Scorpio

Eskom wants R1m fine or 30 days’ jail for Trillian boss Eric Wood

By Jessica Bezuidenhout for Scorpio 27 January 2020
Caption
Trillian's Eric Wood. (Photo: supplied)

With the National Prosecuting Authority breathing down the neck of Trillian Capital Partners, the now-defunct company is gearing up for a fresh round in the ring with Eskom in a drawn-out battle by the parastatal to recover R595-million in alleged State Capture loot.

Eskom is seeking an urgent contempt of court order against Trillian Management Consulting, a subsidiary of Trillian Capital Partners, the financial advisory firm at the centre of State Capture allegations at several government-owned companies.

The country’s embattled power company charges that Trillian, a Gupta-linked company, is in breach of a 2 October 2019 High Court order that had directed it to pay R595-million into Eskom’s attorneys’ trust account to safeguard the money pending any further litigation. 

Eskom wants the court to hold Eric Wood, the company’s lone director, accountable for Trillian’s alleged “blatant” disregard of that court order.

The deadline for payment expired on 9 October 2019 and Eskom, having not received a cent, now seeks an order for Wood to be slapped with a R1-million fine or 30 days in jail for the company’s failure to honour the court order. 

Trillian’s lawyer, Kevin Hacker, said his client is “most certainly” opposing the latest application brought by Eskom.

“The relief which has been sought is not legally competent and will in due course address all the deficiencies, and misconceptions characterising such application.”

Eskom’s High Court application, filed on 16 January 2020, has also been sent to the SA Revenue Service and further adds to the woes of Trillian and Wood who are embroiled in several other State Capture-linked legal battles. The company is among those Gupta-linked entities that have been named at the Zondo Commission for deals at Eskom and Transnet.

In addition, the National Prosecuting Authority obtained a secret (provisional) restraint order in terms of the Prevention of Organised Crime Act in November 2019 against them, as well as Wood’s former partners at Regiments Capital, Litha Nyhonyha and Niven Pillay.  

An affidavit filed by the NPA’s Hermione Cronje in that case stated that the three businessmen and their companies may face charges of fraud, corruption and money laundering in excess of R1-billion over deals including Transnet’s tainted acquisition of 1,064 locomotives and another, involving the Transnet Second Defined Benefit Fund

Eskom, in its application for the contempt of court order, seeks the sanction of Wood and payment within five days, if successful. Failing that, it wants Trillian to be liquidated in terms of the Companies Act due to its inability to pay its debts.

Although the company is commercially insolvent – it effectively ceased trading after the State Capture scandal erupted around it in 2016 – a successful liquidation application may trigger formal hearings that could finally see Wood being summoned to provide testimony, under oath, of money flows from Trillian to Gupta companies. 

Eskom’s application is scheduled to be heard as an urgent application next month. 

“The very fact of Trillian’s conduct of breaching the Section 18 order entitles Eskom to urgent relief,” court papers state. 

The Section 18 order obtained by Eskom in October 2019 was extraordinary in that it not only compelled the company to pay up within five days thereof, regardless of further appeal efforts, it also allowed for Wood to be personally joined in the proceedings. 

In support of Eskom’s latest bid to get its money back, the parastatal’s new CEO, Andre de Ruyter, submitted an affidavit in which he said: 

“I am advised that contempt of court matters have a public interest element which have obvious implications for the effectiveness and the legitimacy of the legal system and the legal arm of government and constitute a crime that manifests itself in the contumacious disrespect for judicial authority.” 

Trillian, by its own admission, is broke and indebted not only to Eskom, but also other creditors, including Transnet. 

De Ruyter’s affidavit further states: “As Trillian is, according to Wood, not in possession of any cash, or liquid assets to make payment to Eskom, it begs the question as to what happened to the R600-m that Eskom unlawfully paid Trillian.”

As a result, De Ruyter says it is essential that a liquidator is appointed to investigate the trade and dealings of the company in order to protect the parastatal and a general body of creditors.

Court papers include references to letters of demand that Eskom had sent the company in December 2019 and a 1 January 2020 response by the company suggests it does not believe Eskom has grounds for a liquidation application until such time as Trillian’s application for leave to appeal the original order is determined by the Supreme Court.

According to the company’s appeal application, lodged with the SCA on October 30 2019, Trillian does not seek to challenge the October 2019 Section 18 order as the company is broke so it is, in essence, “futile”.

But, Trillian believes the full bench of the High Court in Pretoria had erred in its original order when it deemed the payments to Trillian as invalid and unlawful. 

Trillian maintains that the Court ought to have referred the case to trial for the benefit of discovery, subpoenas, oral evidence and cross-examination to establish, among other things, the validity of claims that the company had benefited corruptly from its dealings with Eskom.

Wood was co-owner of Trillian along with Gupta-kingpin, Salim Essa who exited the company when he opted for self-imposed exile in Dubai in 2017.  

If successful, Eskom’s latest case would mark the third high court order for payment against the company – it won an initial review application to set aside all administrative decisions that led to the payments to Trillian and global consulting firm, McKinsey & Co, in June 2019.

 McKinsey, which did not oppose that application, paid Eskom back just short of R1-billion. But, Trillian unsuccessfully appealed the ruling and was slapped with the damning October 2019 order that it is now accused of violating. 

The company is gearing up for a new round against Eskom amid several other legal battles. This includes the NPA’s provisional restraint order and its bid against the original order by a full bench of the Pretoria High Court, which deemed the parastatal’s payments to Trillian to have been “unlawful” and “invalid”. 

In directing the company to pay back the money, the original ruling stated that “justice demands nothing less”. DM

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