Technology group EOH said on Tuesday an investigation by ENS had found evidence of serious governance failings and wrongdoing at the company.
DURBAN -  JSE-listed EOH Holdings share price declined by 6 percent on the JSE this morning after the technology group revealed that investigation by ENSafrica has found evidence of a number of governance failings and suspicious transactions of R1.2 billion have been identified and are being investigated. 

The group said the wrongdoing at EOH included unsubstantiated payments, tender irregularities and other unethical business practices which are primarily limited to the public sector business centralised in EOH Mthombo, the group’s subsidiary. 

“The exact nature of each of these transactions have not yet been verified and may relate to legitimate transactions, theft or bribery and corruption payments,” the group said.

US technology giant Microsoft informed the group in February that it is terminating its contract with EOH Umthombo and the move prompted chief executive Stephen van Coller to enlist the services of ENSafrica to investigate contracts within the group. 

The share price declined to R18.50 a share, down from Monday’s closing price of R20.86. 

The group said ENSafrica will provide the company with bi-monthly updates which will in turn inform areas for further investigation and remedial work. 

“EOH will continue to assess the financial impact of the findings,” it said.

The group has issued four cautionary notices about the investigations taking place, with the first one released in February. 

The group said shareholders are advised to continue to exercise caution when dealing in the company's securities until a further announcement is made.