LATEST FINANCIAL NEWS
Eskom CEO’s exit: No coincidence Hadebe resigned now, says energy analyst
It is no coincidence that Eskom CEO Phakamani Hadebe decided to resign at this point in time, Chris Yelland, energy analyst and managing director at EE Publishers, told Fin24 on Friday evening.
Eskom announced Hadebe’s sudden resignation in a short statement earlier on Friday evening, saying he will leave the power utility at the end of July 2019.
“There are a whole lot of things coming together right now. Yes, it is a fact that Hadebe has had health issues relating to the stress and pressure of being CEO of Eskom,” said Yelland.
“We also know there will be a new Cabinet announced soon, something I think might also have played a role in Hadebe’s decision to resign.”
Yelland pointed out that Eskom is due to present its financials to the board on Tuesday and it has been reported in the past that Eskom is expected to post a loss of R20bn or more for the financial year ending March 31.
“That is a lot of pressure on Hadebe,” commented Yelland.
He added that, in light of the Public Protector’s report, released earlier on Friday, on the actions of Minister of Public Enterprises Pravin Gordhan, Hadebe might also have wondered whether Gordhan will remain as minister or not.
Furthermore, Yelland speculates that Hadebe likely also questioned his role as CEO and that as the minister representing Eskom’s shareholder.
“Because of the crisis at Eskom, the minister has taken a very hands-on role and that might have impacted the role of the CEO. For example, also look at the appointment of a technical task team by the Department of Energy,” said Yelland.
“Questions have been asked about what one month of such an investigation by ‘outsiders’ can produce that Eskom does not already know. Could that have made Eskom’s leadership wonder whether the minister trusts them?”
Furthermore, Yelland thinks another factor in Hadebe’s decision could also have been the appointment of a chief restructuring officer. Until then the roles and responsibilities of CEO, chief operating officer (COO) and chief financial officer at Eskom were clearly defined.
“The reason why the COO was appointed was to free up the CEO from operational responsibilities so that he could focus on strategy and a new deal and new business model for Eskom,” said Yelland.
“Then suddenly a chief restructuring officer is appointed, which could have made Hadebe wonder if he is being trusted to perform his role.”
Yelland pointed out that these are merely his speculations about what could have been the factors building up pressure on Hadebe to resign, given the context within which it took place.