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Eskom faces a possible bill of more than R2 billion from Mpumalanga billionaire pastor and coal baron Joe Singh as “pecuniary damages stemming from the contractual dispute”.
This follows a recent court victory in favour of Singh’s Fentonia Colliery in the High Court in Middleburg in Mpumalanga.
Last Monday Justice Lindiwe Dorothy Vukeya granted a default order that the struggling power utility must fulfil the breached multi-million rands coal supply contract it had with Mpumalanga mining company Fentonia Colliery, owned by the Middleburg-based Joe Singh Group.
The respondents in the case were cited as Eskom, Minister of Public Enterprises Pravin Gordhan, his acting director general Kgathatso Tlhakudu and the Commission for Intellectual Property and Companies.
Eskom is currently in dire financial straits as a result of billions of rands lost to corruption, non-payment of electricity bills by ordinary consumers, big business and municipalities.
Efforts were underway in government to seek external sources of funding to rescue Eskom from collapse, including a highly-contested proposal to tap into government worker’s pension funds.
Singh has been dogged by controversy because of his business deals with Eskom. In 2017, he made a R500 000 donation to the ANC Youth League in 2017 in return for a “political solution” to his mining company Just Coal’s contractual problems with Eskom.
Judge Vukeya ruled on February 24 that Eskom had to honour the terms of negotiations concluded between Eskom and Fentonia in March 2015 – which had stalled and ended in a court battle following a contractual dispute over allegations that the quality of the coal supplied was substandard.
Under the agreement, Fentonia was to supply 10 380 00 kilotons of coal to Eskom, with an initial monthly tonnage of 60 000 kilotons from May 1 2015 to March 31 2016, and thereafter increase the supply to a total tonnage of 115 000 kilotons.
The Joe Singh Group said in statement that “the estimated pecuniary damages Fentonia has suffered due to Eskom’s failure to honour the terms of the said agreement are said to be more than R2 billion”.
Lawyers Mfundo Shabangu said the company was ready to continue supplying the “much-needed coal to Eskom”.
“We look forward to Eskom honouring the terms of the court order and their obligation in terms of summary record of negotiations.”
Eskom spokesperson Sikonathi Mantshantsha said on Friday the power utility was aware of the judgment. “Eskom did not participate in any litigation which led to the judgment. As Eskom is still studying the judgment, we are in no position to comment,” he said.
Singh on a winning streak?
Mining Weekly reported on Friday that, according to The Joe Singh Group, the senior public prosecutor had declined to prosecute Just Coal, a subsidiary of the company that had clashed with Eskom over the quality of coal supplied, which led to Eskom in 2017 laying criminal charges of fraud against Singh and his CEO Peet Erasmus.
The publication reported: “The senior public prosecutor cited ‘insufficient evidence for a successful prosecution’ as the basis for a decision to nolle prosequi the matter and lodged this at the station of origin.”
Eskom had also demanded R6.5 billion from Just Coal in damages.
In another matter relating to allegations of fraud against Singh, Pretoria High Court Judge Ronel Tolmay on February 7 ruled that some of the documents outlining Singh’s purchase of a property company, Lahleni Lakes Golf Estate were valid and binding.
The company owns a lucrative piece of land between Emalahleni and Middelburg in Mpumalanga.
However, businessman Ralston Smith, who represented himself in court and claimed that his signature in the transaction documents was forged, told City Press that he would be taking the matter on appeal to the Supreme Court of Appeals in Bloemfontein.
Last week Smith filed a notice for leave to appeal, and a few days later Singh indicated through his lawyers that he intended to oppose the application.
Singh went to court in 2014 to enforce the terms of his purchase of Lahleni Lakes Golf Estate, which owns a lucrative piece of land between Emalahleni and Middelburg in Mpumalanga. It had reportedly been earmarked for the stalled Ernie Els-designed R485 million golf estate development.
Early last month, Judge Tolmay rejected evidence led by Smith that his signature was forged – by means of a cut and paste – to enable his fraudulent resignation from Lahleni Lakes Golf Estate and the transfer of shares to Singh as the new owner.
Although Smith led evidence that his signature was forged in the document sent to the Companies and Intellectual Property Commission – which is subject to investigation by the commission following a court order in 2018 – the judge did not agree with his submission that his signature was also forged in other documents relating to the disputed sale of the Lahleni Lakes to Singh.
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