He flouted a number of rules to help Molefe secure his extravagant “golden handshake”. Scorpio obtained leaked emails from the state utility that outlined how pension fund officials were coaxed into dubious approvals relating to Molefe’s pension.
Former Eskom CEO Brian Molefe’s R30m pension was manipulated so that he could receive the maximum pay-off, new reports have indicated.
The leaked emails from Eskom indicate that Molefe started planning the “feathering of his retirement nest” at least as early as a year before his controversial exit in 2016.
Molefe was sacked from Eskom at the beginning of June following a brief return after serving as an African National Congress MP from February. He stepped down as Eskom CEO last year after his allegedly improper relationship with the controversial Gupta family came to light in the Public Protector’s State of Capture report.
But Molefe agreed to return to Eskom after Public Enterprises Minister Lynne Brown discovered he had been granted a R30m early pension payout, which she refused to condone.
The former CEO was only employed for 15 months at Eskom, but his pension cost was calculated as if he had worked there for 156 months, until the age of 63, and had a 10-year historical service record as an Eskom employee.
The emails also showed that Molefe was in fact “retrenched”, according to Eskom’s official records, to further advance his interests.
Scorpio reported that being retrenched immediately gave Molefe access to a third of his pension fund. The two pension fund experts Scorpio consulted said no other retirement or resignation option would have granted Molefe the same immediate access to his money.
Molefe was also apparently never eligible to be a member of the Eskom Provident and Pension Fund, because he was appointed on a fixed-term contract of five years, and therefore classified as a “temporary employee”.
It is understood Molefe’s pension fund irregularities was one of the concerns raised by Eskom external auditors, who reported two irregularities to the Independent Regulatory Board of Auditors last week.
Molefe has taken Eskom to the Labour Court concerning his pension and appointment reversal, while the Economic Freedom Fighters and the Democratic Alliance are continuing with their high court application regarding his reappointment, which has been postponed pending the Labour Court process.
When Brown commented that Molefe’s reappointment was a better value proposition for the South African fiscus, Molefe claimed he’d been on unpaid leave the entire term, even while being sworn in as an African National Congress MP.
A public outcry forced the inter-ministerial committee to rescind Molefe’s reappointment. Parliament’s portfolio committee on public enterprises also grilled Brown and the Eskom board over Molefe’s reinstatement.
Scorpio quoted Eskom informers, who said that Molefe started enquiries about his pension fund in November 2015 – two months after he was employed by Eskom on a fixed five-year contract.
In total Molefe’s contract came to only 60 months of employment, and that was before he left under a cloud.
Then three months before Molefe resigned, he instructed an Eskom human resources executive to calculate his pension benefits, according to Scorpio. The timing coincided with then Public Protector Thuli Madonsela’s information request for the State of Capture report she was working on.
Emails then show that the executive instructed the provident fund to calculate Molefe’s pension fund costs as if he would take early retirement at the age of 50 on December 31 2016.
Molefe admitted to Scorpio that he had inquired about retirement, stating that he “started contemplating early retirement earlier. Yes, I may have enquired. But I only took the decision in November. Out of curiosity, I enquired.”
He denied to Scorpio that his actions were fraudulent and said he made a “mistake” only in thinking he could take early retirement at 50. He pointed out that Eskom and the provident fund “also made a mistake”, aiding him in his error.
It also emerged in the reports that Eskom paid Molefe a “performance bonus” of R97 537.44 and afforded him an annual raise, backdated from April 2015. Molefe told Scorpio he could not recall the payments, which were made days after Madonsela published her damning State of Capture report.
And even after his tearful resignation, former Eskom board chair Ben Ngubane signed off on a salary hike for Molefe retrospective from April 1 2016, Scorpio reported.
Twenty days later, Ngubane also approved Molefe’s “early retirement” as if he were in fact 63.
Scorpio reported Molefe has been instructed by the Eskom board to pay back the money, including interest of more than R400 000.
“I’ve made a deal with Eskom that it would be paid back by November,” Molefe said.