A company linked to President Jacob Zuma's adviser on energy scored a R149-million contract at Eskom.
Seven months after Silas Zimu's appointment as Zuma's adviser on energy, Cape Gate Marepha, a company at which he is a nonexecutive director, was awarded a contract to supply Eskom with wiring.
Zimu's position placed him in direct contact with Eskom.
The deal came to light after notes from auditors conducting an ongoing auditor-general's audit, flagged a sample of 12 deals done with state employees without declarations.
The deals, which total more than R1-billion, were concluded in 2016-17. The officials said these contracts had outstanding declarations.
Zimu has been Zuma's adviser since July 2015. He was flagged by the auditor-general for his position as a board member of Mangaung power utility, Centlec.
He has been a nonexecutive director at Cape Gate Marepha since 2006.
Part of Zimu's mandate as the president's adviser on energy was to participate in the technical war room appointed by the cabinet in 2014 to deal with the electricity crisis.
Eskom denied yesterday that there was an audit under way at the power utility, but Sunday Times has seen spreadsheets detailing audit progress.
The Presidency said this week that it was not aware of Zimu's dealings with Eskom and would "talk to him" about this.
Zimu yesterday downplayed possible conflict, saying he was a nonexecutive director at the company and was barely active.
He said he had resigned from Cape Gate Marepha in November, but had not submitted a resignation letter because of his busy schedule. "The letter is on my desk ... I asked my PA to check for the next board meeting, so I can formally go and table my resignation and thank them," he said.
The Department of Public Service and Administration has passed public service regulations that prohibit state employees from doing business with the state or its companies. Political advisers, unlike public servants, are not affected by the regulations but still need to declare their interests.
William Gumede, professor at the University of the Witwatersrand's School of Governance, said cases like Zimu's formed part of his teachings on conflict of interest to MPs from all Commonwealth countries.
"I haven't seen the documentation on this, but this is actually a typical example of conflict.
"If you are an adviser you are in a conflicted situation even if it's not under the public service regulations," said Gumede.
In the war room, we were dealing with Eskom issues and some experts in that war room were even linked to Eskom directly as suppliers
"The fact of the matter is you advise, you get money and you can't now turn around the corner and have a company doing state business in the same sector.
"If you look at the last 10 years of the auditor-general's report, you will see that the majority of corruption happens because of state employees doing business with the state. That really is the issue," he said.
This latest revelation comes as Sunday Times reported recently how another Zuma adviser, lawyer Michael Hulley, may have been involved in the South African Social Security Agency's social grants payments debacle.
Presidency spokesman Bongani Ngqulunga told Sunday Times they were busy looking at both cases.
"The Presidency is in engagement with Mr Zimu on interests in the energy field that were found on the CIPC [Companies Intellectual Property Commission] database during a routine internal audit check of business interests of all Presidency staff members at all levels, from the most junior upwards.
"Engagement with Mr Hulley on the allegations being made against him is also being undertaken," Ngqulunga said.
"None of them [advisers] are permitted to do business with the state or become a director or member of any entity in the field in which they are likely to advise the President.
"They [are] all aware of this and were informed formally by the Presidency," he added.
Zimu said that, if indeed the missing declaration was needed, Eskom should have disqualified his company.
"If there is a page or a space where they have to disclose interests of someone who works for government and they have not, if I was chairperson of that committee I would have disqualified them [sic].
"There are criteria for these things and the evaluating team should have picked it up. I've got 20 years chairing committees at Eskom and City Power, I would not have entertained it," he said.
But he also said it was unfair to expect him to resign from his directorships. "It was only late last year that the ... [chief operating officer at the Presidency] came to me and said the AG's office has picked up companies where I was a director. It was a little bit unfair to me, who had not even applied for the job [as adviser], to dump everything as if I have done anything wrong."
Zimu went on to claim that there were other officials in the cabinet's war room who were also conflicted.
"In the war room, we were dealing with Eskom issues and some experts in that war room were even linked to Eskom directly as suppliers.
"And I had a problem because we would discuss issues involving coal ... and yet we're sitting with people whose companies supply coal to Eskom," he said.
Cape Gate Marepha executive chairman Edwin Phala said: "He attended some board meetings and resigned last year, citing conflict."
Auditor-general spokesman Afrika Boso said they could not comment on an ongoing audit.