Eskom CEO Brian Molefe announced on Friday that he would leave the State-owned electricity utility on January 1, 2017, but denied that the move was an admission of “wrongdoing on my part”.

The decision follows the publication on November 2 of the Public Protector office’s 'State of Capture' report, in which Molefe's relationship with the controversial Gupta family featured strongly.

The report contained cellphone records showing that, between the period August 2, 2015, and March 22, 2016, Molefe called Ajay Gupta 44 times and Gupta called Molefe 14 times.

It also “observed” that the sole purpose of awarding contracts to Tegeta to supply Arnot power station was to fund Tegeta and enable it to purchase all shares in Optimum Coal Holdings (OCH), a company owned hitherto by mining giant Glencore.

In addition, a hastily approved R650-million prepayment to Tegeta was held up as suspicious, as it appeared to have been used by Tegeta to buy all the shares in OCH shortly after bank funding was refused.

Madonsela made no findings, but recommended that President Jacob Zuma convene a commission of inquiry within 30 days, which should be led by a judge selected by Chief Justice Mogoeng Mogoeng. The commission should complete its task and present the report with findings and recommendations to the President within 180 days.

In a statement, Molefe said: “I go now, because it is in the interests of Eskom and the public its serves, that I do so.”

Nevertheless, he said it was a "matter of regret" that the report signed off by Advocate Thuli Madonsela "was prepared in haste to meet a deadline" related to her departure from office. "That her office continues, as all State offices do, and that any uncompleted function is completed by a successor in that office, was not a consideration in the report".

The resignation comes despite Molefe having received strong support from the board, with chairperson Dr Ben Ngubane having suggested earlier that such an outcome would be a "deadly blow" to the utility. In fact, in an angry outburst last week, Ngubane said it would be on Madonsela's head should Eskom "lose Brian" – a man he credited with helping to end load-shedding and with stabilising the organisation operationally and financially.

However, Molefe's combative manner had also raised hackles since his appointment to the post last year.

Besides his public spat with mining group Glencore, which precipitated the controversial acquisition of Optimum by Tegeta, Molefe also raged against the cost of renewables and opposed the signing of new contracts with renewable-energy generators. He also became a vocal proponent of the equally controversial nuclear tender and questioned why South African banks had closed the bank accounts of Gupta-linked companies.

Molefe also clashed with the media and analysts, at one point threatening to make it his personal mission to close down the publishing company owned by prominent energy commentator Chris Yelland. He later apologised, but Yelland continued to suggest, right up until last week, that he remained blacklisted from Eskom events.

In the immediate aftermath of the report’s publication, an emotional Molefe expressed deep unhappiness at the way Madonsela had handled the matter, while also mocking the use of cellphone records to track his movements, which led to the now infamous “Saxonwold shebeen” reference.

However, Molefe also gave the impression (particularly at the group’s interim results and less so at a subsequent board-led media conference) that he was seriously weighing his future at the organisation, primarily because he suspected that the proposed commission could take longer than envisaged to complete its work.

“The Public Protector has painted me with a corrupt brush. There will be a commission of inquiry established six months from now [and] we will get results maybe 18- or 24-months from now. During that period, my children will be taunted at school – your father’s corrupt, your father’s corrupt,” Molefe asserted.

In his letter, he repeated this point: “If such a body is indeed by law to be assembled, and carry out the task, it will not be for some time – as recent experience indicates. In the meanwhile the harm is done.”

Striking the more defiant tone for which Molefe is better known he added: “I am confident that, when the time comes, I will be able to show that I have done nothing wrong and that my name will be cleared. I shall dedicate myself to showing that an injustice has been done by the precipitate delivery of ‘observations’, following an incomplete investigation, which the former Public Protector has drawn back from calling ‘findings’. The truth will out.”

REACTION

Ngubane said the decision taken by Molefe was "regrettable but understandable".

"Since joining Eskom in April 2015, Mr Molefe and his executive management team have turned around the company’s operational and financial performance, with 15 months of no load-shedding, the impact of which has been enjoyed by every South African citizen," Ngubane added.

Eskom would soon announce interim leadership arrangements once these had been agreed with Public Enterprises Minister Lynne Brown.

For her part, Brown said she was "saddened" by Molefe's announcement, but that she respected his decision.

“I want to reassure the country that, as shareholder representative, I will work closely with the board to ensure that the company remains stable. I am confident that Mr Molefe leaves a strong executive team in place to continue to deliver on Eskom’s mandate and implementation of the turnaround strategy," the Minister added.

Meanwhile, Corruption Watch welcomed the decision, which it described as being "in the best interests of Eskom".

"The allegations against Molefe, both in the media and the State of Capture report, must however continue to be the subject of inquiry by the pending judicial commission of inquiry into state capture, and should also be investigated by the relevant law enforcement authorities," Corruption Watch added in a statement.

The Democratic Alliance (DA) welcome Molefe's decision to resign "in the face of most serious revelations against him by the Public Protector".

However, the party said it would be laying charges against Molefe in terms of the Public Finance Management Act and Prevention and Combatting of Corruption Act.

"The DA requested that Parliament’s Portfolio Committee on Public Enterprises summons Molefe as a matter of urgency so that he can tell the truth to South Africa about his relationship with the Guptas, under oath," the DA said, adding that it was "suspicious that he has resigned after we began the process of getting him to come clean under oath in Parliament".

United Democratic Movement president Bantu Holomisa said the "damning revelations in the report of the Public Protector on the State of Capture and the subsequent remedial actions therein, are unbearable".

"We hope that many others, like him, who are implicated by the report will do the right thing, and go home. Mr. Zuma must lead by example in this regard, and resign."

The official opposition also said that, despite Molefe’s protestations to the contrary, his resignation could be "seen in no other light than that of an admission of guilt".

Pan Africanist Congress of Azania hailed the resignation as a "revolutionary step", but said it was "disturbed" that Molefe would only resign in January, as an "immediate resignation" would have been more appropriate.

Nomura's Peter Attard Montalto argued that Molefe had "no credibility left after the Public Protector's report regardless of them being proven or not allegations".

However, Attard Montalto said he did not see the resignation as positive. "They will appoint someone equally as willing to facilitate rent extraction and ensure nuclear success and as long as the board is in place and other senior management nothing changes. If the CFO [Anoj Singh] is appointed CEO that is not positive and would be a sign of status quo."

Yet other commentators expressed their concern that group executive for generation Matshela Koko – who was leading the campaign against the signing of renewables contracts, while championing the nuclear cause – could replace Molefe.

"We need to understand however the rot in Eskom goes much deeper - the whole board needs to be replaced and there are many others there also implicated in the Public Protector's report," Attard Montalto wrote.