Former president Jacob Zuma personally stepped in to force former Eskom CEO Jacob Maroga onto a Board that had lost confidence in him, the State Capture Inquiry hears.
Then president Jacob Zuma allegedly irregularly stopped the Eskom Board from implementing and announcing a collective decision confirming Jacob Maroga’s resignation as he pushed back from the highest office in the land – scolding former Public Enterprises minister, Barbara Hogan, several times in the process.
His untoward conduct over a period of several weeks in 2009 triggered a series of crises for the power utility and ultimately served to embolden Maroga to such an extent that he later penned a letter to Hogan, the Board, the Eskom executive and two parliamentary committees in which he announced his retention as CEO and de facto declared that he was accountable to Zuma and no one else.
Following Zuma’s persistent push-back against his departure, Maroga arrived back at Eskom having sent the letter in which he stated among other things: that he affirmed his status as the CEO and a director of Eskom; that the shareholder “at the highest level” had confirmed that any action against him must be requested and approved by the “shareholder” (Shareholder” in this instance refers to the president).
Maroga also informed the recipients of the letter that all “unauthorised” Board decisions, including that in which his resignation was accepted, were now rescinded.
Said Hogan: “This letter was almost a declaration of independence from the Board or the Minister…stating that any decision about him will have to be done with the consent of the President.”
She said this was a complete flouting of everything relating to corporate governance and a complete arrogance about his position.
“It was in effect a CEO gone rogue on the understanding that the President would back him.”
Hogan said that she and her deputy, Enoch Godongwana, were completely angered and devastated by what had transpired.
Testifying at the State Capture inquiry, Hogan said it was clear that Zuma had encouraged Maroga to believe he was above process and personally accountable to the president.
This damning testimony implicating Zuma in efforts to rescue Maroga from a controversial resignation, came on the back of Hogan’s revelations on Monday about a similar debacle involving Transnet executive Siyabonga Gama.
For a second day in a row, she put Zuma’s fingerprints all over her testimony before the State Capture inquiry where she has been providing shocking details of his direct hand in irregular appointments at key state-owned companies.
It was seemingly Hogan’s unwavering insistence on due process, corporate governance and compliance with the Companies Act and the PFMA that saw her go up against Zuma just five months into her job as the country’s former public enterprises minister in 2009.
In October that year, following a heated Board meeting, a frustrated Maroga walked out of a room at an Eskom break-away strategy session, announcing his resignation.
The Board, which had performance issues with him anyway, immediately deliberated and agreed to accept and this decision was communicated to Maroga on the same day.
But the next day, Maroga did an about-turn when he walked into a meeting between then chairman, Bobby Godsell and Hogan and handed them a letter in which he denied having resigned.
After a heated exchange between Godsell and Maroga in the presence of Hogan, she walked across to a room where the rest of the Board was sitting.
She enquired from each individual member their view on the resignation and each one confirmed the sequence of the events details to her by Godsell.
There was an impasse and over the next few days Hogan tried to mediate and ultimately offered Maroga the option of walking away with dignity.
The Board meanwhile was preparing to address the media to communicate Maroga’s departure but having just informed senior management, Hogan received a call from Zuma, conversation that blocked the announcement.
Zuma, upon learning that the Board had announced Maroga’s resignation to staff, called Hogan and asked “You’ve got to stop it. Tell them (the Board) they have to stop it now.”
“I tried to speak (and) reason with him. He told me he did not have time, (that he) was in transit on his way to Mozambique and suggested I call in half an hour.”
“I tried to call, he just never answered my calls.”
She then spoke to then deputy president Kgalema Motlanthe who was acting president in view of Zuma’s absence and told him that Zuma had given her an instruction to stop a process which she did not believe was within her power to do so.
She had no choice and called Godsell to tell him of Zuma’s call and the media briefing was cancelled –the press already at Megawatt Park.
Godsell, Hogan testified, said if it was the president’s instruction, it could not really be ignored.
“Everything went ballistic, in parliament, every commentator…(were shouting) ‘This is Eskom, who is the CEO, why is the minister not informing us, why is the Board quiet. It was a complete and utter nightmare and should not have happened. Issues were so profound from a Constitutional perspective, there was no time to think things through,” Hogan said.
She then requested to see Zuma and was told to meet him at his official residence. He gave her 10 minutes, said he didn’t have time and would make more time later in the day on the sidelines of a meeting in Kempton Park.
She went to Kempton Park and waited but Zuma never called.
After registering her disapproval with Jessie Duarte who worked in the presidency at the time, she was invited to a meeting with Zuma that Sunday.
He didn’t want to discuss anything and announced that Maroga would come back.
She said Zuma basically said: “This is the deal. I will confirm Maroga back as the CEO. He will come back to his office and he will write his(side) of the story and the Board will write their story and then I (Hogan) would determine the merits of each case.” The parties were in disagreement about whether Maroga had in fact resigned.
Hogan said she was not happy and tried to explain to Zuma that she could not really adjudicate the issue. She suggested that the information be relayed as Zuma’s instruction as she feared it would have been invalid and outside of her powers to have interfered with a Board decision.
“I felt the president was trying to put me in a position to issue an instruction that I knew the Board absolutely did not agree with.”
“Zuma agreed that I would go and meet with the Board and that he would meet with Maroga.”
The Board was dismayed but agreed on condition that they could meet Zuma to explain the terms for Maroga’s re-appointment. Zuma agreed.
That night while the Board thrashed out its communication plan around the debacle, Hogan got another call from Zuma. This time, to inform her the deal was off as Maroga was not amenable to taking leave upon his re-entry as the Board had requested.
“All this was enormously embarrassing for me as a minister. We were once again left without a decision.”
This meant the Board could not communicate and provide clarity around Maroga’s status to the public.
“I had no understanding of what was meant to happen. It was now a very serious crisis,” Hogan said.
Board chairman, Godsell threw in the towel and resigned saying he could no longer take responsibility for the mess.
Then Zuma called me to say he had given Maroga permission to return to his position at Eskom.
“I said Mr President that is not going to solve anything. You’re now using your authority above the Board.”
He nevertheless said, I have given him permission to go back.
Hogan said he had not discussed this plan with either Cabinet or the Board.
Maroga’s undoing in the end was the very letter in which he declared his political backing from Zuma. Godongwana took this missive to a meeting of senior office bearers at the ANC’s headquarters, Luthuli House, telling them: “See what you have done.”
Hogan said the next day Maroga was contacted by Zuma who then told him to leave office –that he would only be able to return on Hogan’s authority.
Brian Dames, then a senior manager and an experienced engineer at Eskom, was appointed as CEO.
Hogan’s testimony continues.