April 23, 2017 / 1:43 PM / 3 months ago

South Africa blocks Eskom from paying former CEO farewell package

2 Min Read

JOHANNESBURG, April 23 (Reuters) - South Africa's public enterprises minister has blocked power utility Eskom from giving its former chief executive a 30 million rand ($2.3 million) pension payout, the government said on Sunday.

Brian Molefe, who is largely credited with stabilising electricity supply following months of rolling blackouts, resigned last year after he was implicated in a report by the anti-graft watchdog on alleged influence-peddling.

Molefe has denied any wrongdoing.

"I have considered the Eskom board's reasoning in formulating the proposed pension payout and cannot support it," public enterprises minister Lynne Brown said in a statement.

Brown said the payout could not be seen as a performance reward, as Molefe had already received a bonus for his role in turning Eskom around.

"Nor is the proposed pension payout justifiable in light of the current financial challenges faced not only by state-owned companies, but by the country as a whole," she said.

Credit ratings agencies S&P Global and Fitch downgraded South Africa to sub-investment grade this month after President Jacob Zuma removed respected finance minister Pravin Gordhan.

Eskom's credit rating was downgraded afterwards, a blow to the utility as it is yet to complete work on two coal-fired power stations, years behind schedule and over budget, and as it plans to build nuclear reactors.

Brown ordered Eskom's board to meet with Molefe and present her with an "appropriate pension proposal" within seven days.

Molefe, now a member of parliament for the ruling African National Congress, took the reins at Eskom in 2015 as Africa's most industrialised economy endured daily power cuts, but soon implemented new maintenance policies to get more out of the nation's fleet of ageing coal-fired power stations. ($1 = 13.1238 rand) (Reporting by TJ Strydom; Editing by Dale Hudson)

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