EOH sets the record straight on acknowledgement of debt settlement
Information technology group EOH said it wished to provide clarity on the events that led up to it signing an acknowledgement of debt settlement.
The company said it had been forthcoming and transparent with information in the forensic probe.
“From the inception of the ENSafrica forensics investigation in February 2019, EOH has transparently and proactively reported to the authorities, including the Directorate for Priority Crime Investigations (DPCI), the FIC (Financial Intelligence Centre), the SIU (Special Investigating Unit), and the National Treasury, regarding wrongdoing by a handful of former employees of the EOH Public Sector team. By 8 July 2019, the DPCI had received a section 34 report on the ENSafrica preliminary findings and the matter had been reported to the FIC,” the company said in a statement.
The company said that before it engaged in settlement negotiations with the SIU, it had met with the National Treasury to report wrongdoings.
“On 31 May 2019 EOH reported the wrongdoing to National Treasury and proposed to compensate the State for identified irregularities including the DoD (Department of Defence) and the Department of Water and Sanitation contracts,” the company said.
“When the SIU met with EOH management for the first time on 20 March 2020, the SIU requested that EOH engage with them directly regarding compensation to the DoD, as they were mandated to address the irregularities at the DoD. During that meeting, EOH provided the SIU with the ENSafrica investigation information on the DoD contracts,” it said.
The company said it started making payments from December 5, 2020 in terms of the acknowledgement of debt settlement.
“The terms of the settlement agreement were disclosed at the EOH 2020 year-end results presentation on 2 December 2020 and in its SENS announcement,” said EOH.
The company made headlines after news broke that the US Securities and Exchange Commission were investigating a “shady” licensing deal involving Microsoft and EOH at the South African Department of Defence.
EOH was overcharging the department of defence on Microsoft licences, and the company agreed to pay R41.7 million.
Microsoft cancelled its long-standing partner agreements with EOH in early 2019 after an anonymous whistle-blower filed a complaint about irregularities in the deal.
Last week EOH said it had managed to reduce its half-year loss by 83 percent as it continued to clean up an image tarnished by problematic legacy contracts that almost brought the company to its knees.
BUSINESS REPORT ONLINE