AGE OF ACCOUNTABILITY
EOH comes clean and agrees to repay R200m to Department of Water and Sanitation
Technology services company EOH has agreed to repay close to R200m it received from the Department of Water and Sanitation between 2012 and 2017. This does not exempt EOH from repaying further amounts that may be uncovered during the ongoing investigation.
The Special Investigating Unit (SIU) and the Department of Water and Sanitation (DWS) have signed a settlement agreement with IT company EOH. In terms of the agreement, EOH has agreed to pay back R191.8-million, including interest, over 36 months.
The agreement also stipulates that an upfront payment of R65.7-million must be made by EOH by 30 November 2022, with the first instalment of R3.4-million due on 1 January 2023.
The settlement relates to an SIU probe into the procurement, contracting and implementation of information technology in respect of the EOH/DWS contracts under Presidential Proclamation No. R33 of 2021.
The probe found that EOH had unduly benefited from its contracts with the department.
EOH Mthombo
On 5 August 2021, the government announced the SIU’s proclamation for an investigation into the procurement of, or contracting and implementation of, four IT contracts that were awarded between 2012 and 2017 by the department to EOH Mthombo (a wholly owned subsidiary of EOH), to the value of R474-million.
Read more in Daily Maverick: “EOH boss says company has done enough to make government ban unlikely”
According to the SIU, it was also contacted by EOH to inform the unit of possible fraud and corruption involving employees of its subsidiary, EOH Mthombo, and third parties who allegedly colluded with Department of Water and Sanitation officials in contracts that EOH had concluded with the department.
EOH has been under scrutiny since 2017, when amaBhungane first raised questions about the company’s political connections.
The SIU has made it clear that this settlement does not exempt EOH from paying any further amounts due to the department that may yet be uncovered by the ongoing investigation.
Neither does the agreement waive the SIU’s rights to bring any action or application before the high court or Special Tribunal to recover any further amounts of money which may be revealed by the SIU or any other organ of the State.
Visit Daily Maverick’s home page for more news, analysis and investigations
A joint statement by the SIU and DWS reads: “The agreement is not an exoneration of any person from being held criminally liable for whatever criminal conduct investigation of the SIU into the conduct of EOH Mthombo and/or DWS and/or any other third party.”
The statement also underlined that the settlement agreement was a continuation of the implementation of the SIU investigation outcomes and consequence management to recover assets and financial losses suffered by State institutions and to prevent further losses.
In 2018, EOH’s new leadership, under chief executive Stephen van Coller, promised to clean things up and hired forensic experts at law firm ENSafrica to investigate activities at EOH Mthombo between 2014 and 2017.
A statement by EOH says the new board and management have, over the past four years, taken steps which illustrate how seriously they take the investigation.
“…. the EOH Group has transparently and publicly implemented robust actions to identify wrongdoings and has provided extensive cooperation with law enforcement and regulatory agencies including the SIU.
“Upon learning in February 2019 of certain transgressions of several previous employees and board members of EOH between 2015 and 2017, the new board and management of EOH instructed independent law firm ENSafrica to significantly extend the scope of the forensic investigation into the suspected wrongdoing covering a period from 2012 to 2018.”
Submissions
EOH submitted eight section 34 reports to the SIU between May 2019 and June 2020, and made detailed submissions to the National Treasury and Sita (State Information Technology Agency), as well as the Financial Intelligence Centre.
Read more in Daily Maverick: “A R1.2bn pot of toxic soup at EOH”
On 31 May 2019, EOH reported wrongdoing to the National Treasury and proposed to compensate the State for identified irregularities in the Department of Water and Sanitation contract.
As part of this process, EOH contacted the SIU in July 2020 to discuss what the analysis uncovered, what work was done for value, and to discuss compensation for aspects of the contract where no value was derived in respect of the department’s contract.
The SIU, the department and EOH then reached agreement on an amount that all parties believed to be fair and equitable.
EOH chief Van Coller said the company’s new leadership remained committed to doing business ethically as well as being a good corporate citizen. DM
Become an Insider
Wow! Well done, DM. I don’t suppose you’ll get a cut for your expose of EOH, but you should. May the truth be told.
Corporate SA is doing the right thing by repaying taxpayers money from whence it came…but when are the stealing “politically connected” going to pay their stolen billions back to the taxpayer? Or is that just considered as”radical economic transformation.” ?
Where are the Guptas? Has Presidential hopeful Mkize repaid the DigitalVibes stash? Is Zuma ever going to repatriate and refund his Dubai horde? is CR recovering his sofa? Until this is properly dealt with then perhaps Corporate and Personal taxpayers are being illegally prejudiced!
It’s all very well for taxpaying South Africans, both Personal and Corporate to do the right thing…but not when the powers that be continue to lie, cheat and steal. This has to stop!
This is the company that gave Zizi Kodwa money to give to the ANC and pocketed it to buy a Jeep for himself. They ought to lay criminal charges against him as the ANC has failed to do so and Ramaphosa has ignored the recommendation to dismiss the twerp as a Deputy Minister. Also, this is the Department that was run by Nomvula Mokonyane that was excoriated by the Portfolio Committee on Water Affairs and Scopa during the Fifth Parliament. The parliament did nothing about her and Cyril never heard or saw anything regarding this matter as head of government business. The Hawks and the NPA are not interested in the R13 billion loss of this department. These peanuts that are being returned will be hailed by Lamola as they do the R8 billion in comparison to the R1 trillion lost during the 4th and fifth administration of the ANC. We await the recovery of the monies lost during the tenure of Nomvula Mokonyane. What more did Zizi Kodwa get is a matter of conjecture. The SIU needs to get proclamations for the R13 billion flagged by the fifth parliament with regard to Water Affairs. It also needs to investigate the Giyani boreholes.
An effective and efficient anti-corruption entity, if we had one, could have reacted to AmaBhungane in 2017.
The FATF’s main and real concern is that enforcement of SA’s good anti-graft laws simply does not reach the vital orange overalls stage and won’t until government resolves to establish an independent stand-alone anti-corruption entity that complies with all of the criteria set, in binding terms, in the Glenister litigation. The current tentative plans to make the ID a permanent feature of the NPA do not even come close.
It is a matter of political will. It is admittedly difficult to take down friends and comrades who have strayed from the paths of honesty, integrity and probity. Sadly, failing to do so is taking us all down the slippery economic slope to failed statehood. Government is obliged to put the Glenister criteria in place. It hasn’t. All voters should insist that it does so now before the FATF puts us on its grey list.