Eskom Finances Imperiled by False Racism Allegation, Probe Finds

(Bloomberg) -- Eskom Holdings SOC Ltd.’s fired Chief Procurement Officer Solly Tshitangano endangered the company finances by making racism allegations against the the chief executive officer that he later retracted, an official investigation has found.

The allegations against CEO Andre de Ruyter were made in letters from Tshitangano to President Cyril Ramaphosa, the public enterprises minister, parliament, the National Treasury and a judicial investigation into state graft, Ishmael Semenya, an advocate hired by Eskom to probe the allegations, said in his findings. Tshitangano denied that he accused De Ruyter of racism in the hearing, Semenya said.

“This retraction by the CPO is startling,” Semenya said in the findings seen by Bloomberg. “The allegations could potentially harm Eskom’s financial status.”

Semenya’s clearing of De Ruyter, which was accepted by the Eskom board, may close a chapter that clouded the future of the CEO, who was appointed to turn around a company with more than 400 billion rand ($29.5 billion) in debt and an inability to meet South Africa’s power needs.

CEO Cleared

Tshitangano didn’t respond to requests for comment and Eskom declined to comment beyond a statement that said the CEO has been cleared by the probe.

De Ruyter, who has canceled allegedly fraudulent contracts and removed power station heads in a bid to improve performance, initially faced a racism probe from parliament after Tshitangano’s accusations. That was dropped when Eskom initiated its own.

A separate probe by advocate Nazeer Cassim into Tshitangano’s conduct, which led to him being fired, said Eskom’s board had displayed “weakness” and had defied “common sense” by starting the probe against De Ruyter.

In the wake of the allegations, De Ruyter has been vilified by Black business organizations and politicians.

“Despite knowing that these allegations of racism were wrong, egregious, false, baseless, and lacking any substantiation, the CPO did not publicly deny them,” Semenya said. “I could find no substantiation for the allegation that the group chief executive has conducted himself in any manner that would amount to racist practice.”

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