South African power utility Eskom Chief Executive Brian Molefe said on Friday he would step down in January, a week after he was implicated in a report by the anti-graft watchdog on allegations of influence peddling.

Molefe said although he was stepping down, this was not an act of admission of wrongdoing on his part.

Read Full Letter: /files/BMResigns.pdf

Corruption Watch said it welcomed Molefe’s decision to resign: “The organisation regards this resignation as being in the best interests of Eskom. Its prominence as a major state owned enterprise requires that the public has confidence in its operations, functioning and leadership.

“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 also emphasises that any alleged irregular or criminal conduct on the part of Molefe was not possible without the consent of the board of Eskom, specifically the Chairperson of the Board, Dr Ben Ngubane. The organisation urges the members of the board to consider whether their continued leadership of the parastatal is in fact in the best interests of Eskom.”

Nomura Economist Peter Attard Montalto had this to say on Molefe’s resignation:

First head to roll. Put simply he had no credibility left after the PP report regardless of them being proven or not allegations.

Brian is the fallen angel for investors coming out of Transnet as a hero and now implicated in alleged grand corruption and rent extraction by the PP report. In a way its sad, in a way its not. He ultimately was successful because he could navigate the patronage realities of the ANC but it has caught up with him.

We need to understand however the the rot in Eskom goes much deeper – the whole board needs to be replaced and there are many others there also implicated in the PP report.

I would expect someone similar to be appointed.

I do not see this as a 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 is appointed CEO that is not positive and would be a sign of status quo.

The last ‘good’ CEO (Tshediso) was out after just a few months because he was too clean. They won’t make that mistake again. The question is if we get someone obviously ‘dirty’ or someone (like Brian) who on the surface looked fine but was allegedly turning the mechanism of patronage beneath the surface. The level of scruitny suggests latter is most likely but lets watch see.