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Eskom organised payment to Tegeta of amount needed to buy Optimum mine

Ajay Gupta.
Ajay Gupta.

Just hours after Tegeta admitted it was R600-million short of the purchase price to buy the Optimum coal mine‚ Eskom convened a late night meeting to approve the payment of R586-million to the company.

Testifying in the parliamentary inquiry into state capture at Eskom‚ business rescue practitioner Piers Marsden said that in April 2016 a deal was struck for Tegeta to acquire the coal mine‚ which was in business rescue.

The mine’s sole customer was Eskom and it had been placed under business rescue after Eskom imposed a R2.1-billion penalty on the mine for supplying sub-standard coal.

After Optimum was placed under business rescue Tegeta made an unsolicited bid through KPMG to buy the mine‚ but the business rescue practitioners initially decided to sell to a different company: Pembani. However the sale to Pembani fell through. A deal was then reached to sell to Tegeta.

On April 11‚ Tegeta executive Nazeem Howa called Marsden to a meeting where he indicated that they were R600-million short of the purchase price‚ which was due to be paid two days later. He requested Marsden to approach a consortium of banks in a bid to finance the shortfall.

Marsden said he met with the banks that afternoon but they were not prepared to fund the shortfall. He said he relayed this decision to Howa around 3pm on that Friday afternoon.

The funds were however paid on time and the mine was acquired. Marsden said in June he saw an episode of Carte Blanche in which it was indicated that Eskom had made a pre-payment for coal to Tegeta totaling R586-million‚ during a hastily convened meeting at 9pm on April 11.

In an interview with Carte Blanche‚ Howa said the pre-payment had been made because the coal mine was in business rescue and certain machinery needed to be purchased.

Marsden however testified that none of the R586-million was paid to Optimum Coal Mine -- so this would not have resolved its financial woes. He said while there was machinery required‚ it was not to the quantum of R586-million.

He approached the directorate for priority crimes with the information because “I was mindful of the meeting on April 11 in which we were led to believe they were R600-million short and that an amount which was relatively similar was approved on the same day. The quantum and timing required further investigation‚” he said.

Marsden said the pre-payment had been made to Tegeta for the coal even though it was not yet the owner of the mine.

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