Eskom and Gordhan clash over Andre de Ruyter replacement

The protracted search for Eskom’s new chief executive officer has raised tensions between the South African government minister that oversees the state utility and its board, according to people familiar with the matter.

Andre de Ruyter announced his resignation as CEO nine months ago, yet a permanent replacement hasn’t been named despite an ongoing energy crisis that is taking an ever-increasing toll on the economy.

A candidate put forward by the board was rejected by Public Enterprises Minister Pravin Gordhan, online publication News24 reported on Wednesday.

The board and its chairman, Mpho Makwana, have become frustrated that the selection process has been delayed because of demands from the minister, said one of the people who asked not to be identified because the matter isn’t public.

Some board members threatened to quit in the coming weeks if Gordhan rejected their recommendation, another person said.

Eskom said it reviewed 150 potential candidates in its global search for a CEO and had identified “a clear number one,” with two others as joint runner-up.

While the utility forwarded its preference to the government, it was deemed to have failed to meet a requirement in the company’s memorandum of incorporation to submit three names and its recommendation was sent back.  

“The board’s governance and strategy committee is applying its mind and working towards a speedy resolution,” Eskom said in an emailed response to questions. “Upon conclusion, the shareholder and Eskom will make appropriate announcements.”

Gordhan didn’t immediately respond to a request for comment. 

South Africa has been subjected to record power cuts that are implemented to prevent a complete collapse of the grid as Eskom struggles to meet demand from its old and poorly maintained coal-fired plants.

The government has vowed to end the outages, with President Cyril Ramaphosa appointing an electricity minister to drive its response to the crisis.

De Ruyter abruptly left Eskom in February after the airing of a television interview in which he linked ruling African National Congress officials to widespread corruption at the company. His position has been temporarily filled by CFO Calib Cassim.  

Plans to split Eskom into three operating units are also running behind schedule. While the regulator has granted trading and import-export licenses to the transmission unit, a number of steps remain before it can become operational.

They include the appointment of its board and consent from lenders for its separation into a stand-alone entity.