand it content wise. In fact, I gave three months to investigators to go and find what was the problem so that a solution that could be found. In Eskom, the investigation could not be done within three months. However, I wanted to know at least what was going on. The main intention was not about the suspension, rather it was the 53 million population of this country.

Adv Vanara: I understand that the focus was not merely the suspension. The problem that I have is the consequences as the result of suspension, not for the individuals, but for the company. So there was not a better way to deal with these four people, for example, bring them on the board and try to engage and discuss with them. I do not think that the people would have started to run to the CCMA or court as Matona did.

Minister Brown: I spoke to them very often because the board met on a weekly basis. Every week when I saw them I raised these issues with them. There was no plan for Eskom at the time. If there was a plan I would have felt otherwise. The matter could have been resolved in another way. One of the people suspended, Mr Koko, came back and took the package. They did not trust the company. I am sorry that it happened that way and losing three young professionals. This should not be taken lightly especially in the last ten years. We cannot afford to see professionals on the street.

Adv Vanara: Are you stating that you are sorry – did I hear you correctly?

Minister Brown: I am sorry that young professionals lost their jobs. I do think that immediately after that the board proposed somebody– I am not trying to move away from your topic, I will come back to it – I think it was three months after the load shedding was started to be planned. There was a better cohesion in the company and so forth. I am sorry that young people were suspended. One person came back and the others did not come back.

Adv Vanara: In December 2015, you changed your board – can you share with the Committee what happened during that period? This is because my understanding was that members of the board were rotated or that they were changed around during the AGM.

Minister Brown: Actually no, it was not true. In fact I became a Minister in May 2014. I held the meeting in July 2014. I approved the resolution of appointment of non-executives. If you remember, it was in a period the decision has been made on Koeberg. It was a contract that had been in a pipeline for three years. There was a lot of conflict on the board, at the time. Two non-executive members, Ms Luthuli and Ms Masithela, resigned in October 2014. We do the review process with the board; that is internal review; that is the board reviewing itself. There was also an external review of the board. And we make decisions based on that.

On 11 September, Cabinet approved the package of R23 billion, the package that I have spoken about earlier. The package was to strengthen Eskom and to make it efficient and not to remain a growing concern. That is the reason why R23 billion was allocated to Eskom. One of the critical concerns as it relates to the capacity of leadership at Eskom is the board and executive. As shareholder representative, I actually have a prerogative power, in consultation with the cabinet, to appoint or re-appoint or rotate non-executive directors. Accordingly, I rotated nine of the board members and kept two as non-executive members for the purpose of continuity. That was in December. Those I kept are Mr Tsotsi and Ms Mabude. I kept those two and I rotated the rest. There was a conflict in the board at the time. There was a lot of conflict in the public space. In fact, one of the media houses wrote that I had influenced the change of the company who eventually won the contract. A few months later, the court ruled on that matter. The conflict in the board had been there for ten years.

Adv Vanara: The Dentons report – Eskom seems not to be coming forward with the unedited version. This is the report that you have been patiently waiting for. This is the report that could have provided possible solutions to what has been giving the Minister sleepless nights. Are you concerned that Eskom does not want to share the report with the public?

Minister Brown: The report was a draft prior to that. I do not see the drafts. I do receive the final report. I got a report, and I mentioned it in my statement somewhere, on the 7 September 2016, if not 2015. The issues in the Dentons report largely related to primary cost of energy and the build programme. Remember that we were behind schedule and we had cost overruns. Just the two issues had been resolved. I think Eskom spent R200 billion a year on diesel to fire the two plants in the Eastern Cape. They must be fired up so that they do not break down. That came out in the Dentons report. The second issue was the cost overruns. Eskom had cost overruns for years and years. In fact, the money being paid was enormous. The lagging behind of the build programme especially Medupi and Kusile. Six out of eight issues raised in the report had been resolved. What I do not know is that there are other drafts reports that mentioned peoples' name and so on. I do not get drafts. I do get final reports. I have made it clear when I was before the Portfolio Committee that Eskom should brief the Portfolio Committee on the Dentons report. The Portfolio Committee should arrange this.

Adv Vanara: I want to get to the reputation of Eskom. I should have raised this earlier and did not make a follow up. After the departure of Mr Molefe, you appointed Mr Koko as Acting Chief Executive. This is after he is having been exposed not to be an honest person on television. I understand that he had a kind of fight –through extensive discussion – with Ms Klein. Board members appear to have a number of issues against Mr Koko, when she recommended him to you. Some of these issues were disclosed. What do you think of the impact of the appointment on the reputation of Eskom? 

Minister Brown: The board said that they had two names to offer me for the position of Acting CE. I accepted the name of Koko, at the time. I do believe that somebody – even if exposed on TV or in the newspaper – must be charged and must be found guilty. They must be found guilty for whatever they do. Mr Koko was before the disciplinary hearing. Mr Koko did not want to be linked to Impulse International, the company in which his daughter is a member. I went to speak to Mr Koko so that an investigation could take place. As soon as we appointed a new board, I actually told the new board that they should deal with the issue of Mr Koko.

Adv Vanara: If I compare the manner in which these three or four executives were suspended and I look at the manner in which you want to give Mr Koko an opportunity to be investigated first and found to have done something – I understand that fully – it seems that the reputation or damage to the organisation does not matter.

Minister Brown: You are absolutely right. It has caused reputational damage to the company.

Adv Vanara: If it has damaged the reputation, are you prepared to consider that because you appointed him, you should take responsibility for the damage you caused to the company?

Minister Brown: Anyway, I have to take responsibility for any damage to the company. The company was in my portfolio. In fact, I do not have an option on that.

Adv Vanara: There is damage that you could have anticipated and thus prevented. There is damage that you do not have control over. There is damage that you could have taken steps to prevent.

Minister Brown: I think this is an actual debate you are having with me because in essence how would I know that someone accuses him. The board had two names – the one person is dealing with municipal debts – I do not want to shift anyone from municipal debts at that stage. This previous board actually took the decision to look into the municipal debts. That is actually the time we started to take the municipal debts seriously. It is the previous board that proposed the name of Mr Koko to me. I had to accept the name.

Adv Vanara: I have to give an opportunity to Members to interact with you. Going through this discussion of ours, it would appear in your statement that there were problems at Eskom that needed to be attended to. I differ with how these problems were addressed. On accountability and responsibility to Parliament, do you find your constitutional responsibility to account to Parliament as a source of irritation?

Minister Brown: Not at all. I think it is captured in the Constitution that the Executive will account to Parliament through the legislature. I do not feel irritation.

Adv Vanara: Knowing these challenges at Eskom – in some instances the Committee had taken the stance to inquire into them. What have you done to assist this Committee in unearthing and getting to the bottom of this? You are sitting with the Bowman’s report, the Dentons report, the company secretary report prepared for you on the issues that led to the suspension of Mr Koko and others?

Minister Brown: Are you asking me to submit these reports to Parliament? I would like to do so. 

Adv Vanara: You and Parliament seem to have, at least, identified the problem at Transnet and Denel. Through our discussion, it seems that you know what could be the problem that could be unearthed at Eskom. What have you done – as now you know your colleagues – to offer them assistance to get to the bottom of this?

Minister Brown: I am not sure how to answer your question. What have I done to be of the assistance to the Committee? What the Committee asked, I gave to it. In terms of what – I do not want to state the report of company secretary – I know that you have raised the report here – but the company secretary does not report to me. The board does. She cannot give a document directly to me. The board must do this. The board has to do an oversight before it comes to me. What I have done to get into Transnet and Eskom to see what was happening? The issue of procurement and contract management were raised but because they were in the public space, I have actually called for a Special Investigating Unit (SIU) investigation. These investigations are with Minister Masutha.

Adv Vanara: When you wrote to Parliament, which decided to conduct this inquiry, and you asked questions such as these: "What are the authenticity of emails that were in the public space. Could their veracity be relied on?" In what context were you asking this?

Minister Brown: If you do not mind I would like to find my letter. Which letter are you referring to?

Adv Vanara: It is your latter, date 13 October 2017.

Minister Brown: Okay.

Adv Vanara: In this letter you asked more than ten questions. I want you to focus on the question on the authenticity of emails.

Minister Brown: Yes, I did ask you these questions – what your question on my questions? I am very conscious that Parliament did not write back to me.

Adv Vanara: That is one of things that I have to correct. There was a letter dated 20 October 2017 responding to the 13th letter. Before we get here – we will get there, I am just asking – when you asked Parliament what is the authenticity of emails in the public space and what if the veracity of the emails could be relied on, what did you have in mind when you asked this question?

Minister Brown: Just the veracity of the emails because I have never seen the emails. I have heard, for example, that this happened with my Director General (DG) and I have seen in the newspapers. And I have seen that there has been 10 days when the emails were available. I could not click on them to get to read them. That is just the question that I had asked.

Adv Vanara: You see, what come across to me, I am glad that you raised the DG. It is your DG that comes out in these emails? He is somebody whose CV went through, by mistake, to Duduzane Zuma, before he got to be appointed as your DG. And you seem particularly interested in the authenticity of the emails. Is that not a defensive approach to this inquiry? 

Minister Brown: Not particularly.

Adv Vanara read out some of the questions in the Minister's letter: How the Committee proposes to deal with information that implicates her department and other witnesses? What about the fundamental right of implicating oneself? What informed these questions, Minister?

Minister Brown: I should say that everybody – I have 230 members in my department. I employ 230 professionals in my department. When one of the witnesses said that 230 employees were captured, I should also ask a question what informs that. That is what informs that question because it is almost implicating when the witness said that the whole department is captured. My 230 staff members who are professionals are captured. That is profane and I have to protect myself. If there is any proof of anything, I would be happy to deal with this myself.

Adv Vanara: In the midst of the problems, the Minister is not interested in assisting the process to get to the root of the problem. The Minister is interested in protecting the officials.

Minister Brown: No! I am interested in doing all of them. If I was not interested in getting to the root of the problem, I would not have – myself – instituted an investigation into Eskom and Transnet. I would have just left it because no one else was going to dive into Eskom and Transnet. And I think this is not something that happened now. This is the way the company has worked over years and years and years. They do business with each other; with officials of the company; there is a huge company that has a devolved supply chain management process that probably has mass kick-backs in it; and every day, there are whistle-blowers saying so and so. You have just to read about it. Sorry, there are lot of things that I have to deal with – whether it was looting in the company and trying to protect my staff – I had to do all of them. I have to try to protect myself. I have to try to fix what is happening in the company. I could not have called an investigation at all, if was not interested. I want to do all of them. I need to have a human capital that will actually help to provide oversight over these companies. But if you say there was any wrongdoing, I am happy to hear that wrongdoing. And if it is proven, I will deal with it myself.

Adv Vanara: So you will protect your officials from other investigations unless you do the investigation yourself. Is that what you are saying?

Minister Brown: Not at all. I have never said that. In fact, I am happy for whoever does the investigation: The police, the Hawks, the parliamentary committee or anyone. But fair chance; it must be a fair process. It must – for anybody in these 53 million people – be fair. That is how I feel about it.

Adv Vanara: The other question that I found a bit disturbing is when you ask what is the power of Parliament to subpoena and can it enforce a subpoena. What do you not want Parliament to get?

Minister Brown: It is the question. That is all. The Parliament – I am just asking the question.

Adv Vanara: So Parliament is busy trying to get to the bottom of the rot that you know about its existence and you do not know about the root and yet you are not willing to assist Parliament to get to the bottom of this. What you do is to put those questions to me that appear to be directed at concealing evidence from the inquiry. What is your take?

Minister Brown: True, I will use whatever means to ensure a just and fair hearing. If there is anything Parliament needs from me to help them with the investigation, they have to ask. Otherwise a just and fair hearing is what I have asked of Parliament.

Adv Vanara: What is the interface between the parliamentary inquiry and other investigations such as SIU and Public Protector? Is this the Minister who is trying to assist the Committee with something that concerns the entire country?

Minister Brown: Any question I am asking there is this: Will this or can this report help the other investigations?

Adv Vanara: Why are you concerned (i) about how Parliament gets to access the documents; (ii) why are you concerned that Parliament is going to use the Gupta leaks?; (iii) why are you concerned that Parliament is going to deal with what is before the court? (iv) where all these questions are coming from which seem not to assist your colleagues to get to the root of the problems of Eskom.

Minister Brown: I repeat that if there is any question or any document that my colleagues must have, they must advise what it is so that they can get it or they can get it from companies or they can get it whichever way they would like to get it. The issue is, what is of concern is that I can use any legal recourse that I can. I will do so. I will protect and I will use, eh, I want a fair process. I want to ensure that there is a fair process. And I have never thought that I can lie to you or lie to the Chairperson on any matter. The fact that the letters were leaked and went to the media and I am pried because of the consequences of them. I can use any powers given to me by our Constitution to direct any question at you as you have the same powers to direct any question to me.

Adv Vanara: I fully agree, mam, that you are entitled to raise the questions that you have raised. These questions are not in the context that suggest that you have raised the questions. The problem I have with the questions you raise is twofold: Your colleagues announce an inquiry into your portfolio and you seem to be aware that there were challenges and you are perhaps not going to like how they are going to do it; but the fact is that they have taken the decision. What is absent and what I see that you are not doing in all of this, I do not see a Minister who is happy that her colleagues are going to assist her to get to the bottom of the problem. What I see is the behaviour of a Minister who is very obstructionist because she is asking all these questions – as it appears – for the sake of asking questions and not for the sake of asking the Committee. That is why we have this engagement.

Minister Brown: I am very sorry you find me obstructionist. I must tell you that I feel that I am abused – I have a constitutional recourse available to me to ask you questions. I am sorry you find me obstructionist. In all three letters that I have written to you, these were letters asking clarity – no matter what the issues are. I am sorry to find them obstructionist. I did not intend to be obstructionist. As I indicated in all three letters, I said in all letters that I am willing to participate. I have expressed my willingness to participate and I again expressed my willingness. To be here today is an illustration that I want to participate. I am not intending to be an obstruction at all. I now think I am going to be an obstruction as I cannot sit here anymore…..yeah, I need a comfort break.

Chairperson: I thought of a comfort break after Adv Vanara’s questions but, if you cannot hold it now, you can go. Minister, you can go.

Adv Vanara: There are number of issues coming out of Mr Tsotsi's testimony that I want to clarify with you. Firstly it relates to the meeting he had at the President's residence. There is a statement by Mr Nicholas Lennell who was apparently at the meeting in Durban. At the end of meeting, the President made a promise that he will make contact with you about the discussions. Did the President call you in relation to an investigation which was later conducted by Dentons and the suspensions?

Minister Brown: I did not receive a call from President. I do not know when the meeting between Mr Tsotsi and President took place. The President did not call me about the Dentons report or about the suspension of four people. I don’t know when that meeting took place.

Adv Vanara: The meeting took place on 7 March 2015. I am not asking about the President asking about the Dentons Report. According to Mr Lennell, after they had a discussion with the President around the investigation and the suspension of executives, the President had given an undertaking that he will call you. The question is: Did the President call you?

Ms Brown: I said no. In fact, I do not know what the conversation was about. I think you should ask the President because I do not recall any of this.

Adv Vanara: I am asking because from the testimony there was an undertaking that you will be called. On your relationship as the shareholder's representative with Mr Tsotsi, the board chairperson, is relevant and significant for smooth working relations. I think you agree with me?

Ms Brown: It is so.

Adv Vanara: There is a testimony from Mr Tsotsi that the relationship between him and you was very difficult and that it was not what it should be and that you were not interested in talking to him. What is your response?

Minister Brown: I had to talk to Mr Tsotsi. He was a chair of the board. I think a breakdown came in the board when the board had no confidence in Mr Tsotsi. But I have to tell you that the relationship had broken down completely between him and the board. I heard it on the radio one day Mr Tsotsi saying that I do not like him or something like that. I had to work with him whether I like him or not. I had to work with everyone on the board whether I like them or not. It is not about liking them. I had to work with them.

Adv Vanara: There are media allegations that someone close to the Minister is doing business with Eskom. Do you not think that there is something wrong if the partner of the Minister is doing business with Eskom? The problem is impropriety associated with the transaction. Does the Minister want to comment on this?

Minister Brown: I would like to comment on it. I must be honest with you that after this period, "my partner here and my partner there", I am worried that if somebody walks next to me, they want to be my partner. I walk with nobody any longer and no one calls me my partner. Let me make a point though. The issue is that there are two allegations – the person in question cannot defend herself in this meeting and I will not be using her name. There are two allegations against her. Both of them are on Eskom. The first issue is the oil deal which is before the press ombudsman because she was no longer working for that particular company. The second issue was about a mine or something. The allegation was that I would have advantaged someone unfairly. That was the underlying allegation. They applied for a contract but she did not get the contract. I think anybody can reasonably do so. I did not advantage them. I have never asked anyone – no CE, CFO, no Acting CE – to give anyone a contract. I have fought – I have a lot of business friends that come to see me because they think the company is looking for them because they are young or old black people. I do send the application onto the companies. That is the only way I can do it. I have never ever asked any company to give any business to anybody in particular. It is an undue burden that you place on the CEO and it is unethical to do so.

Adv Vanara: My last question is that there is a testimony before the Committee that in the beginning of this year, 2 March, there was a board meeting – you do not need to know about board meetings as you are shareholder’s representative – at this board had a decision prior to the 6 o’ clock meeting that the board was meant to suspend Mr Koko, Acting Group Executive. There is a testimony that Mr Khosa said that in a meeting between Mr Khosa and Mr Qoma that you, the Minister is captured by a G family.

Minister Brown: Which or whose family?

Adv Vanara: A G family.

Minister Brown: The Gupta family?

Adv Vanara: Yes, Gupta’s family. That related to the Gupta’s family, sorry, Minister, that the Minister is captured. That Mr Khoza himself is captured. And the reason given for that is there was a board meeting, specifically, in which it was alleged to be for the suspension of Koko, which is 2 March this year. Mr Khoza phoned a G brother that the board was about to suspend Mr Koko and there was need of some intervention. One of the Gupta brothers phoned the Minister to stop the suspension of Koko. The Minister phoned Dr Ngubane who was the board chair to stop that suspension. I am just relaying the evidence that was led. The question is if you are aware of the call you made to Dr Ngubane to stop the suspension of Koko.

Minister Brown: I also saw this in the media too. No. I did not call. Did the Guptas call me or did I call them, because I do not have their number? If no one phoned me, why should I call them? Even if I have called Dr Ngubane it would not be about the suspension, but about other issues. The board should take a decision that it has to make. I think you should ask the people who told whoever whether they have said so and why they have said so because now it is my word against their word. I have not stopped the suspension of Koko. As I said earlier, I was the one that asked Koko to step aside eventually. I am trying to figure out whether it is Dr Ngubane who told you, Mr Qoma who told you or Mr Khoza who told you. If they have told you, you should ask them please.

Adv Vanara: The reason I am raising the question to you, mam, is there is evidence to that effect before the Committee and I am putting it to you to give you an opportunity to comment on it. If you want to refute it, you can and if you want to further comment on it, you can do so. That is the purpose I am putting this to you. Thank you, Chair, no further questions.

Chairperson: Thank you, Adv Vanara and thank you, Minister. I want to comment on what the Minister had written down in her notes when she said: “I received legal advice to decline your invitation on the basis that your process was unfair, inappropriately accusatorial, and that my appearance would only serve to legitimise a pre-determined interim report containing a rehash of untested information designed to embarrass particular politicians”. Minister, I want to tell you that you took a correct decision to come to the inquiry because this is the Committee of Parliament. Therefore it has the backing of the Constitution to invite you to come and account to the Committee. Because if you have not done that, Minister, to me, I see someone who is illegally, someone who is undermining the Constitution and it could also have been a criminal act because that would be an unconstitutional act for you to act like that, especially, for you, who is the Minister of Public Enterprises and this Committee is the Portfolio Committee on Public Enterprises. We rely on what you tell us to take the work of Parliament and the country forward. I think that the advice that you got was wrong advice. I am not a legal person and I am not a legal guru. I think that it was wrong advice that you were given. Thank you very much for availing yourself to this Committee.

Ms Mazzone: I want to start dealing with this Committee, especially what this Committee does. I would like to say this in a few words. This is a constitutionally mandated Committee. It is a quite strict constitutional mandate. I was personally affronted and astounded to hear that the Committee had received a letter from the State Attorney saying that we are acting in a way that was unconstitutional and unfair, etc and etc. This is one of things – you know – we deal with in life. In that letter, Minister, you called us a kangaroo court. There is a difference between a constitutionally mandated body and a kangaroo court yet you sit here today and state that you are not obstructionist. I think you did all in your power to stop the Committee from sitting. The letter we received would indicate as much. I would like to bring this in the context of you saying that there 54 million people in this country and that they should all be treated fairly and equally. I put to you that the 54 million people would expect you to do what we are doing right now. They are expecting us to be constitutionally executing our mandate. I must remind you, Minister, our job is to hold the executive to account. That is what we are doing. There are ministries and there are state owned entities that are failing under your watch that have caused massive damage to our country. We are holding those entities that are failing under your watch to account. I think, Minister, this is something that you should have worked hard on. Because in your notes, on page three, you wrote the following: “The best thing for the country, for the economy, for Eskom – and for me, personally – is a comprehensive investigation”. You have a comprehensive inquiry going on here. And you seem to think this is a WeChat, which exactly it is not. I would like to know on page two, where you said: “But there’s no time for that. Not right now, anyway. Right now, cleaning up the SOCs is of secondary importance to using the trouble they’re in to achieve short-term political and business objectives”. Could you tell me for who are these objectives and what businesses? What are those businesses that are benefitting from this inquiry?

Chairperson: Sorry, Ms Mazzone, I forgot to tell you that 15 minutes are allocated to each member. Your time is 15 minute each.

Minister Brown: You know, Ms Mazzone, I think it is my absolute right when I am not sure about what is happening to ask any question. It is my constitutional right to ask those questions to any Committee. There is no question about that. I did not reject to come here today. I came here. I am not in any way not wanting to participate. But, I have a right to ask any question that I feel I would ask. I feel that somehow the Committee feels that I want to muzzle them. Equally, I feel that you are trying to muzzle me so that if I want to ask a question to this Committee, I can’t. Any constitutionally constituted committee – anywhere or anybody, can be asked a question. Therefore, I really do feel that is completely within my rights to ask a question. I had difficulties with questions. It is not like I went outside there to the media to ask questions. I directly wrote to you. It is not as if I decided at some point, no, I do not feel fairly treated; very unfairly treated at many points where somebody says she is a liar, she is a liar or she lies and lies and not one of you have ever asked a question why are you saying she is lying. If nobody asks that question, the headlines are hitting tomorrow: she is a liar, she is a liar. I did feel offended by it and I felt in the same vein that I have to write to ask you what your intention was.

By the way, Ms Mazzone, when I said to achieve a short term political and business objectives, this was my opinion. This is how I feel about that. I feel that there are some objectives that should be achieved. As you may have similar opinions. I feel that there are a lot of spaces that I can operate in and I can speak about, especially, how I feel about them. We have given so many people in this country our lives so that they can be free and free to say so. That is the same freedom that I am using here today. I have freedom to say what I feel I want to say.

Ms Mazzone: I stand equally to ask the same question. Let me put it to you again. You said that there are political and business interests. There are “political and business objectives” and you said that this was your opinion. That is fantastic. Can you tell me in your opinion to whom is it a political benefit and what are those political benefits.

Minister Brown: If you listen to me, on page 9, I think there is an issue around how we structure Eskom into the future. We had this discussion before in the public domain when we spoke about the call on privatisation of Eskom and I said that basis services will not be privatised in my lifetime. These are the kind of issues I am talking about. I can’t say that “Jack Scrack” company is benefiting from it. Let’s say that those are my broad feelings about it. It is the contestation that we are having. Whether it has a political or business benefit out of it, that is the issue. That is how I feel about it. That is my opinion. You may have a complete different opinion. You are entitled to your own opinion yourself.

Ms Mazzone: Let’s leave it there in your conspiracy theory; that is fine.

Minister Brown: I did not say that it a conspiracy.

Ms Mazzone: I am saying it. It is my opinion.

Minister Brown: That is okay; if it is your opinion.

Ms Mazzone: Let’s look at your years as a Minister. You became a Minister in May 2014 and we are now in November 2017. Under your watch we had SAA going into a complete collapse. Then we go further on, we have the Denel Laser Asia deal which has a massive fight with Treasury; we have another massive collapse in our Treasury and other ministers losing their position. What I am expecting from the Minister is to say: hold on; there is a serious problem within our entities and that the basic rules of corporate governance are not being adhered to. It is causing a massive collapse of our economy. It is causing our government to be unstable and it is causing our country economy to suffer. People have to answer. I was expecting the Minister to stand up and show serious leadership; but she was silent. And you tell us now that there an SIU investigation and that there is this and there is that. Minister, this is the only Committee that has started to investigate the possibility of whether there is a state capture or whether the capture is a real thing. Because if not now, when? And if not us, then who? You keep telling us that an inquiry is imminent and keep telling us about these SIU investigations; without seeing anything about it. So people have been fired – right left and centre and people have been replaced, right, left and centre. And the only one person who remains standing is you. You stay standing throughout this. How is it possible that all people around you falls without having an effect on you? I have to question then that when people come here and tell me things like Mr Tsotsi today: “I went to Ms Lynne Brown’s house and there was Salim Essa and Tony Gupta”. Ms Brown, why were Salim Essa and Tony Gupta at your house when Mr Tsotsi arrived?

Minister Brown: Mr Essa and Mr Gupta were not at my house when Tsotsi arrived. In fact, I really deny that. Mr Tsotsi must please tell me which day it is so that I can verify it. But at this stage I do not know that Mr Essa and Gupta came to my house.

Ms Mazzone: Why should he lie? What would be the purpose of lying?

Minister Brown: Did you ask him?

Ms Mazzone: We did. We asked him why he was lying. He said he was not lying. This is what happened.

Minister Brown: I don’t know. I was not here. I cannot tell why he was lying. You have made a couple of statements which I would like to respond to.

Ms Mazzone: It is fine. Ms Brown, in your statement, page 6, you said: “Several months ago the Honourable Mazzone came to see me in my office to warn me that if I didn't ‘come clean’ I would be made the scapegoat for Eskom’s mismanagement. Is that the objective of the inquiry? Surely, if she was a juror she would be disqualified from jury duty”. Now, the Minister, let’s give a full picture here because I think it is unfair to our colleagues and it is unfair to South Africans. On 28 May, your PA, Khalidi, I think her name is, sent me a WhatsApp which is on my phone, which said: Evening, Honourable Mazonne, I hope you are well. Sorry to disturb you on your Sunday evening. I have scheduled a meeting with the Minister tomorrow at 13h00 at our office in Cape Town. We did not get a response. I am still following up if you are still coming. Khalidi, Chief of Staff, Public Enterprise Ministry. I responded. Hello, Khalidi. Yes of course I will meet the Minister. The only request I had was on Tuesday. But tomorrow suits me much better at your offices in Parliament. Please tell me where the office of the Minister is because I have never been to her office. She said 16th floor, 120 Plein Street. I said: Fabulous. I will see you there. And I said please Khalidi, my name is Natasha and my surname is Mazzone. She said awesome, I am relieved. Sometimes, I get problems with politicians who insist that I should use their titles. The reason I was invited to your office was because I made a statement about the Dentons report, that there was destruction of documents happening at Eskom offices. You came to me in the corridors of Parliament and you said that you were disturbed to hear about this destruction and if you know about this destruction will you come in and tell me. And I said to you absolutely. I thought that there will be light at the end of this tunnel. In a WhatsApp conversation that I have, I also said, Khalidi, I realise that the Minister will be with people around her, I would like to speak to her in private, just for five minutes. The staff was very kind when I arrived at your office. I was offered a coffee and I was taken to your office. There was no staff around us. I asked you, honestly, whether your office was bugged. And you said to me: I am not sure. You said it could be, but you are not sure. We spoke very frankly about my concerns about the Dentons report. And you said to me that you agreed with me. You said that the Dentons report should have been given to me and you do not know why such a farce was being made and that I should have received an original copy. I told you about computers that were being cleaned and I told you about board records that were being deleted. You said to me that you will look into it. And you thanked me for coming to your office to give you the information that you requested. And I said to you – a very blatantly and frank question – Ms Brown, are you captured? And you got quite emotional and you said to me – I swear to you, I am not captured. There is madness going around me. Everything is exploding and it is madness. I am not captured. And I said to you if that is the case, I want to believe you. The only way that you will clear your name is to come clean about those who are captured. Because if you do not do that you will become the scapegoat and I maintain that this was sound and good advice. If I were a minister, I would expect fellow South Africans who are also worried about these kinds of affairs to come and give me advice. I did not want to talk in front of your staff and I did not want to talk in any way that would put you in an awkward position. That is why I chose to speak to you, privately. Actually, I thought that the conversation between us was confidential until I saw what is here. I thought that the Minister and Shadow Minister may have this kind of relationship. And when I walked out of your office I felt that a heavy burden was lifted from my shoulders. The Minister is not captured. And slowly and slowly things started deteriorating. This is what we have to avoid because we are not fighting for ourselves but we are fighting our country. Ms Brown, in that meeting, I gave you a brown envelope. My brown envelope was not full of money. It was full of leaked emails of the Guptas. I said to you this had been given to me. And you said, thank you very much, I will look through the stuff. If that was not enough to make sure that you and your colleagues had the leaked emails. I handed over a set of documents in the House, in public. I handed out nine envelopes to the Speaker of Parliament. When the Speaker of Parliament came in, I put my hand up and I said I want to hand to the Ministers the Guptas email and I took time to separate envelopes for each Minister. To come here and state that you have not seen the leaked emails is not true. For you to say, in your statement, that when I came to see you it was some kind of threat. You know, it certainly was not. You asked me for the meeting. And I obliged. I came to the office to meet to discuss the destruction of Dentons materials. I thought that our meeting will establish a good relationship. I truly find this disturbing. And I maintain, Ms Brown, you have got a good opportunity in this world to come clean about things that are going on because I am honest that I am not buying that you did not know. And I am not buying that you do not know now. The Guptas family systematically coming into our state owned entities, cutting them into chunk sizes, and selling them off. I want you to tell this Committee as a Minister: Do you have any knowledge whatsoever of Guptas interference in any one of the state owned entities which you oversee and of which you are stakeholder, that this Committee should know about?

Minister Brown: Can I respond?

Ms Mazzone: Please.

Minister Brown: You came to me, Ms Mazzone, at the time Mr Brian came back. And you said “Minister, they are shredding; they are removing footage, CCTV footage” and you have it as an absolute proof. You have never left an envelope with Guptas leaked emails at my office. In fact, you left no envelope at all. Let me remind you, because I think this is very disturbing to me as well. You are absolutely right. The issue that is bothering me is that I do not normally reveal a personal conversation. I have not done this before. I did not put in my statement today but the fact is that as you walked out you said to me – have you ever threatened, Minister? My family has been threatened. And you must know that this will mean that you are going to be made a scapegoat. And you mentioned that one of my previous colleagues said something that made him a hero and that if I say something, it will make me a hero too. I asked what should I come clean on? I asked this question over and over again.

Just for the record, I want to respond to these issue of the Guptas. I have never received these emails in Parliament. Let me deal with another issue quickly. In Eskom, the Committee is aware and I am aware of the fact that Tegeta is a company that operates within Eskom. In Transnet, I am not aware of any Gupta companies that operated in Transnet now under my watch. Under previous watches, I have nothing to do with it. I have something to do with it now because it is in my portfolio. Trillian was a matter raised in Transnet. And now you must be grateful that Lazer Asia does not exist any longer. If it happened to be a Gupta company, it does not exist. Do you know others that may be operating?

Ms Mazzone: This is what startles me. I know and 54 million South Africans know that Salim Essa and the Guptas family are intrinsically linked. Of that, we have no doubt. McKinsey came here, to our Committee, an internationally accredited consulting firm with a London based manager. McKinsey was in tears in front of us in the Old Assembly Chamber because of the embarrassment the firm has become due to the Gupta association with Trillian. It is not only South Africans who know, the whole world knows what going on in South Africa. And you, the Minister, you sit here and you still claim ignorance. If you do not know what is going on in your own entities, Minister, I am sorry. But something in the state of Denmark is very amiss. You cannot sit here and tell me that Salim Essa did not have shares in X, Y and Z. You are always briefed by your staff unless your staff members are not briefing you. You read the same newspaper that I read. You watch the same TV that I watch. You have to put your foot down and say not under my watch, not anymore. If you do not put your foot down and if you do not say not anymore under my watch, someone will have to assume your complicity.

Chairperson: Thank you very much, Ms Mazzone. I am sure you do not expect a response because this is a comment.

Ms Mazzone: If I want to follow up, I will.

Mr Shivambu: I am very worried, Chairperson, because Mr Tsotsi took an oath and said ‘help me God’ and Ms Brown took an oath and said ‘help me God’ as well. The last time I checked Exodus 20:7 said: Thou shalt not take the name of the Lord thy God in vain, for the Lord will not hold him guiltless that taketh his name in vain”. We have the situation where one of the two may have used the name of God in vain.

I want to deal with policy in terms of state owned companies. In 2015, we approved a special appropriation bill which gave R23 billion to Eskom. That was under your watch. Did R23 billion contribute to the stabilisation of Eskom? Do you think that Eskom is now in a financially stable status? Is not Eskom going to have managerial crisis in the future despite the fact that government has disposed its interests in Vodacom in order to build Eskom?

Minister Brown: The R23 billion was intended to stabilise Eskom and it did so. Presently, Eskom has liquidity problems. Eskom has raised 2.2% of its build programme for next year; but, at this time in previous years, it would have been raised almost 100%. More than that, Eskom had 2.2% tariff increase last year and that 2.2% does not cover the cost of electricity, you know. The economy is not growing. In the last year, electricity grew 1%, meaning that it is not growing fast enough. The sales of electricity are not growing. Eskom was at a very important point and I raised this with the board. Given that the Minister of Energy will be talking to the energy mix and the Integrated Resource Plan (IRP) and the Integrated Energy Plan (IEP), we will get a better sense of the what status of Eskom should be. I have a sense that we need to rethink the company. I am not saying that we should be privatising the company, because every time I say that we need to rethink, people understand me to be implying privatisation.

Mr Shivambu: Lets deal with the company’s status quo, whether the company is financially stable and whether the company will be able to meet its obligations.

Minister Brown: I told you that they will meet their obligations and they have told me this as well. I had a discussion with them about this. For the next six months, Eskom will be okay; but that is not enough. You cannot be stable for only six months. Eskom should look at how it should create this kind of a sustainability that the company requires. The company is fine for the short term and is not for the long term.

Mr Shivambu: You said in your statement that “Eskom is continuing to service some of these apartheid-era contracts today, 23 years into our democracy”. Who is fault is that?

Minister Brown: Eskom’s fault.

Mr Shivambu: Eskom’s fault? Under whose watch? Who is the political leader is responsible for process? You are stating that Eskom is still bound to apartheid contract. Why cannot you give political instructions that would allow the change?

Minister Brown: You cannot change a contract. A contract must come to an end and that is the time that you have to bring in the changes. I have given an instruction that they should look at how the cost-plus mine contracts will be managed in the future. What are we going to do with the cost-plus mines? At this point, Ms Mazzone has raised an issue that Eskom – that coal comes from four companies. We must change that. I have given an instruction.

Mr Shivambu: When did you give instruction?

Minister Brown: I have given instruction under the watch of Brian Molefe. In the SCOPA meeting, he told members that he was instructed to look into Eskom with regard to the four companies.

Mr Shivambu: I am not saying about. But the context of these contracts, Molefe said that some of contracts have racial connotation in terms of who must stay and who must do what. Why always speak about that and do nothing about it. Who are you apportioning the blame too. You are running a department which has entities with contracts that are rooted in apartheid and you failed to check in the court of law whether these contracts could be annulled.

Minister Brown: We must be careful because we need these suppliers of energy. These four companies have enormous investments in Eskom. They are the biggest suppliers of coal to Eskom. You cannot just cut it off. You have to work hard on how to transform this plant. The fact that there are these contracts in place – it is something that Eskom is looking at. This is an operational matter. The fact that I have a policy instruction does not mean that the policy is going to come over night. It will come.

Mr Shivambu: My observation is that it is the cowardice of politicians that we get in this situation and you should not apportion blame to someone else. Let me ask again, have you ever met with the Guptas family – whether privately or at your work, or in your compound or in your house or in your office or Eskom office? Have you ever met any one of them to discuss Eskom issues?

Minister Brown: I have said this before. I have met the Guptas about 15 years ago or 10 years ago. I cannot remember. I have never met any Guptas in my function that I have to perform as Executive Head of my department. I have not met the Guptas. I know who they are.

Mr Shivambu: Haven’t you met Salim Essa? Have you seen him anywhere in the recent past?

Minister Brown: I do not know Salim Essa.

Mr Shivambu: Do you want to say that you are telling the truth but nothing else but the truth that you asked God to help you on?

Minister Brown: Yes.

Mr Shivambu: The person called Ingrid Tufvesson, do you know that person? Do you know her business interests with Eskom, which was facilitated by Matshela Koko?

Minister Brown: I have answered Adv Vanara on this matter. I did not want to use the person’s name because she has no right to defend in this room. But I saw it in the newspaper as well. She had two contracts according to the newspaper and when I asked her about the two contracts she told me that she was no longer with the company on the oil contract and she was not part of the second contract. That was before the office of ombudsman. On the second contract, if there was any influence, she can do it on her own, but if there was influence, she did not get the contract.

Mr Shivambu: Did you know she was bought a car by the Gupta family? A car was bought for and it was registered in her name. A Range Rover from Dubai, which is now in her possession. Do you know about that?

Minister Brown: Was it bought for me?

Mr Shivambu: Yes.

Minister Brown: I have an X1.

Mr Shivambu: Do you know that she owns a Range Rover?

Minister Brown: I know that she owns a Range Rover.

Mr Shivambu: When was it bought?

Minister Brown: I do not know.

Mr Shivambu: Didn’t you know that Guptas were involved in buying that particular car?

Minister Brown: In fact, what I do know is that she said that she does not know the Guptas at all.

Mr Shivambu: You do not know when the car was bought and she is your partner.

Minister Brown: That is an assumption that you are making that she is my partner and I do not think that I have to say here if somebody is my partner or not.

Mr Shivambu: The process of appointing directors and board members…

Chairperson: Members, earlier today, I have said that we should not go into personal matters. Remember when someone called the President a thief or whatever, I said that this cannot happen in this inquiry because that is too low for the integrity of this inquiry. Please let not go to personal matters.

Mr Shivambu: When your PA went to Dubai to meet the Guptas. Did she tell you that she is going to meet them in Dubai?

Minister Brown: My PA was going to Portugal.

Mr Shivambu: And then she went to Dubai?

Minister Brown: She told me when she was at the airport.

Mr Shivambu: When she came back, did she tell you that she met Gupta family members?

Minister Brown: No, she didn’t.

Mr Shivambu: Then why did you release her?

Minister Brown: It was a pressure: she and I have agreed that I should release her.

Mr Shivambu: On the process of appointing board members, the process is that you call for nominations of those who will be consider board members of the state owned companies. Do you know who nominated the following members ultimately to the Eskom board: Chwayita Mabude, Venete Klein, Viroshini Naidoo, Mark Pamensky, Romeo Khumalo and Dr Ben Ngubane? Do you know who nominated them and whether these names were in the database for those to be considered as board appointments?

Minister Brown: I gave you a copy of board appointments through the Committee and all those names are there.

Mr Shivambu: They were part of the database. Did they arrive at the database at the same time or in different instances? Didn’t you know about that?

Minister Brown: I did not know about that. This is how it works. There are adverts that go out and they are people who get nominated or they apply. It goes to my legal and governance unit and then, from there, those who are qualified in terms of the criteria that have been set are placed on the database and then for Eskom to Tsholofelo Molefe, Matshela Koko and Dan Marokane it goes and becomes verified. I cannot tell you so and so came on the 11th or 13th and so and so, on the 18th.

Mr Shivambu: The memorandum of incorporation of Eskom on your role as head executive of the department says that you should not concur if the board wants to make a suspension of a senior executive in Eskom. Did you concur with the suspension of your former GCEO, Tsediso Matona, and Chief Financial Director? Did you concur with those suspensions and what are the bases if you concurred with the board?

Minister Brown: At the time, I said it earlier, I spoke about it quite at length with Adv Vanara, that Eskom had ‘going concern’. The reason that we got R23 billion was because of Eskom’s ‘going concern’. What happened was that Eskom was – we were in the War Room. I went to see the board and to brief it about the War Room and to also tell them that there were a couple of issues that needed to happen and one of those issues was that we needed to dive into matters. We were having load shedding every day and there was no verified information coming out of the company and, there were a number of issues, and the high price of energy.

Mr Shivambu: Did you concur?

Minister Brown: I would like to give you the context. If you don’t mind I should do so. It was enormous conflict in the country around Eskom. I told the board, I said to Adv Vanara, there was a set of minutes: You have to what you have to do. And I do what I need to do. They did send me the four names of those who should be suspended. I accepted. I had no reason for not accepting it.

Mr Shivambu: On the page 25, Minister, you said: “Do members of this committee honestly believe that what I’ve just described is a fair process, or that it is getting any closer to revealing the facts?” I think, as a member of the Committee, I should not believe you. I do not believe the things you said, particularly, around the board, your relationship with Guptas. I don’t think that Mr Tsotsi who can come here and disclose a meeting with the President, can come and lie about your meeting at your house, with Salim Essa and Gupta. I don’t think if we have to choose who to believe between you and Tsotsi, we must believe you.

Minister Brown: You believe what you want to believe, Mr Shivambu. The issue is, eh, why are you not asking the date that it was at least? At least, we should know the day this occurred.

Mr Shivambu: He said the date of 7 May.

Minister Brown: Anyway, there was no one who came to my house, be it Salim Essa or Gupta.

Dr Luyenge: Thank you, Chairperson. Minister, I want first to refer you to the poet, Rudyard Kipling, in his poem: “If you can keep your head when all about you Are losing theirs and blaming it on you; If you can trust yourself when all men doubt you” In this regard, as political head of the department, you have an obligation to take the responsibility of everything that goes wrong in that department, even if it not out of your own creation. But it does not say take the responsibility for people to do wrong, without doing anything about it. If it comes to accountability, you are the one who has to account. In your original submission – and not this summary – you have referred to the Constitution, starting with the Preamble of the Constitution and founding provisions of the Constitution – I am not going to go deeper into important aspects that were raised. But, I want to refer to the first one that relates to the conduct of this particular inquiry as led by the Evidence Leader who is our tool of operation whom we believe has the expertise needed to do this work. As you are here now, I am not going to refer to the aspects that you were raising around that because at the end of the day you are here and the Chairperson commended you that you actually did the right thing to be here irrespective of the things you were raising.

On human dignity, section 10 has been quoted. I fully agree with you that it relates to that. And also the Chairperson had done that because even if we are parliamentarians, we do not have a right to – under the guise of Parliament – to actually look upon the dignity of individuals even if they are Members of Parliament or not. We specially make reference to the President of the Republic of South Africa as well as uMama Dudu Myeni who is a married woman; we cannot insinuate that she has a relationship with the President but save to say the Chairperson actually reflected on that on our part as Members of Parliament. We do not have the right to do that because the Constitution compels us to not act capriciously or arbitrarily. It therefore means, Minister, as Members of Parliament, we come from diverse political backgrounds, with diverse political agendas, but in this particular work, we are conducting oversight. We are inquiring, and we are not investigating, the State Capture here. If this is an investigation of the State Capture, it means that I am in the wrong committee. Here, we are an inquiry. The Evidence Leader is leading an inquiry which is inquisitorial and is not accusatorial. The issue, maybe, which I also want to speak on, is people are speaking under oath and we have actually to respect all people. Mr Tsotsi was here and he indicated that in a meeting he had with you, Minister, you warned him not to be part of interference, as a part of complaints you received from various people and management. In that meeting, you ended up saying that if he was not willing to do his job, you will find someone to do that particular job. That meeting ended in an abrupt manner. He continued to say this afternoon that two days before the SONA, Tony Gupta spoke to him in the same manner and the meeting with him also ended abruptly saying you will not do what you should be doing. Then, when I say, Minister, take the responsibility as a leader of department, in this inquiry I am raising this matter, because there is a hypothetical view that says there is a deliberate looting of the state resources in which Eskom and other entities are fingered. They are under your leadership. Correctly or wrongfully, you have a responsibility to go further and make more of these investigations and satisfy us as a Parliament even if this process is being concluded. On this matter that people have reflected on, and in the eyes of the public, people are looking at us as a Parliament that is doing nothing. Now we are raising this matter to you and your department. Something has to be done. The other issue is the manner that board members are appointed and operated and this relates to Eskom. Mr Tsotsi indicated that in that board he was isolated. It means that the conducive environment for working does not exist in that board and it is a worrying factor at Eskom because of the global standing of Eskom and it affects our economy.

Minister Brown: It is not a question of whether I am right or wrong. You know, there are many issues that happen within these state owned companies. You remember that Eskom has 45 000 workers and they are across the whole country. The same applies to Transnet. It has 67 000 workers who are across the country. These are the biggest ones. I have to apply my mind to all these matters. At the moment Mr Tsotsi is no longer, and the board that he was part of, is no longer in operation in Eskom. With Mr Tsotsi, I never wanted an executive chair whereby he has staff and all of that. I have to exercise leadership and assume the responsibility of the company. I inherited a situation in Eskom where Mr Tsotsi operated as an executive chair and there were a lot of complaints from the officials, from the CE; there were a lot of complaints that there was a lot of interference. I am sure that that might relate to that matter. I raised it with him. I raised this with another chair at the time because I did not want this to continue. And yes, I have to take the responsibility for all state owned companies; but I am very conscious that I should not overreach in the state owned companies. I have responsibilities that are governed by law. They are governed by the Companies Act, PFMA, and, for example, I do not get involved in procurement. My responsibilities are also governed by the Constitution. So, in that way that I have to do what I can do within the authority given to me; I appoint the boards and also hope that these boards will be able to work together. There have been boards where there was not a good relationship between one or other member and where there was a division in the board. There have been occasions like that. I had an occasion where I had to build the unity of the board. You know I have read a 2007 Eskom report and it looked like it had similar issues at the time. I mean I have heard in this meeting the issues of three members that have presented. That is the calibre of board members that we had on the Eskom board. And of course there have been conflicts of interest. Mark Pamensky on Eskom board, had a conflict of interest and we have resolved that matter. I asked him to resign or, I mean, he resigned. All are issues that come up. I know there is a kind of incredulousness about the fact that, there is a sense, let me put it like this, actually, there is a sense, and many people say it, the state owned companies are completely captured. And now I raise the issue; if you know how they have been captured, you need to raise this. I have an issue; if I know that they were captured by a particular family for example or by anyone, raise the issue in order to deal with it. At the moment I am dealing with the issue. The issue is being investigated. You know that there had been many investigations at Eskom that led to prosecutions. That is why I went the route of SIU at that time.

Dr Luyenge: Now, Minister, there is this family called Gupta. Do you know any reason why they or their related companies should not do business with the government? Are they blacklisted? I am asking this question because on a number of occasions this family has been mentioned but there is no one that says this Gupta related company is not on database or did not follow the supply chain processes. It would be said that there was no contract and still they were paid by Eskom. On this, we want to hear from the Guptas, individually. If they are in the database, they must show us the papers and then we start to ask: are they competitive enough or are they more qualified to do the jobs they are doing than locals cannot do? If that is the case, are they the only one? What about Glencore and all of them? This concentration at this level we must get into it and you must make us to understand especially where you have a department that has actually acquired services from them. Can we appropriately be schooled about things these people are doing rightfully or wrongfully?

Minister Brown: That is the question, Dr Luyenge. They are not blacklisted. I remember many years ago when I was an MEC for Finance in the Western Cape, the National Treasury used to put out a list of companies that were blacklisted. Their companies are not blacklisted. I mean, eh, it is actually quite complex. If it is fraud or a crime against the company, yes, but we are stopping companies on the basis that they are doing business with Guptas; if they get it illegally, they must be charged like any other company. If they have got it fraudulently, they must be charged for getting it fraudulently. If they paid fraudulently, then they must pay money back. In fact, I made a point about the coal. Eskom pays about R50 billion on coal every year. And they are long term contracts and you cannot just walk away from a long term contract without actually, eh, I mean, you have seen the Glencore matter recently; we cannot get out of a long term contract. You cannot simply lack trust in the business for example. If you have a contract; there is a contract. Many of these contracts are 20, 30, 40 years old. These contracts are obviously in the hands of previous white business and they constitute 73% of the R50 billion. And I asked this very specifically: 27% are black owned companies. There are between 40 or 50 black owned companies; I do not remember exactly how many there are. Out of 27%, 7% are with Guptas. I asked that question particularly. This is with Eskom for coal. At the moment there is an investigation by National Treasury, the department, Eskom and there have been an SIU investigation. There are a lot of investigations into it. It is very complicated to me to answer this question unless someone has done – and can prove that – someone has done something wrong; but we are not at that point where we can prove that someone has done something wrong. To me, that is the complexity of it. A couple of years ago I defended Tegeta in the House because it was a black company. It might be a naturalised black owned company, but it was a black company. Two or three years down the line, it remains the same thing. That is why I needed an investigation. I believe the SIU investigation will result in prosecution that is why I went that route. It is a complex matter. It is more complex than we think or than we understand. At this point, we have to ensure that black owned companies are able to participate in Eskom. 60 years ago, 1923, cost-plus mines were created. Something has to be created. That is what I have asked. We have to apply our minds to ensuring that the black community are capable of participating in the economy.

Mr Swart: Minister, in your May Speech, you referred to my recommendation of an SIU report. Do you remember? We had a short discussion about that. The concern from my side is that about five or six months later, nothing of that has happened. If you look at the Dentons report on Trillian, it is very clear on concerns that the issue of Trillian and Eskom are continuing. The problem is that we do not see urgent action taking place. We have a Public Protector’s report, that we have a long discussion about with Mr Molefe last night and observations and findings which all sit as prima facie evidence. That report was referred to the Hawks. A year later, no action has taken place. You have indicated in your statement that you are pleased to hear that the NPA has, yesterday, established a crack investigative team. They told the Sunday Times in July that they have established the team; again in September and then yesterday. There has been no action, even the Asset Forfeiture Unit which can go immediately and attach assets – as it has done in other cases. It is beyond your control and it is not your fault but SIU unit. It could be useful if someone would put pressure somehow and I think it is the role of Parliament to call the Hawks and ask them to account because it is taking so long. Why is the Minister sitting on the SIU proclamation which the President has to sign off? This Parliament is sitting with the same situation with the SABC inquiry recommendations. The President sat with such a proclamation for months. The main challenge is that we have seen no action to address these investigations that are taking place. It could be billions of rand that might be leaving the country. How do you respond to that?

Minister Brown: I absolutely agree with you. In fact I have written a letter again to Minister Masutha because I want this SIU investigation to take place. I am not in control of the Hawks and others. I am calling SIU and I think we can put more pressure to ensure that this investigation takes place. You know the issue around the State Capture report. Now, there is an issue that the President would take it on review. The President could have appointed an inquiry and if we could have it, it could have helped all of us. Yes, I do think that this must be investigated. I think it was investigated as we did investigation at Eskom and other state owned companies. I mean in the last six or eight months, we had a number of people suspended and so forth and there was no deep investigation into these people and disciplinary hearing and so forth. It is just to ensure that investigations are speeded up. I agree with you.

Mr Swart: That link to the narrative around the state capture or the way up to President Zuma, who have been mentioned earlier today. Then one can see the line of tactics played today because he can sit on the proclamation and if he had to institute a commission of inquiry and if he is a part of State Capture and he is a friend of Guptas as it has been alleged. This is a major challenge for us. How do we deal with that? But the way you tried to deal with it is the Dentons report that was sanctioned by the board itself, but the Dentons investigation was regrettably cut short. I have read the Dentons report and it seems to have done a lot of work on the diesel contracts and why was it cut so short? It seems that was problem. Why it should be – it is not your decision but the board’s – to assist you to do your job. That report came out and half of it was obstructed and there are a lot of questions around that as well.

Minister Brown: A large number of issues within the Dentons report were addressed because – remember, as I said earlier, that diesel contracts, which was the bulk of report in some respect, because it was showing how – I cannot remember – but people in other jobs were dealing with – were actually diesel sales people – and were selling diesel and it looked like the previous leadership at the time had a black economic empowerment plan. Some of these matters have been raised and have been fixed and have been addressed.

There were two issues in the Dentons report that have been not fulfilled. You are absolutely right. The issue is that the Dentons made a recommendation that it should be referred to investigations; some of the eight recommendations that they have made. Some of these investigations have taken place. They have not been completed yet because the company is large, you know. But I feel that it is an SIU investigation that will lead to prosecution, if there is any prosecution.

Mr Swart: Are you aware that there is a SIU report on coal contracts and transport and I think that it is now 10 months since the report had been finalised. Have you seen that report because we heard of such a report in the Justice Portfolio Committee, I think six months ago, that it has been finalised and it might be with the President. Have you seen that report?

Minister Brown: I have been receiving reports over the years on Eskom or Transport or any other entity in my portfolio. I would have access to these reports.

Mr Swart: Thank you. Our challenges are conflicting evidence that we have received today with regard to Guptas, Salim Essa, and Tsotsi at your house and you denied this. Are you saying that you never had a meeting with them or met them at your residence? Our duty is to weigh the evidence and you seem to rely on your executive functions. Did you have meeting with Gupta and Essa on other issues not related to your executive functions?

Minister Brown: You have asked the same question. All Members who have spoken have asked whether I have met Tsotsi at my house, along with Essa and Gupta. No, I have not met with Gupta and Essa whether socially or personally.

Mr Swart: May I ask if you have met them somewhere else?

Minister Brown: Look, I know who they are. I have said it earlier that I have met the elder brother a number of years ago when I was still in the province and I have been at his house in Cape Town and I know who the Guptas are. I cannot say I am a socially friendly with the Guptas. Neither am I an executive friend with Guptas as I do not hand over my executive functions. So, I mean, I feel quite uncomfortable about it as it looks like everyone else is telling the truth except me.

Mr Swart: I think we are giving you an opportunity to…

Minister Brown: I am trying to explain to you.

Mr Swart: You see, on page 4, Zola Tsotsi laid evidence this morning. He had a meeting with Gupta. Mr Gupta told him: Chairman, you are not helping us with anything and we are the ones who put you in your position and we are the ones who can take you out. We will put this to Gupta when he comes. You would understand that this evidence plays into a narrative of the Guptas play a major role in board appointments and this goes directly against your role of appointing board members. How do you come and deal with that?

Minister Brown: It is very debilitating because no one wants to be on the company board. I am telling you now that it is very difficult to get board members. And I think if you follow the process; a very strict process – we inherited that process and this year – I could have stopped the process. I am given a list by the board and I have never changed a name of any person or take someone else into the board. What I check is to see the criteria are followed by the board.

Mr Swart: You said that you were not part of procurement, but all the issues about Tegeta have been in the media. Are you not concerned with the allegations about which other ministers are involved? Mr Molefe and Dr Ngubane told former Minister Ramatlhodi to suspend all the Glencore licences. Mr Molefe denied that last night and he said that there were two narratives. In September, Mr Ramatlhodi was fired. In December 2015, Minister Zwane joined Essa and Gupta in Switzerland to meet Glencore and discuss Optimum for Tegeta. You are saying that you are involved but we see other ministers being involved. Then we have the April 2016 Eskom board meeting to approve R659 million to approve a pre-payment which later was found to be a pre-purchasing price. The Public Protector says that it was very clear and she used the word “apparently” which is not speculative and is not fresh air like Mr Molefe says; rather it seems manifest or obvious; it is very visible. That is the word, apparent. The Eskom board bent over backwards to accommodate Tegeta in that whole deal, which we know is a Gupta related company. When you put all these together, it seems that the board had put all its effort together to benefit the Gupta company and, by extension, the ministers as well.

Minister Brown: I also heard Schneider say the kind of point I make when I speak of cost-plus mines. For me, the suppliers of the coal are important. Given the cost-plus mines in the short term, the way it is structured, if there is a coal mine that is providing coal at R150, at the time you do support it. I then relate to Dr Luyenge when he asked if they are blacklisted. Of course, Minister Zwane, even though I am not involved in the procurement, is involved in mining and what Minister Zwane is doing is his business, but Tegeta and Optimum had a business relationship between the two and the companies sell to each other. I am logically explaining myself. If there is any other truth, that for me is quite an important one, I mean, this is a part of investigation I want to do, the procurement and contract management litigation. If there is any other proof, them that must be reversed.

Mr Swart: Thank you, Minister. We know that National Treasury made an investigation and found major concerns and the report is before SCOPA. They have flagged it and they in fact said there should be a forensic investigation. There have been many questions around that sale and we even see the business rescue practitioners have laid charges of corruption because the payment should have gone to them and not to Tegeta. There are a lot of questions around that which revolve around the State Capture Report at a high level.

Minister Brown: The forensic investigation is continuing and we are cooperating with them.

Mr Rawula: You are not involved in board appointments. We have heard evidence from the former Chairperson, Mr Zola Tsotsi, where you confronted him and complained to him that he was interfering with the administration. Subsequent to your complaint, he received a complaint from Tony Gupta that he was useless and that he was not helping them with anything. He was called by Dudu Myeni who was at the time at the President’s presidential house and when he went there, he was told three directors must be suspended. He was talking to Dudu Myeni when the President came in and asked him if he knows about those three people that need to be suspended. Further, on top of that, he was told by Dr Ngubane that there was a fourth person which Minister Lynne Brown had asked must be added to the list. Now, there were four directors to be suspended. The question is who suspended them because the initiative, it becomes very clear, to suspend the Eskom directors did not come from the board, rather from outside, the collaboration of interested parties, including you. Who suspended these directors? Is it not you in collaboration with other executive, in particular, the President and with influence from the Guptas?

Minister Brown: I did not say I am not involved in board appointments. The MOI stated that the shareholder makes the appointment.

Mr Rawula: No, the suspension of directors.

Minister Brown: Oh I heard you saying board appointments. On the suspension of directors, I have answered this question before. The issue is that the board wrote a letter to me and told me that – your conversation with Tsotsi, I did not hear it today – they wanted to suspend four directors. I agreed to it. I do not know whether the President and the Guptas were involved in this as well.

Mr Rawula: I was telling you about the testimonies we received. The resolution on the inquiry was to look at the suspension of these four directors and the meeting was on the 9th and the board was not happy with that resolution. Since the board did not agree, the matter was going to be referred to you. In the meeting of 11th, the inquiry resolution was passed. The two directors who were in the meeting were requested to recuse themselves. After that, they were told that they were suspended without wrongdoing. How do you divorce yourself from their suspension? They were not suspended by the board because it was not the initiative of the board. The suspension was only possible through you.

Minister Brown: From time to time, I do ask the executive committee when I meet with the board to leave because they are ex-officio and they respond in terms of executive director issues. I do not have the sequence of events and I know that I met the board. The board had to take the decision because I do not suspend executive directors. The only way this could happen is when the board takes a decision and they write to me to advise me that they wanted to suspend a particular executive director on the basis of certain reasons.

Mr Rawula: We also received from Khulani Qoma who was employed as a reputational manager – responsible for the reputation of Eskom because there was a reputation problem at Eskom. He laid evidence here that the Minister was meant to lie to Parliament, which you have confirmed here. You were prepared to lie to Parliament because of the briefing from Anoj Singh. The point is that the Minister was prepared to lie and therefore embarrass herself and further damage the reputation of Eskom. There was no action against Anoj Singh. We also had evidence here that Mr Koko lied publicly. On top of this, there was an allegation of corruption where her step-daughter had a company that was milking Eskom and despite the conflict of interest, you, yourself rewarded him too by appointing him as a Group CEO despite all those reputation potholes. Yet, Mr Khoza rescinded the executive suspension of Mr Edwin Mabelane and Mr Charles Kalima despite these people being instrumental in the McKinsey / Trillian transaction. Trillian is the one that we have evidence against here that it was supposed to have an agreement with Eskom; McKinsey’s consulting service agreement. He secured the work with Eskom but there was no agreement. The agreement was invalid because it has never been approved by National Treasury. There has been no proper investigation. All these characters that I am referring to – despite their questionable character – were casting reputation loopholes.

Minister Brown: There has been action taken against Mr Singh; in fact two of them. Both of them have had charges laid against them in addition to suspension. I do not really know Mr Qoma. I heard later that he was a reputational manager for the board or something. Allegations against Koko came after he became Acting GCE, about his stepdaughter’s company. Regarding Mr Khoza, I believe that I do not have the details of this because this is really an operational aspect and this Mabelane and the other fellow, I believe that they were suspended. And I also believe that McKinsey had a contract with Eskom and that it was a supply developer. They have a supply development group. When I realised that I lied to Parliament as in the case of Trillian because Eskom never told me that they paid Trillian directly. All these matters are before the board at the moment. All operational matters do not sit on my desk. I know that Mr Mabelane and Kalima and Koko are before the disciplinary panel and Mr Koko has to go to a disciplinary hearing. In fact, he is before the disciplinary hearing.

Rawula: That is fine Minister. Coming to the point of the R30 million scheme, the package for Mr Brian Molefe. Again, the evidence was led by the Reputational Manager about the R30 million scheme. When the board agreed under Dr Ben Ngubane, they wrote a letter to you for an endorsement, which you kept quiet about. You only acted after the Sunday Times broke the story and you then reacted and condemned it. Why did you wait until the Sunday Times published the news? Should I believe that if it was not reflected in the newspaper, you would have talked about it or could Molefe have walked away with a R30 million handshake?

Minister Brown: This matter is before the court at the moment and I submitted my affidavit to the court. I did not receive a letter. I have heard from Molefe that he did send a letter to my previous PA at the time; she was at maternity leave. But, having said that, my DG has written an affidavit that says that the memo - the way it happens in the department is that it comes to our registry and the registry sends it directly to the department and the department send it to various units and the units draws up a memo and then it comes back to me. The process takes about two weeks. What happened there, apparently, the process had got stuck at my DG and he has put up in affidavit to that effect in court.

Mr Rawula: You said that you are not acting as an obstructionist but we received a letter from you through the Committee’s Evidence Leader where you were questioning the credibility of the Committee and even questioned the approach of the Evidence Leaders in light of his questioning and even threatened him to report him to the Bar. Who had advised that? Why did you threaten the Committee for asking you to meet your constitutional obligations? We do appreciate that the Minister should account to the Committee when she is required to do so. Why should we receive a letter threatening us?

Minister Brown: I said it before that I will ask a question when I feel I need to ask and I should not be curtailed by anyone. You do not feel curtailed to ask me a question and I do not feel curtailed either. In fact, all the random questioning has nothing to do with Eskom as I expected, all questions are directed at me as a person. I was thinking that it is all about how to get to the root of the problems of Eskom and how to fix Eskom. This is my democratic right to ask the questions that I have asked. I feel that I should ask questions with regard to the process.

Mr Marais: My first question would be around Mr Brian Molefe who was previously the CEO and a Member of Parliament and currently, according to newspaper, in the army. He said that he visited you at your home and he discussed with you the early retirement and you said it is his own narrative that he discussed the matter with you. I want clarity on the same question starting with the same alphabet.

Minister Brown: He told me that he was resigning. That was his resignation. In fact we are going to court on the 29th on that matter.

Mr Marais: I need clarity for my purposes. But first I want to understand that you are aware that Eskom has a consulting programme to train in house staff and Eskom has a policy to use international companies in the training of staff. Are you aware of that?

Minister Brown: Yes.

Mr Marais: Actually, Eskom contracted McKinsey to do training but McKinsey contracted Trillian to do the training. It is very interesting for me because Trillian has no track record of training and Trillian has a director called Salim Essa. You previously referred to him this evening and I would like to ask the following question. Have you ever had an interaction with Mr Essa in your capacity as a Minister?

Minister Brown: I had no interactions.

Mr Marais: In September 2015, there was a consulting contract between McKinsey and Eskom and McKinsey was paid R18 million on this contact. Then in 2016, another contract was signed and was not put in effect. Again, in February 2016, there was a contract with Trillian. In March, McKinsey told Eskom that it would be working with Trillian as BEE partner. Trillian was linked to the Guptas in order to meet BEE requirements. In April 2016, Eskom compensated Trillian R30 million the same day Optimum Mine was bought. In August, Eskom paid – the astonishing amount which I cannot comprehend – R608 million to McKinsey and R235 million went to Trillian. This is a major amount pushed around between Eskom, McKinsey and Trillian. This is the next step perhaps which you were not informed on correctly and thus you have denied that there was a transaction between Eskom and Trillian. In February 2017, Eskom paid R349 million to McKinsey and R176 million went to Trillian. In July 2017, Eskom admitted to paying Trillian R500 million since 2016. Then Singh was suspended for the Trillian scandal. Both Molefe and Singh were seconded from Transnet to Eskom and I think you are part of the decision making in that respect. In July, Eskom admits to paying Trillian R500 million and Singh is suspended. Eskom admitted to lying about the legitimacy of the Trillian contract. It suspends and then re-instates Edwin Mabelane and Charles Kalima. And in October 2017, Mabelane and Kalima were suspended again, along with Thava Govender. If you link the dot from McKinsey who was contracted by Eskom but it was actually Trillian that was contracted; a company with no track record in training, but contracted on the basis of BBEE to do a work for them and then this secondment of Singh who was CFO that authorised the payment in Eskom. What is your take on this and the action that you will take to see to it that Mr Singh answers for this?

Minister Brown: It was very early when I stated my statement. We have set out what the roles are between us – the board, executive and shareholder representative. In fact, there have been short term investigations on Trillian and McKinsey matter. A number of people had been actually suspended. For me, it is not good enough. When I sat with SIU, it was the first issue that I wanted them to look at. I put this issue on top of others so that It could be resolved. I do not personally get involved in investigations but I instructed the SIU to get involved and there have been different disciplinary methods that have been adopted. I think that if Eskom comes tomorrow, they will tell you what they have done in that regard.

Mr Marais: If you hear about all these amounts that have been paid and Eskom was willing to pay McKinsey a billion, not a million. The problem in South Africa is that the burden of electricity is on all taxpayers and if you hear about all this financial mismanagement or misuse or fraud, then they have no empathy or sympathy. It is so sad that the Eskom company is built by taxpayers' money and it is supposed to have the interests of South Africans at heart. Along the line, Eskom has no executive or people on the board who really look at the interests of the people. You do not need to reply on that, it is a statement from our side.

Mr Gordhan: Minister, thank you for being with us so late. In the paragraph two of the second submission, you said: “I have never consulted with anyone on my executive functions. Not Tony Gupta or Salim Essa or anyone else”. In your executive functions, you have to consult the President? Have you consulted him?

Minister Brown: Yes.

Mr Gordhan: On what issues have you consulted him on and what instructions did you receive from him?

Minister Brown: With the President, I had a discussion on Eskom around IPPs and other issues falling in my portfolio and as well as the structure of Eskom

Mr Gordhan: Haven’t you explored the 7 March meeting to which Mr Tsotsi and Myeni were invited in Durban and when he gave instructions on who should be dismissed. You never asked why the President was there? You seem to be upset with the fact.

Minister Brown: I am upset that people will go and meet the President without my knowledge and I think anyone would be upset about it.

Mr Gordhan: Why are you upset? Were you not advised about it?

Minister Brown: I have not met yet with the President and Mr Tsotsi said this only today.

Mr Gordhan: Is this the first time you hear about the meeting.

Minister Brown: Yes.

Mr Gordhan: You are an activist and South Africans are expecting…

Chairperson: Mr Gordhan, when you speak to the Minister you should expect to hear a response from her and not the legal people behind her.

Mr Rawula: I think that consulting with legal advisors at the Inquiry has not been done consistently but rather by omission. Adv Vanara said that the legal advisor can advise on legal aspects but not on factual matters. The Minister must speak on her own. He has been consistently writing notes to the Minister on factual issues. A request should be made to the Chairperson if the Minister needs guidance.

Chairperson: I did not notice that. Adv Vanara should clarify the matter with regard to conversation between a legal advisor and a witness. A legal advisor can write a note and pass it the witness but refrain from interacting directly with interviewer.

Adv Vanara: The witness is under oath and can be advised on legal matters.

Minister Brown: Here are the notes I received from the advisors. Is that good or bad?

Mr Gordhan: That is bad.

Minister Brown: But this is not new information that I have received.

Mr Gordhan: I think that officials are required to remain neutral because tomorrow they may have another Minister, ask me and I will tell you. Your job is to serve the public and the state and a particular purpose. And you might not be too proud when the truth comes out as to what you have been serving. And the public is watching very keenly what is going on here. Just a bit of advice

You mentioned that your staff are professionals and they are good and honest people and I hope they are not on parastatal capture. We were trained by the movement that we all serve to survive interrogations by the security police. That is very good. Just for the record. On the question of Eskom board appointments, it is actually fascinating and intriguing, as board members you have Ms Nazia Carrim and I think she is still on board, who happens to be a member of Salim Essa’s family; Mark Pamensky who has a relationship with the Guptas; you have Viroshni Naidoo who was here yesterday with her husband who is closely related to Essa and the Guptas; you have Mariam Cassim, who used to work for Sahara Computers; Dr Ben Ngubane, who today, I believe, is a partner of Mr Essa in other business. As a public and as a Parliament, you expect us to believe that this board is genuinely professional who went through the process that has been indicated here. I think what we should do is invite those who are concerned with the short listing and ask how these list were compiled and how these people got on the list in such an orchestrated and organised way. You do not need to comment on this, Minister. What you need to comment on is the suspension of Matona. What is intriguing is the suspension of the CFO and the CEO which led to the Eskom’s downgrade and its financial record deteriorating. Don’t you have regrets retrospectively that you agreed to their suspensions?

Minister Brown: Let me speak about the board. Ms Carrim is no longer on the board.

Mr Gordhan: You do not need to address that. It was a statement. It was not a question to the Minister.

Minister Brown: All these people you have mentioned, none of them who are serving the board, actually.

Mr Gordhan: Address the questions, Minister.

Chairperson: Minister, you are under oath, can you address questions only.

Mr Gordhan: I asked a question on whether she has regrets.

Minister Brown: There are indeed four issues that led to the downgrading of Eskom. It was downgraded due to its financial instability. The financials did not deteriorate and I have given the date earlier on which R23 billion was coming, not from Eskom shares, but…

Mr Gordhan: From government; I want to help you.

Minister Brown: Yes, it was government shares in Eskom that were sold. I feel that Eskom got strong despite its financial liquidity being very weak. There are number of issues that weakened Eskom. The matter before us and at the time, when the board came in was a part of strengthening Eskom and I was happy by the fact that Eskom was strengthened.

Mr Gordhan: In October 2017, the CEO you appointed, Mr Johnny Dladla was suspended because he was implicated in the payment made to Trillian. Mr Dladla was then rotated back to his old job and replaced by an inexperienced man. Why did you agree to a policy of rotating CEOs and why was Dladla victimised?

Minister Brown: Mr Dladla came in as Acting CEO and he was not victimised. The board wanted to rotate him and I agreed.

Mr Gordhan: Mr Dladla was not rotated. He was appointed as CEO and when his departure was announced, the policy of rotation was announced at the same time.

Minister Brown: There is no policy of rotation.

Mr Gordhan: There is such a policy.

Minister Brown: The board said that they want to rotate executives – and I think that is okay – to ensure that many of them get the opportunity to lead the company.

Mr Gordhan: On Denel, you provided your own version. I want to refer to an affidavit submitted by the Director General of National Treasury, Mr Fusile, in a court action on the violation of Chapter 3 of the Constitution, initiated by Denel and DPE against Treasury and this affidavit makes reference to the meeting of 28 January 2016. The affidavit confirms that the business of Denel was weak. The Minister told Denel that they needed to meet certain preconditions but in the court of law, the Minister was not included as a respondent. In this case, the department felt that Denel was weak.

Minister Brown: My department compiled a memo. I have not seen it.

Mr Gordhan: If your problem is that you have not seen it, we can make it available to you or your staff can find it.

Minister Brown: That is not only my problem. Rather, my department provides me with the memo and the memo comes from the department, in particular, the manufacturing unit in this case, which could negotiate with your department at the time.

Mr Gordhan: Unfortunately I do not have a department.

Minister Brown: Well, your previous department.

Mr Gordhan: I do not want to hear about the process.

Minister Brown: The process is important. The whole department gets involved in getting a memo to me. I get a memo that tells that these are the facts before me and we think that these are good proposals. I gave the memo to my advisors and they say it is okay. Yes, I give them conditions and one of them was due diligence. The other condition was that it should be a sustainable company. There are number of issues involved.

Mr Gordhan: And the involvement of Essa did not quite matter in this?

Minister Brown: Mr Essa worked in Denel for more than seven years.

Mr Gordhan: I do not want to know his history. I am not interested. The fact is that Mr Essa was principal.

Chairperson: I want both of you to be patient with each other. Mr Gordhan, give a chance to the Minister to respond and Minister give Mr Gordhan a chance to ask a question.

Mr Gordhan: Despite information we have from Tsotsi which you have denied, you have been accusing Eskom of holding information. The question is whether there is a relationship between the chairperson and yourself?

 Minister Brown: No.

Mr Gordhan: So why don’t you get along with the two previous chairs, including Tsotsi?

Minister Brown: In fact, it is not true that I do not get along with them. I have a robust relationship with them and I will continue to do so.

Mr Gordhan: You said that you are deprived of information by Eskom and all that – do you mean that your relationship with Ngubane is slightly better. That is the perception you left us with.

Minister Brown: No. Sorry, if that is the perception I left with you. You heard it here when you read affidavits from previous board members. Indeed some information is kept away from us. That is the statement that I would like to make. It does not say anything about my relationship with the chairperson BUT speaks about the non transparency of the company.

Mr Gordhan: The Minister would like us to believe that she is fervently opposing corruption.

Minister Brown: Yes.

Mr Gordhan: The locomotive deal in Transnet where Essa walks away with R10 million for every R50 million locomotive. Did you look into that matter?

Minister Brown: Yes, the matter is being looked into. I do not have detailed information on it and it happened before my time. This is one issues I put before the SIU.

Mr Gordhan: It seems like that what we are confronted about allegations is denial, denial, denial. When my colleagues talked about Guptas, you kept saying blacklisted, blacklisted and Molefe was using the same term yesterday. Perhaps, it was coincidence. In terms of procurement registration, a company can only be blacklisted when there is a court decision. Am I right?

Minister Brown: Yes, you are.

Mr Gordhan: In the current situation where we have state capture, even of the prosecuting authority, you won't get a court decision because there will be no prosecution. So you don’t get any blacklisting.

Minister Brown: That is your opinion.

Mr Gordhan: I am asking whether you agree with me.

Minister Brown: I am not. In fact, it is not me who came up with blacklisting, but Dr Luyenge. Even though Mr Molefe used the same term, but I was responding to Dr Luyenge.

Mr Gordhan: So on the one side of the scale we have all the coal purchase controversies, the IT systems controversies, boards that are dominated by Gupta-linked people, suspensions of executives who are actually innocent, eventually the one who is actually implicated gets redeemed and comes back into Eskom. You have problems with chairs, particularly Mr Tsotsi, we have the articulation of section 217 of the Constitution on procurement as an important value system, if you like, that we need to subscribe to, but everything that we do seems to be violating that systematically. We say that we want more black companies to actually benefit from deals that Eskom makes, and yet a prominent and fairly large black listed company Exxaro - and I hope the evidence leader will bring us that evidence - is being victimised at the moment, according the information that I have. You have the Dentons report - the Dentons report was firstly locked up, Mr Molefe doesn't read it, although he is the chief executive who should actually implement the Dentons report, you have the ‘threat’ issued to Mr Tsotsi, you have the R1.6bn illegal guarantee given by the CFO of Eskom Mr Singh. You have the Denel chair - who actually attacked the National Treasury and the then minister publicly and there was no reprimand, but it is not surprising because he is listed in the Gupta emails as well. You have the prepayment that Mr Singh agreed to which eventually was used to buy these Optimum Holdings of some R600m. You have a fine of R2.1bn as we have heard on that mine reduced to R600m once Tegeta takes over those mines. You have the locomotive deal - all of that is evidence on one side. And on the other side as far as the public is concerned all we have is denials. I end my case, thank you.

Chairperson: Thank you, Mr Gordhan. Mr Tseli.

Minister Brown: Before Mr Tseli, I can go to the toilet.

Mr Shivambu: When I asked about Mr Essa, she responded that she does not know him, but she has acknowledged that Mr Essa worked for Denel for seven years. Can we know if she knows Salim Essa or not - so that we should know what information to put down.

Chairperson: The last time I checked with the Minister, she was going to the loo. Can you please go, Minister?

Mr Tseli: This R1.2 billion or so that McKinsey said is ready to pay back; have you been contacted on this particular issue?

Minister Brown: Eskom should be contacted because I have no procurement issues with McKinsey. They were procured by Eskom. It is Eskom they are paying back.

Mr Tseli: Earlier, there is that parliamentary question that you said you were misled on by Eskom. What measures did you put in place to address that particular issue?

Minister Brown: The corrective measures, there are procedures in all state owned companies. Where the parliamentary written question comes from Members it is directed to the unit and then it comes to me and then it goes to the unit and from there it goes to Eskom. I have a parliamentary official that follows the process. Eskom has its own process. They have an office. If it is a financial matter, it is signed off by the CFO, if it is a generation matter, it is signed off by my generation unit, and then goes to the legal unit. On the other hand, there are also disciplinary processes.

Mr Tseli: Yesterday, one of the board members, Ms Klein, wanted to resign as board member at some stage because there was a conflict of interest and she said that the Minister persuaded me to stay despite having declared a conflict of interest. Can you talk about that?

Minister Brown: It is a conflict of interest. I still remember the story quite clearly. She was serving on another board and there was legislation pending. The legislation could have made it difficult to serve on two boards and she chose to serve one board. I asked her to stay on because otherwise we could not correlate. Subsequently, I have appointed an interim member, which means Eskom correlates.

Mr Tseli: Earlier this morning we tried to understand how the 7 March 2015 meeting was convened by Dudu Myeni. I think you briefly spoke about it that Tsotsi was invited to the meeting; he went to the meeting and when he came back he tried to implement the outcome of the meeting. I was trying to understand why he could go there with knowledge of you as the shareholder representative and even when he came back he never tried to report to the shareholder. Rather he chose to implement the outcomes of the 7 March meeting until the other board members said let us call the Minister. Can you talk to that?

Minister Brown: I know the circumstances of the meeting between them; but I do not know who called the meeting, who was in the meeting, why there was a meeting. I feel offended that he did not tell me about the meeting. Generally, the board chair will tell me if they have a meeting with anyone, actually. If they have a meeting with the President, they will tell me these are the issues discussed, and so on and so on. I really do not know the circumstances of that meeting Mr Tsotsi has spoken about.

Mr Tseli: How did you come to know about that meeting?

Minister Brown: I came to know about that meeting through this sitting.

Mr Tseli: But concerns you raised about Mr Tsotsi attending the meeting and never reporting to your office and trying to implement the meeting outcomes. Surely you raised the same concerns I was raising with him?

Minister Brown: I haven’t. Look, I raise concerns with the chair so often if they are issues about what the chairs did, or I think that they might be compromising unnecessarily or I do not understand perfectly. I do raise them now and then with the chairs. I do not know about that meeting at all. I said it earlier that I heard Mr Tsotsi speaking one day on the radio and he said that I do not particularly like him or something; but that is not the truth of the matter because I work with all the chairs.

Mr Tseli: We have assumed that, perhaps, the relationship was facing some difficulties between him and yourself. I do not know.

Minister Brown: I do not think that the relationship between Tsotsi and I was really difficult. I was quite surprised to hear this on radio. Actually, the board initiated a vote of no confidence against him and this has nothing to do with me. There were a number of issues on which they had no confidence in him.

Mr Tseli: There was a meeting that took place two days prior to the 2015 SONA. Earlier, it was touched on, I think you said that he was interfering with the management of the company. I am interested in what kind of interference you were talking about?

Minister Brown: When I arrived I think Mr Tsotsi was a Chair since 2011. I have no executive chair people because I have an executive director in all state owned companies, especially Group CEOs. Mr Tsotsi was like a CEO with a fully-fledged staff, including drivers. I wanted to reduce that impact. In terms of law, I should not get involved in operational and procurement. It is the board who gets involved. The board chair will call the CEO in a meeting and this is how it is supposed to work. In essence, it was not working like that. I spoke to Mr Tsotsi that he should not be like that in the company as it was overreach. There was a lot of push from the public that something that must be done now. That kind of push made us find what we can do in terms of law. That was what the conversation was all about. In fact, when we do an induction workshop, I may say that that induction happened with Mr Tsotsi, actually, two board members raised the problem that the board had become too operational in the company and that was the first induction. Normally, I go to induction for two or three hours so that the board would be able to be inducted by my own department and so forth.

Mr Tseli: I want to comment without expecting a response on the concerns you raised earlier in your oral submission about people who were coming and make allegations. We would like these people who are being implicated to come here and state their stories. We are not yet at that stage where we can say whether all things that are said here are true or not. They should come here and assist the Committee so that we are able to get to the bottom of this. I appreciate the effort of the Minister to come here and assist the Committee. Thank you, Chairperson.

Chairperson: Thank you, Mr Tseli. Then, Mr Gungubele:

Mr Gungubele: Thank you, Chairperson. You know Minister, I have a challenge with your candidness in answering the questions and you should improve this in the future. All officials who we spoke to were in the 11 March meeting. They said that you were called there with regard to the suspensions. There is no dispute there among themselves; you said you were there, not because you were called, but because you wanted to discuss something else. I am not sure whether it is a load shedding or something else. You will have to correct me if I am mistaken. All the officials talked about you in regard to that meeting. It was a meeting succeeding the 9 March meeting where there had been discomfort and discontent about the suspensions. Surely, you needed to be there to talk about suspensions. All of them are saying that you spoke to them. Can you first comment on that one?

Minister Brown: I was called not to speak, eh, I do not remember about the suspension at all. The suspension was on the agenda but that was not the reason I attended the meeting.

Mr Gungubele: Why were you there?

Minister Brown: I was there to talk about the War Room and the suspension was a matter that was brought to my attention in that meeting.

Mr Gungubele: So you are saying that the suspensions were incidental whilst you were there for about load shedding?

Minister Brown: Load shedding? I did not say that. I said that I came to do a report. I came out of the War Room..

Mr Gungubele: Were you called?

Minister Brown: Yes, I was called to explain to the board members what was happening in terms of the War Room and I, myself, wanted to speak to the board because I wanted to deal with issues that we were facing at that time. One of the issues that they had on agenda was the suspension of four people.

Mr Gungubele: So when you get there you did not know about the suspension.

Minister Brown: No.

Mr Gungubele: Let me repeat, Minister, with due respect, that all the people who spoke earlier who were in that meeting are in agreement that you went there because you were called by the board – you do not need to respond because you made your point - and you also said that the suspension was not your issue and it was the issue of the board. You said that there were problems in Eskom and that information was not flowing properly and that there was a load shedding and, in other words, there was a totality or accumulation of problems. Which one came first? These concerns? Or the suspensions? What really happened?

Minister Brown: It happened in the War Room.

Mr Gungubele: Can you explain that?

Minister Brown: The issues that I have difficulties with or the War Room had difficulties with was the quality of information that was coming from Eskom. The fact is that Eskom was still dealing with the load shedding at the time. And it looked as if there was no solution in the future. It was that time I was saying that we will be having load shedding for three years. When I went to the company, I forget to raise, and I would like to raise it here, there was an issue of bugging in the main boardroom which was brought to us at that time as well; that was another issue; I should not be told later that I have not spoken about that one - that one other issue that was on the table.

Mr Gungubele: Let me walk this through with you: Your concern in the War Room was load shedding. This you communicated to management or board and said that management or board should do something about that. As a result, the board did something, and whatever they did, was their own initiative. Is that correct?

Minister Brown: Yes. In fact, I think someone has mentioned here that there was a set of minutes that said what the board was going to do. I do not have those minutes because I do not have access to them. Yes, we were in crisis; in a very serious crisis. That was the topic that we were talking about and I wanted them to have a deep dive for three months. It was ridiculous.

Mr Gungubele: What was missing was the load shedding plan?

Minister Brown: The sustainability plan that included the load shedding plan and financial sustainability plan.

Mr Gungubele: If my memory serves me well. Mr Molefe does not connect the War Room with the intervention into load shedding. Do you know that?

Minister Brown: I do not know that.

Mr Gungubele: Mr Molefe claims that the load shedding intervention was from his team rather than the War Room. Before we go to the plan, Mr Matona was the CE? Both in terms of the 2014 MOI and the 2016 MOI, is it you who appointed him?

Minister Brown: It is the board appointing him. The board’s appointees come to me.

Mr Gungubele: If you read it, Minister, in the 2014 MOI in terms of paragraph 13.3 which provides the process for the appointments of CEO and FD. It states that nominees are identified by the board and the shareholder representative appoints the CEO and FD from a shortlist provided by the board. So, you appoint. It is not the board that appoints. It is written here and we are going to debate this a second time. A CEO is your appointee. How can someone else go and suspend your appointee and this has no business to do with them? Let me say, and this is very important, that if this is your appointee, logically you have an interest in performance because it is only you who can fire this person. So you have an interest in the performance contract. Here, he was suspended by the board which did not appoint him. And now you are saying that it is not your business?

Minister Brown: My business? In fact, the issue is, let me just make this quite clear, I arrived in May 2014. The process of appointment of the CEO was on my desk. I had four names. It had to go back to the board. I had to make an appointment from four or three names. I cannot remember how many names there were. I have to make an appointment and had to go through process, to cabinet, and we did all of that.

Mr Gungubele: In the MOI, there is no cabinet.

Minister Brown: We do take it to cabinet.

Mr Gungubele: No. No. I am talking about the MOI because this is an incorporated institution. This is here to ensure that you comply with the principles of the Companies Act and that is fine. It also explains how the CEO is appointed. The bottom line is – despite whether you take the name to cabinet or not – the CEO is not appointed by the board, but by people who are higher than the board and these people start with you. And you are saying the decision to suspend is theirs and they have just told you. So they did not need to get your approval or your view on the matter? The narrative that you are putting across is that it is their ultimate decision to do so. You are saying do whatever and turn around Eskom. I am saying that this [CEO] is your appointee.

Minister Brown: It is my appointee and anyone appointed in the board become my appointment anyway. In fact, the board, eh, the process is what I am talking to. This is how the process works. The board makes a decision over its executives. There is a set of laws that govern this whole process. It is the Companies Act. It is the MOI. The MOI is a sort of an interpretation of the Companies Act because it comes from the Companies Act.

Mr Gungubele: Do you follow it?

Minister Brown: Yes, we follow it.

Mr Gungubele: If you follow it, the CEO will be your appointee.

Minister Brown: He is decided by me and he is guided by the board. I do not sit and tell CEO, go and do this. I just speak to the Chair and I say that the company should do the following: A, B and C. The Chair instructs the CE and the CE instructs whoever he or she has to instruct.

Mr Gungubele: Let’s come back to this. You said that the first time you heard about Mr Tsotsi and his meeting with the President on the performance of the board and so on is at this hearing. Did I hear you saying that?

Minister Brown: Do you mean when Mr Tsotsi went to the President’s house?

Mr Gungubele: That he had a discussion with the President about this. Is it the first time?

Minister Brown: Yes, Mr Tsotsi never came back to tell me about it.

Mr Gungubele: If he did not, it has been in the newspapers a long time about Mr President and Mr Tsotsi in this situation. So it is just an accident that you find out about it at this sitting now when it was reported on the radio that Mr Tsotsi had a discussion with the President and the President is concerned about this matter. And you are saying that you have never heard about the meeting of Tsotsi and President. The first time you heard about it is in this hearing?

Minister Brown: Mr Gungubele, today I heard it. I cannot remember it. I do not remember, unfortunately. I remember that he went to the house of the President. I do not remember the context. I am actually trying to understand why this is an important issue other than the fact that the four people I have spoken about. It is very sad that four people were suspended and it is sad that three of them did not come back.

Mr Gungubele: Let put it this way. It took five months before the load shedding took place after you were appointed and you are saying that there was no plan. And you are saying that it was not about load shedding plan but the sustainability plan. The suspensions could take a couple of months. You got appointed in May 2014, the suspension took place in March 2015 and the load shedding started in November 2014. What I am saying is that you have been a Minister since May 2014 and the suspension because of the absence of plan took place in March 2015. What was really happening in the course of those 10 months?

Minister Brown: Look, it was a 10 month period of absolute hell. We went through a period where we had load shedding but it was manageable.

Mr Gungubele: Without a plan?

Minister Brown: It was manageable because we survived month by month. Eventually, it was so serious that the President appointed the War Room led by the Deputy President. There were a number of departments involved in this War Room. We met every week to try to bring back the company. Look, I am a shareholder representative and I became more and more embarrassed by these facts.

Mr Gungubele: Within these 10 months, you were working with the belief that things will happen without a plan?

Minister Brown: We actually had a War Room which was trying to help Eskom to have a plan. The War Room was established exclusively to help Eskom get out of its problem.
Mr Gungubele: Who produced the plan?

Minister Brown: Eventually, we, look, shortly after, we got people appointed.

Mr Gungubele: Wait! When was that?

Minister Brown: I do not remember the date.

Mr Gungubele: It is critical, Minister, because we want to connect the suspensions, the sustainability plan, and the resolution of Eskom issues so that we can be able to align these and thus have a sense that the crisis was due to negligence or absence of leadership or total incompetence at a high strategic level.

Minister Brown: Very soon after that, we, you must remember, I mean, there was just a number of issues that were happening in the company because of load shedding, it became more and more strenuous to economy. There is a range of economic problems happening at the same time and there were a range of solutions taken at the same time. There was a War Room and IMC to help Eskom to be put together. One was to understand what the real problem could be. Yes, we know what the problems were but we were not in a good position to deal with problems. The big issue was that we were no longer using diesel because the primary energy price was very high. We were no longer using diesel. That is when the plan started kicking in.

Chairperson: Thank you Minister and thank you, Mr Gungubele: You have taken 21 minutes of your time. You know that your time is 15 minutes. Tomorrow, go to your caucus, members. Meeting stands adjourned and it is 2:00 am.