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Jan Cronje
- Business consultant Nick Linnell was asked by the former chair of SAA, Dudu Myeni, to conduct a hastily arranged probe into Eskom in 2015.
- As part of the probe, Linnell recommended to Eskom’s board that the utility’s CEO and two other senior officials be suspended as a “precautionary” measure.
- Linnell has defended the suspension even though the executives never faced any allegations of wrongdoing.
Nick Linnell, the businessman tasked by former SAA board chair Dudu Myeni to conduct an inquiry into the affairs of Eskom in 2015, has said he decided that three senior executives needed to be put on precautionary suspension as their “mere presence” may have led to staff members at the power utility being intimidated.
Linnell, giving evidence at the judicial commission of inquiry into state capture on Tuesday, said that while the three senior executives – including Eskom’s then-CEO Tshediso Matona – faced no specific allegations of wrongdoing, they nevertheless had to be suspended while a proposed inquiry into Eskom took place.
Linnell, who worked as lawyer and magistrate in Rhodesia (now Zimbabwe) before moving to South Africa, according to his LinkedIn profile, described himself as a business consultant with over two decades of experience. According to UK company records, his nationality is British, while his usual address is the upmarket Cape Town suburb of Constantia.
He was set to be the “coordinator” for the inquiry, but was dismissed less than a week after the suspensions had been announced.
The abrupt and unexpected suspensions of the senior officials caused turmoil in early 2015, and directly contributed to the hiking of the utility’s borrowing costs. A week after the suspensions took place, Standard & Poor’s downgraded Eskom’s credit rating, saying the suspensions had “led us to have less confidence in the company’s corporate governance arrangement”.
Eskom’s former chairperson, Zola Tsotsi, previously told the inquiry that following the suspensions he faced calls from worried investors asking what was going on. His attempts at justifying the sudden suspensions to worried investors felt like defending the indefensible.
On Tuesday Linnell confirmed that he was asked by be a “coordinator” for the inquiry into Eskom following a meeting at then President Jacob Zuma’s Durban residence on March 8, 2015. As part of his work he drafted suspension letters, prepared board memorandums, crafted media releases and drafted the proposed terms of reference for the inquiry into Eskom. He said Zuma and the then-Minister of Public Enterprises Lynne Brown backed the probe. After the senior executives were suspended, Brian Molefe and Anoj Singh joined the power utility.
Quizzed by the commission’s chairperson, Judge Raymond Zondo on the need to suspend the executives, Linnell was adamant that they had to be suspended, even if there were no allegations of wrongdoing against them.
He said he could not explain how a fourth name – that of Eskom’s then-Financial Director Tsholofelo Molefe – was added to the list of to be suspend. The four were never faced any charges. Eskom later said the investigation cleared all four suspended officials of wrongdoing. Of the four, only one – Matshela Koko – returned to Eskom.
Linnell was resolute that they needed to be suspended.
“The three key players in the main departments needed to be removed because it was well know at the time that those areas were the areas which needed to be investigated because there were things wrong in those areas. At that time the country was suffering massive blackouts, sorry load shedding, but a potential blackout was possible,” he said.
“Now if we have to juxtapose the interests of three executives with the lives and the economy, these are choice one has to make and they are not easy and not necessary either right or wrong, but it is a balanced point of view.”
“My firm view at the time, that that was the necessary step”.
Linnell also noted that the final decision to suspend the executives rested with the board, and not with him.
While Zondo has not yet ruled on whether the suspensions were justified or not, he said on Tuesday that he
“I would have thought that, if the idea was to find a solution without any focus on wrongdoing, they should have been there, they should have continued with their jobs…” he said.
“As things stand I am still inclined to think there may not really have been a need [for the suspensions],” adding that he still needed to hear testimony from more witnesses which may change his mind.
Linnell, in his closing remarks, said that he had no idea at the time that those who were suspended would not return to Eskom.
The inquiry continues.
Bongani Ndlovu