How Guptas made R659m in a flash

Eighty-two minutes – this was the amount of time needed for the Gupta family to score more than half-a-billion-rand from a cash-strapped Eskom in 2016.

The money, R659m from Eskom’s coal procurement budget, is alleged to have been used to subsidise the Guptas’ purchase of Optimum Coal Holdings from multinational mining giant Glencore.

Though details of the deal have since been revealed in the media, it was at the state capture inquiry on Tuesday that South Africans heard the extent to which internal standard procedures were flouted at Eskom to make it happen.

Testifying before deputy chief justice Raymond Zondo, the utility’s Snehal Nagar described the pressure his team was put under to push through a dodgy prepayment to Guptaowned Tegeta Exploration and Resources on April 13 2016.

Asked why he had gone through with it knowing that something was fishy, Nagar, in charge of the financials at Eskom’s primary energy division, described a culture of fear in the parastatal, where staff were fired for not following the instructions of management.

He detailed what should have happened in normal circumstances – a purchase acquisition was raised, the request forwarded for approval, the details and availability of funds checked and the request sent to a procurement manager who allocates a buyer.

All of this was done before a contract between Eskom and a supplier was drafted, he said.

Once complete, the contract was taken to a tender committee for approval before funds were allocated.

This process was not followed when it came to Tegeta.

Instead, Nagar said he received an e-mail from the head of his division, Ayanda Ntetha, on April 12 2016, which included a pro forma invoice (a preliminary bill of sale) for R659m worth of coal from Tegeta.

The next day, he allegedly received a call from Maya Bhana-Naidoo, a general manager in the office of then chief financial officer Anoj Singh.

Nagar claimed Naidoo had said the payment needed to be made by 2pm that day.

“Naidoo said she would chat to everyone to make sure they were on board.”

Nagar’s team acted on the payment after receiving an email from Naidoo on April 13 at 12.38pm.

The e-mail instructed that the payment be made by 2pm and included documentation outlining a decision by Eskom’s board tender committee at a meeting the night before to approve the deal.

The committee’s meeting came hours after the banks refused to give Tegeta a R600m bridging loan to buy Optimum.

“The team amended a purchase order of a Brakfontein [a Tegeta mine] contract to reflect an order of R659m.

“The payment to Tegeta was effected on the Brakfontein contract,” Nagar said.

It was Singh and former Eskom acting CEO Matshela Koko who signed off on the deal.

The inquiry will continue on Friday.