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Eskom chairman steps down

Zola Tsotsi. Zola Tsotsi. www.enca.com

Eskom has confirmed that its Chairman Zola Tsotsi stepped down on Tuesday, 31 March. “Eskom board chairman Zola Tsotis has agreed to part ways amicably,” said the power parastatal in its Media Desk Twitter feed.

Earlier, Tsotsi said he faced a vote of no confidence by the utility's board late on Monday, after being accused of acting improperly by suspending the chief executive. Dr Ben Ngubane has been appointed as the utility’s acting chairman after Tsotsi agreed to step down to allow the board to focus on the core issues facing the power parastatal, said the utility.

“Dr Ngubane thanked Tsotsi for the selfless decision he took in placing the interests of the company first,” said the Twitter feed.

Earlier this month, the utility announced that it was to commission an independent inquiry into the running of the business. At a media briefing, Tsotsi said that four executives at Eskom had been asked to step aside for the duration of the inquiry. Chief Executive Officer Tshediso Matona was among those asked to step aside. 

Tsotsi has been chairman of Eskom since 2011. Matona took office in September after former CEO Brian Dames stepped down in March last year. The personnel shifts have added to the utility’s operational and financial issues.

Bloomberg said that Eskom, which generates about 95% of the country’s power, implemented almost-daily rolling blackouts in February as demand eclipsed supply, with maintenance overdue at its aging power plants. Standard & Poor’s lowered Eskom’s rating to junk this month after Tsotsi announced the suspensions and started a probe into the state of the business, including under-performance of generation plants, delays in starting up new facilities, high costs and cash-flow problems.

“It’s such a mess -- I’m skeptical this opportunity will be used as an offramp from the crisis,” Peter Attard Montalto, a London-based economist at Nomura International Plc, told Bloomberg.

The power shortages are curbing economic growth, which at 1.5% last year was the slowest since a recession in 2009, as industrial and mining output is reined in and some new projects can’t get the electricity they need.


 

By: Kristy Jooste

Source: Bloomberg

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