The Gauteng High Court in Johannesburg has convicted and sentenced two men linked to a multibillion-rand corruption scheme at Eskom’s Kusile Power Station, with one receiving a wholly suspended sentence and the other facing five years behind bars.

Michael Lomas, a former executive advisor and chairman of Tubular Construction Projects, and businessman Hudson Kgomoeswana appeared in court last week where they entered guilty pleas following a plea and sentence agreement with the State.

Lomas pleaded guilty to 34 charges of corruption, as well as fraud and theft. The court sentenced him to 15 years’ imprisonment, wholly suspended for five years on condition that he does not commit fraud, theft or corruption-related offences during the suspension period. The court considered his age, ill health and remorse when handing down the sentence.

Businessman to serve time

Kgomoeswana pleaded guilty to one count of corruption, 18 counts of money laundering and 15 counts of contravening the Tax Administration Act. He received a 15-year sentence on corruption and money laundering charges, with 10 years suspended for five years, and an additional five-year sentence for tax offences. The sentences will run concurrently, meaning he will serve an effective five-year prison term.

He also agreed to the confiscation of assets valued at over R2.4 million. The court heard that Kgomoeswana had retained R757 000 for facilitating corrupt payments through his company’s accounts.

How the scheme worked

The corruption involved bribes totalling over R2.6 million paid between February 2015 and April 2017 to secure work for Tubular Construction Projects at the Kusile power station. The scheme centred on the fraudulent awarding of contracts for air-cooled condenser units.

An initial R745 million contract was awarded to Tubular Construction Projects in April 2016. State prosecutors allege that irregular contract modifications and cost escalations eventually exposed Eskom to losses totalling approximately R1.4 billion.

Money was funnelled through third-party entities, particularly Kgomoeswana’s company, Babinatlou Business Services CC, which allegedly acted as a slush fund to facilitate bribe payments. The funds were reportedly used for personal expenses including luxury vehicles, property purchases and funding an MBA degree.

Two former Eskom officials still face trial

The two convicted men were part of a larger group facing charges linked to the scheme. Two former Eskom executives, Frans Hlakudi and Abram Masango, continue to face trial proceedings.

Hlakudi, a former senior manager for capital contracts at Eskom, and Masango, a former group executive for group capital at Eskom, are each accused of receiving approximately R30 million in bribes. They allegedly used their positions to ensure Tubular Construction Projects won the contract.

In May 2021, the Gauteng High Court granted the Investigating Directorate an order to seize assets worth R1.4 billion belonging to those implicated in the case.

Lomas was extradited from the United Kingdom in September 2024 to stand trial.

Eskom welcomes convictions

Eskom welcomed the convictions as “another important milestone in the ongoing and unrelenting efforts to hold accountable those who sought to unlawfully enrich themselves through the misuse of public funds”.

The power utility acknowledged the collaborative work between Eskom, law enforcement agencies and other stakeholders whose efforts contributed to securing the convictions.

“The organisation remains an active participant in coordinated initiatives led through the National Joint Operational and Intelligence Structure, the Energy Safety and Security Priority Committee and other government-led structures established to combat fraud, corruption, theft and related criminal activities,” Eskom said.

The utility added that whilst these matters relate to conduct that occurred in previous years, it continues to strengthen its governance framework, procurement oversight, internal controls and investigative capabilities as part of its broader turnaround and long-term sustainability objectives.

Eskom also remains committed to supporting efforts aimed at recovering losses arising from fraud and corruption where appropriate and in accordance with applicable legal processes.

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