Eskom CEO stays, chairman quits as struggle unfolds

By Agnieszka Flak

JOHANNESBURG (Reuters) - The resignation of South African power utility Eskom's chairman and return of its chief executive signalled an end to a leadership drama that erupted last week, but analysts say it could unnerve foreign investors.

Eskom Chairman Bobby Godsell had announced chief executive Jacob Maroga's resignation to the utility's staff last Thursday, but the chief executive returned to work on Monday, an Eskom spokesman confirmed.

In a dramatic turn of events, Godsell himself stepped down on Monday, the department of public enterprises (DPE), which oversees Eskom, said.

"Mr. Godsell has resigned. The minister received his letter this morning," said Ayanda Shezi, a spokeswoman at the DPE.

Analysts said the management crisis should have been resolved within the board, without dragging the debate across the local media and giving the impression that the crucial entity lacked the top management it needed.

Ulrich Joubert, an economist at Kruger International, questioned whether Godsell's resignation reflected political pressure, which in turn could affect investors' willingness to fund the utility, already struggling to raise the billions of dollars it needs to fuel its expansion.

"International investors don't like political intervention ... if Godsell resigned because of political interference in the managing of the business, then it's bad for Eskom and they will have to pay more to get the funding they need," he said.

Minister for Public Enterprises Barbara Hogan, under whose jurisdiction Eskom falls, said last week that she was trying to resolve a breakdown in relations between the board and Maroga.