She said on Sunday that she had considered the Eskom board’s reasoning in formulating the proposed pension payout, and could not support it.

"I found the argument presented by the board on why the pension arrangement was conceived lacking in legal rationale, and it cannot be substantiated as a performance reward, because Mr Molefe has already been granted a performance bonus for his contribution to the turnaround of Eskom," she said.

"Nor is the proposed pension payout justifiable in the light of the current financial challenges faced, not only by State-Owned Companies (SOCs), but by the country as a whole."

She said she had asked Eskom and the other five SOCs to demonstrate financial prudence and social consciousness when considering executive payments.

"Given that I was not a party to the contract of employment concluded between the Eskom board and Mr Molefe, I have instructed the board to urgently engage Mr Molefe and report back to me with an appropriate pension proposal within seven days."

She said it was unfortunate that such a sensitive and private matter had been "handled so recklessly".

She also asked the board to investigate how its proposal had got into the public domain before she had the opportunity to consider it.

News24