Eskom chief resigns over South Africa graft scandal

The head of South Africa’s state-owned power company Eskom announced his resignation on Friday in a corruption scandal that has embroiled President Jacob Zuma.

Brian Molefe became the first person to step down after a report released last week raised allegations of corrupt links between Zuma, ministers, top officials and the Guptas, a wealthy business family.

“I have, in the interest of good corporate governance, decided to leave my employ at Eskom,” said Molefe in a statement, adding he would resign at the end of the year.

Molefe broke down in tears last week at a press conference where he denied any wrongdoing over accusations raised by the report drawn up the Public Protector, the country’s top watchdog.

The report included allegations that Zuma ensured the Gupta family won huge preferential contracts with state companies such as Eskom.

Cellphone records obtained by investigators showed that Molefe was at or around the Guptas’ home in Johannesburg 19 times between August 5 and November 5, 2015, and made scores of phone calls to Ajay Gupta.

The timing of Molefe’s contact with the Guptas raised eyebrows as it coincided with a Gupta-owned firm negotiating the purchase of a mine that supplies Eskom with coal.

“This act is not an admission of wrongdoing on my part,” Molefe said in his resignation statement.

He said he hoped to prove his innocence and that his name would eventually be cleared.

Economist Peter Montalto, from Nomura International, said Molefe had “no credibility left” after being named in the watchdog’s report.

“The rot in Eskom goes much deeper, the whole board needs to be replaced and there are many others there also implicated,” Montalto said.

Molefe was appointed Eskom CEO in August 2015, following the suspension of his predecessor Tshediso Matona.

The firm has had a series of leadership changes in the past five years, while the country suffered months of regular blackouts last year.