Eskom ex-CEO André de Ruyter under legal fire for private probe and security contract

Former Eskom CEO André de Ruyter is currently under investigation by South Africa’s Special Investigating Unit (SIU) for alleged maladministration during his time at the power utility. The investigation revolves around two key issues: De Ruyter’s private investigation into corruption at Eskom, which has faced criticism for its findings, and his involvement in a controversial R500 million security contract with Fidelity Security. The SIU has raised concerns about the legality and authorization of these actions, potentially leading to legal action against De Ruyter and others involved, including Business Leadership South Africa and George Fivaz Forensic and Risk (GFFR). The SIU’s investigation is ongoing, with a wider scope beyond just the security contract.

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Former Eskom CEO André de Ruyter could face legal action

By Bianke Neethling

Former Eskom CEO André de Ruyter is under investigation by South Africa’s Special Investigating Unit (SIU) for alleged maladministration during his tenure at the power utility.

The SIU’s investigations into De Ruyter concern two matters that took place while he was Eskom CEO — his private investigation into corruption at the utility and the Fidelity Security contract.

In 2021, during his tenure as Eskom CEO, De Ruyter initiated a private investigation into corruption at Eskom. It was intended to complement law enforcement investigations at the utility.

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From this investigation, forensic investigation organisation George Fivaz Forensic and Risk (GFFR) compiled a damning report on criminal activity at Eskom, implicating top government officials.

De Ruyter revealed some of these findings to the public in an interview with eNCA’s Annika Larsen earlier this year.

However, the report’s findings have since been criticised, with journalist Jacques Pauw claiming it “contained no facts” and was “effectively worthless”.

Special Investigating Unit (SIU) head Andy Mothibi told Parliament’s Standing Committee on Public Accounts that the SIU has not ruled out taking legal action against De Ruyter for facilitating this investigation.

The SIU has conducted a preliminary investigation into this report and De Ruyter’s role in it, which included interviews with GFFR and Business Leadership South Africa (BLSA) CEO Busi Mavuso.

BLSA contributed R18 million towards the report and appointed GFFR to investigate corruption at Eskom.

Adv. Andy Mothibi, Special Investigating Unit (SIU) head

Following their preliminary investigation, the SIU made the following preliminary findings, amongst others:

De Ruyter was not authorised to undertake the investigation.
Some of the information in the reports suggests that GFFR has had access to Eskom information. If this is confirmed, then GFFR will have to explain how it came to be in possession of said information.
GFFR conducted an unauthorised investigation into Eskom, especially in view of the parties to the contract.
The sourced funds were paid directly to the service provider (GFF, not to Eskom.
The SIU could not establish any procurement process followed in appointing GFFR.

“The former CEO did not have authority to investigate the affairs of Eskom [and] consideration should be given to holding the former CEO to account,” Mothibi said.

Despite the former CEO’s good intentions, the SIU believes “the manner in which he went about it was not consistent with his office and without informing the board, the SIU, DPCI, SAPS and executive authority, this is maladministration on his part”.

In addition, he said BLSA and GFFR should have reasonably known that they cannot investigate a state institution without the necessary authority. Therefore, the SIU will advise the board on whether they should also be held to account.

Mothibi said the SIU would be willing to “formally reach out to wherever [De Ruyter] is so that action can be taken” should it be necessary.

De Ruyter is currently working as a guest lecturer at Yale in the US.

Fidelity Security contract

Jan Oberholzer, former Eskom chief operating officer

The SIU is also investigating the Fidelity Security contract De Ruyter, and former Eskom COO Jan Oberholzer were involved in during their tenure.

De Ruyter and Oberholzer have been accused of supporting a deviation from Eskom’s payment policy concerning a controversial R500 million security contract with Fidelity Security.

Fidelity was granted a three-month contract at the behest of Eskom’s former head of security, Karen Pillay. The utility has since suspended her.

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The Association of Private Security Owners of South Africa (Tapsosa) initially alleged that Eskom flouted procurement processes in awarding an R500 million contract over three months to Fidelity.

They are demanding an inquiry into the tender processes Eskom followed. Tapsosa has escalated its demands to the relevant Parliamentary oversight committees and Electricity Minister Kgosientsho Ramokgopa.

The organisation called for people behind the contract, including Pillay, former CEO Andre de Ruyter, and former COO Jan Oberholzer, to be held accountable.

They also want an investigation into how the process took place and how an emergency procurement process was used to pick one provider – Fidelity Security Group.

Fidelity was handpicked for the contract as the tender was deemed an emergency and did not have to go through a transparent, competitive bidding process.

The contract covers Eskom generation units and their transmission infrastructure. It included land and air support with helicopter and tactical drone surveillance capabilities, specialised armoured personnel carriers, tactical intervention units, access and crowd control.

Eskom confirmed that the services were awarded in line with all its procurement procedures and the National Treasury directives for emergency services procurement.

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Fidelity said it will cooperate with any inquiry into the contract and is confident that all due processes were followed.

The SIU said it has commenced its investigation into this contract, and its scope will not be limited to the contract. It will, therefore, cast its net wider than just this one contract.

The SIU said it has requested and obtained the relevant documentation from Eskom concerning this contract. It has commenced with an analysis of this documentation and interviews with the persons identified.

“In the submission for a declaration of emergency, Pillay refers to ‘credible intelligence received’,” the SIU said.

“The SIU will address this question of credible intelligence, considering no intelligence report is attached to the submission.”