The Gupta-linked Trillian Capital Partners has finally put up its version of events surrounding a partnership with global consulting firm, McKinsey & Co, that led to a staggering R1.6-billion in alleged unlawful payments to the two firms.

It says Eskom’s High Court case to undo decisions that led to the payments is replete with hearsay, irrelevant statements, generalised accusations, aspersions and pure conjecture.

Eric Wood, CEO of the umbrella company, Trillian Capital Partners, accuses the parastatal of launching this court action to satisfy “public sentiment”.

And, it’s being done in order to capitalise on McKinsey’s offer to repay its portion – a move that Wood billed a PR stunt by the global company.

He submitted a 130-page response to Eskom’s application for a review of decisions that led to payments totaling nearly R1.6-billion to the two companies.

The thrust of Eskom’s case is that its deal with McKinsey for two key projects was invalid, that it never had a direct contract with Trillian, and therefore there was no reason to pay the two companies a dime.

McKinsey, following negotiations with the National Prosecuting Authority and Eskom, repaid its portion in July but continues to battle the reputational damage caused by the scandal amid further investigations by US authorities and the upcoming Commission of Inquiry into State Capture scheduled to start on 20 August.

Digging in his heels, Wood charges that the parastatal has no right to come after Trillian’s windfall because the company “earned” those fees.

A key focus of his argument is that Trillian was roped in by McKinsey as a local partner and that it did the work regardless of whether a formal contract was ever signed with McKinsey.

The two companies executed a “partly oral, partly tacit and partly written agreement” for Trillian to be engaged as McKinsey’s supplier development partner on the Eskom projects, the Top Engineers Programme and the Corporate Plan.

“I use the word partner not in the technical sense but in a colloquial way as it is commonly employed in commerce,” Wood says.

McKinsey ditched the partnership when Trillian failed a due diligence but that didn’t stop Eskom from paying the local company – in fact, McKinsey provided a letter that paved the way for those payments, something the company now says it should not have done.

Wood says whatever questionable dealings went down in the corridors of power at Eskom were not brought about by corrupt dealings on the part of Trillian and that Eskom’s case is “inconsistent with corruption or bias”.

“Accordingly, even if the Eskom decisions now sought to be impugned were made irregularly, irrationally or unlawfully, Eskom has no right to claim the payments made to TMC.”

Trillian Management Consulting (TMC) is the Trillian subsidiary which received the Eskom payments between April 2016 and February 2017.

Eskom’s deal with McKinsey required a BEE or supplier development partner. Wood says the global company was “intent” on partnering with Trillian Management Consulting, then in its infancy, to fulfill that 30% BEE requirement.

They started working together before McKinsey could finalise a due diligence into the ownership of Trillian and some its subcontractors and continued until McKinsey told Trillian to “stand down” in August 2016.

At all material times, it was TMC’s understanding that McKinsey had tendered for and was awarded the contracts in accordance with Eskom’s procurement processes.

Wood said he had no reason to doubt McKinsey as the company by then was already deeply embedded at Eskom through its previous work with the utility.

Besides, the unofficial partnership carried on until Eskom prematurely cancelled McKinsey’s contract. Wood says during that time McKinsey had even committed to being “respectful and open-minded” about Trillian’s own subcontractors – E Gateway and Cutting Edge, both of which have turned out to be Gupta-linked companies featuring prominently in the #GuptaLeaks.

Wood also insists that it was McKinsey that took Trillian into Eskom and not the other way around.

The global company’s now former senior partners, Alexander Weiss and Vikas Sagar, did the initial introduction to Eskom staff and shared Trillian’s VAT details with Eskom as far back as November 2015, Wood says.

“McKinsey is a globally positioned and experienced consulting firm that had been engaged over a number of years to provide services to SoEs like Transnet and Eskom.”

Trillian, he said, relied on McKinsey as the primary contractor to ensure that things were done by the book.

McKinsey, in its response to the review application, says it has “no affiliation” with Trillian and that its own investigations found no evidence of wrongdoing on its part.

“Significantly, the founding affidavit (submitted by Eskom CEO, Phakamani Hadebe) does not suggest otherwise: it suggests that Trillian was engaged in corrupt activities but does not allege such conduct by McKinsey.”

The company, in writing, terminated its ties with Trillian on 15 March 2016, a month before Eskom would make the first of four payments to Trillian.

McKinsey conceded that it should never have commenced work with Trillian on the Turn Around programme until its due diligence of the company was completed, not even on a trial basis as it claims it had done.

Remarkably, McKinsey says it was after being convinced of irregularities by Eskom that it agreed to repay just over R900-million in fees raked in under the Turn Around programme. However, it is opposing Eskom’s claim of nearly R69-million for its work on the Corporate Plan which the company maintains was above board.

Meanwhile the Guptas only score a brief mention in Trillian’s response and then only to dismiss any notion that the company had dealings with them.

Gupta kingpin, Salim Essa, was the black partner in Trillian Capital Partners through a 60% stake in the company held by Essa’s Trillian Holdings at the time. Wood describes Essa as nothing but a shareholder who had zero to do with the day-to-day running of the company or its Eskom dealings.

But in the event Essa pulled strings behind the scenes as Eskom claims, Trillian, says Wood, was utterly unaware of that.

Trillian’s case is set out against the backdrop of a string of damning investigative reports and a parliamentary hearing into the deal including the Public Protector’s State of Capture report which named the company for having coughed up R235-million towards the Guptas purchase of Optimum Coal Mine.

The others were done by G9 Consulting, one by law firm Bowman Gilfillan, another by Oliver Wyman and that of senior advocate Geoff Budlender which was commissioned by former Trillian non-executive chairman Tokyo Sexwale to examine allegations that the firm’s executives had had prior knowledge that former president Jacob Zuma was going to fire finance minister Nhlanhla Nene during his first stint in the job – and had planned to cash in on it.

Wood takes issue with Eskom’s reliance on these investigations as Trillian was either not consulted or they were “incomplete”. In addition, he said the parliamentary enquiry had relied on the “untested” testimony of whistle-blowers like Eskom’s former head of legal, Suzanne Daniels, and Trillian executives, Bianca Goodson and Mosilo Mothepu, whom he described as “disgruntled” former employees. Their information is widely regarded as having dealt the death-knell to Trillian.

“I decry the attempt of use of ‘testimony’ before other bodies, reports by other persons and ‘information gathered’ by journalists as evidence of truth of any allegation relied upon by Eskom.

“The same objection is made to the use of newspaper articles. The fact that Eskom labels these types of matters as being ‘in the public domain’ does not advance the case for their admission as evidence,” says Wood.

Read in isolation, Trillian’s response to the review application appears almost convincing. Except that the NPA, like Eskom, believes the payments to Trillian were unlawful, that the overall deal had all the “hallmarks of corruption” and an investigation coupled with efforts to recover the money continues, albeit at a snail’s pace for now. DM