FORMER Eskom acting CEO Collin Matjila was appointed to the post last year despite a forensic audit commissioned by the Congress of South African Trade Unions (Cosatu) implicating him in irregularities.
The forensic report by auditing firm SizweNtsalubaGobodo (SNG) will be discussed at a special sitting of Cosatu’s central executive committee this month, federation president Sdumo Dlamini said on Thursday.
The report was finalised in February last year and Mr Matjila — who was CEO of Cosatu’s investment arm, Kopano Ke Matla — was appointed to Eskom a month later.
In April it emerged that Mr Matjila was not the first choice for the interim CEO position, but the board opted for him after then public enterprises minister Malusi Gigaba rejected its preferred candidate.
The executive will decide on the action to be taken against those implicated in the report.
The report is also critical of Cosatu general secretary Zwelinzima Vavi, but its findings against Mr Matjila are more severe.
The report details the events surrounding a Financial Services Board (FSB) investigation into compliance by Kopano Financial Services — a subsidiary of Kopano Ke Matla. Kopano Financial Services was a pension fund administrator which dealt with, among other things, tracing beneficiaries of unclaimed funds.
The FSB had found that Kopano Financial Services failed to meet the requirements of its own administration system and recommended that its licence be withdrawn. At the time, Mr Matjila challenged the report and the FSB’s recommendations. SNG recommended that Cosatu seek legal advice on the appropriate corrective action to take against Mr Matjila for his apparent failure to handle the FSB report in an open and transparent manner. It also recommended investigating allegations of Kopano Ke Matla’s involvement in the misappropriation of funds, as suggested by the FSB report. The FSB report showed that millions were allegedly missing from employee provident funds.
The SNG report also dealt with the sale of Cosatu’s old building and the purchase of its new headquarters in Braamfontein.
It said there was no evidence that Mr Matjila had negotiated when acquiring Cosatu’s building for R50m and that it had "overpaid" by R6.3m. No due diligence or valuation was done before the building was purchased, it said. The auditors also noted that the seller of the building had acquired it in the same year that it was sold to Cosatu, 2011, and it was bought for R33m, but sold to the federation for R50m. The SNG report recommended that Cosatu seek legal advice on the "appropriate corrective action" against Mr Matjila for the overpayment for the new building; his apparent failure to negotiate the price; and his failure to perform the due diligence or a valuation. It further recommended that Cosatu allow a qualified tax auditor to determine the tax implications of the purchase of the new building.
On the sale of Cosatu’s old building, the report recommended that the federation seek legal advice against Mr Matjila for agreeing to sell it for R10m, when its market value was R19.5m. There was no proof that negotiations had taken place; the sale had not been advertised and no due diligence or valuation had been carried out.
Cosatu, which is cash strapped, lost about R16m in the deals.
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