State power utility Eskom on Wednesday confirmed that it had recovered the sum of R30 million that was unlawfully paid out to the Eskom Pension & Provident Fund (EPPF) for the benefit of former CEO Brian Molefe in 2016.
The millions were apparently paid to the EPPF at the time to “boost” now 56-year-old Molefe’s early retirement pension payout.
The move to return the funds to the cash-strapped utility came after Judge Norman Davis of the North Gauteng High Court in July ruled in Eskom’s favour and reaffirmed a prior 2018 high court judgment that Eskom should be repaid the millions.
In his ruling, Davis ordered the EPPF to repay the total amount of R30.1 million, with interest, as well as the amount of R1.3 million – Eskom’s employer contributions on behalf of Molefe – also with interest.
Additionally, Davis ordered the tainted former CEO to pay the EPPF an amount of R9.8 million which accounts for a lump sum of R7.8 million, pension payments totalling R185 161 up to October 2019 in addition to taxes of R2 million that EPPF had paid to Sars.
According to previous Moneyweb reports, Molefe resigned as Eskom boss in 2016 to become a member of parliament for the ruling party ANC, having fulfilled the role of CEO of Eskom for just 15 months. Molefe’s exit coincided with the release of then Public Protector Thuli Madonsela’s State Capture report in which Molefe was fingered for participating in corrupt activities at the state utility.
According to EPPF rules, Eskom employees younger than 55 cannot take early retirement, at the time of his retirement Molefe was 50.
Apart from the age discrepancy, Molefe was employed as CEO on a fixed-term contract and therefore could not participate in the pension fund.
However, moving on false understandings of the rules, Molefe, who was appointed at Transnet before Eskom, transferred an amount of R4.3 million he had received from the Transnet retirement Fund to the EPPF. When Molefe resigned from Eskom, the utility questionably “purchased” a further 13 years of services amounting to R30.1 million, despite Molefe working for the utility for less than two years.
Upon retirement, Molefe chose to receive one-third of his pension benefits as a lump sum, all of which Molefe, together with the EPPF, has now been ordered to pay back.
Molefe finally charged
Molefe, along with former Transnet executive Anoj Singh, finally appeared at the Palm Ridge Specialised Crimes Court in Johannesburg at the end of August on charges related to fraud of R398.4 million as well as corruption at ports and logistics giant Transnet.
Singh and Molefe appeared beside Regiments Capital directors Niven Pillay and Litha Nyhonhya. The four were granted R50 000 bail each and were asked to hand over their passports.