Pesident Jacob Zuma. File Image
JOHANNESBURG -  The Pretoria High Court  has authorised the freezing of R1.6 billion in assets earned by global consultancy McKinsey and a firm linked to friends of President Jacob Zuma, a source at the state prosecutors’ office told Reuters.

The court made the decision in December after a request by the National Prosecuting Authority (NPA) to freeze the fees earned by McKinsey and local consultancy Trillian for advising South African power utility Eskom.

McKinsey has already lost several clients over the contract.

This month Zuma agreed to set up a commission of enquiry into allegations of influence peddling by the Gupta brothers, who controlled the firm McKinsey partnered with on the 1.6 billion rand contract to advise Eskom in 2016.

Separately, Parliament is investigating whether McKinsey knowingly let funds from Eskom be diverted to Trillian as a way of securing the contract.

“On December 14, 2017, the NPA obtained a preservation order from the Pretoria High Court to preserve assets worth around R1.6 billion relating to Trillian and McKinsey,” said the NPA source, who declined to be identified.

“Tomorrow parties in the case will be served with the order,” the source said. The order allows prosecutors to freeze assets pending the outcome of an investigation.

A spokesman for McKinsey said on Monday it had not received formal communication about the preservation order.

“As we have said before ... we will return the fee we earned from the Eskom turnaround programme (R1.028bn) no matter what,” the spokesman said in an email to Reuters.

McKinsey will cooperate with SA authorities in their investigations into the case, he added.

McKinsey launched its own investigation into its handling of the partnership with Trillian and says it ceased work with the firm in March 2016 after due diligence showed links to the Gupta brothers.

Trillian did not respond to a request for comment from Reuters on Monday. When contacted in November by Reuters, Trillian denied wrongdoing relating to the Eskom contract.

Both Zuma and the Guptas deny wrongdoing. Zuma’s spokesman did not reply to a Reuters request for comment.

The court decision is one of the first instances in which authorities have acted on allegations of wrongdoing by three Gupta brothers, Ajay, Atul and Rajesh, who South Africa’s anti-corruption watchdog accuses of siphoning off public funds.

-REUTERS