A group of EOH employees colluded with government officials to bypass tender regulations on multiple occasions, illegally arranged contract extensions with state agencies. Photo: Timothy Bernard/African News Agency (ANA)
A group of EOH employees colluded with government officials to bypass tender regulations on multiple occasions, illegally arranged contract extensions with state agencies. Photo: Timothy Bernard/African News Agency (ANA)

EOH staff helped to bypass tender rules

By Edward West Time of article published Nov 26, 2020

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CAPE TOWN - A group of EOH employees colluded with government officials to bypass tender regulations on multiple occasions, illegally arranged contract extensions with state agencies such as the City of Johannesburg and even connived with them to get an inside track on tenders before they were advertised.

ENSafrica head of forensic services Steven Powell yesterday told Deputy Chief Justice Raymond Zondo’s State Capture Commission that investigations by the legal firm revealed that when things went wrong, the EOH employees would use “politically exposed people to exert influence to make sure things went their way. They would intervene and decision to go out to tender would be changed …” he said.

The commission also heard evidence of multiple payments made by EOH executive at the time, Jehan Mackay, who in turn paid it to senior ANC members during 2015, including current deputy Minister of Intelligence Zizi Kodwa, who was spokesperson for the ANC at the time, former President Jacob Zuma’s adviser Siybulela Zintwa, and Reggie Nkabinde, former treasurer of the ANC Youth League.

Powell described how Mackay would pay these party officials from his personal bank account, upon receipt of the funds from EOH.

Earlier this week, chief executive Stephen van Coller testified how he had found severe corporate governance failures at EOH when he was appointed in 2018, including no company policy on political donations, and that the group appeared to have made numerous donations to only one party in the preceding years.

The payments highlighted in the ENSafrica investigation between 2015 and 2017.

They were made to Mackay’s personal account from TSS MS, an EOH subsidiary it acquired in 2011.

Mackay was a founder of TSS MS, before it was acquired by EOH.

The commission also heard evidence of substantial tender irregularities at the City of Johannesburg.

EOH was awarded a large number of tenders such as a R250 million contract for SAP support between 2012 and 2016, and an SAP software contract worth R404m between 2016 to 2019.

The commission heard evidence of emails passed between current city mayor Geoff Makhubo, and Patrick Makhubedu, an EOH sales director at the time, where Makhubo asked Makhubedu to assist in the payment of R582 100 for facilities to hold a Greater took place

Johannesburg ANC Youth League Conference, an amount which was duly paid by TSS Services financial manager Rene Jonker, the second authoriser of the payment being Jehan Mackay.

He resigned at the weekend on the date he was asked to meet with the forensic investigators.

Powell said Makhubedu had resigned from EOH the Friday before ENSafrica had asked to meet him in connection with the investigation on a Monday.

“Makhubo and Makhubedu were linked to a number of entities that transacted with one or another at the time,” said Powell.

He said it was “not uncommon” to have found in their investigation that there was no evidence of any work done by a number of service providers to EOH at the time, in spite of EOH’s payments made to them.

BUSINESS REPORT

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