Picture: Henk Kruger / African News Agency (ANA)
Picture: Henk Kruger / African News Agency (ANA)

ABB probed for payments connected to Eskom

By Niclas Rolander Time of article published Oct 24, 2019

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JOHANNESBURG - ABB Ltd. is being investigated for suspect payments related to work carried out by the Swiss industrial giant for embattled South Africa utility Eskom Holdings SOC Ltd.

The maker of robotics and power grids “self reported” the incidents to U.S. and South African authorities and expects it may be sanctioned, 

ABB said alongside third-quarter earnings on Wednesday. The Zurich-based company also took a writedown against the $160 million contract, awarded in 2015 and involving the Kusile power-plant project.

The U.S. Department of Justice and the U.S. Securities and Exchange Commission have both been informed, the Swiss company said, adding that it is co-operating with all probes.

ABB joins a string of international companies to be caught up in graft allegations related to Eskom, which is reliant on state bailouts and seen as the greatest risk to the South African economy. German software giant SAP SE is being probed in the U.S. for how it won contracts with South African state companies, while McKinsey & Co. said last year it would repay money unlawfully received while working for Eskom.

Former Eskom Chief Executive Officer Matshela Koko allegedly guaranteed future contracts to ABB in return for subcontracting work to his stepdaughter’s business, the Johannesburg-based Sunday Times reported in March. He denied the accusation at the time. Koko was suspended in 2017 over allegations of wrongdoing and resigned in February of last year.

Both SAP and McKinsey became involved with third-parties linked to the Gupta family, the trio of brothers who were friends with former President Jacob Zuma and are accused of corruption during his scandal-hit tenure. They and Zuma also deny wrongdoing.

ABB “believes that there may be an unfavorable outcome in one or more of these compliance-related matters,” the company said. “It is not possible for the company to make an informed judgment about the possible financial impact.”


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