Investigations into State Capture findings at EOH continue

EOH Holdings website. Picture: Karen Sandison/Independent Newspapers

EOH Holdings website. Picture: Karen Sandison/Independent Newspapers

Published Jun 27, 2024


By Nicola Mawson

SEVERAL years after the former EOH CEO, Stephen van Coller, disclosed to the Zondo Commission of Inquiry irregularities within the company that led to millions of rand being funnelled to various people as well as the ruling party in exchange for tender awards, investigations continue.

So far, the company’s former executive, Jehan Mackay, has been arrested and appeared in court earlier this month along with former Sports, Arts and Culture Minister Zizi Kodwa, who stepped down in disgrace after the arrest yet is now set to be an MP. Mackay was charged over a “questionable” R1.7 million loan to the former minister.

However, there is still more to be done when it comes to dealing with legacy corruption issues that afflicted the company, which has since installed new and rigorous governance rules and requirements under Van Coller, who was appointed in 2018 and has since been replaced by Marius de la Rey on an interim basis.

Business Report ran investigations over several years about tender fraud at EOH implicating executives and employees with state organisations such as the SANDF and the Department of Water and Sanitation, which culminated in the Zondo Commission, which investigated allegations of state capture.

It seems that action has yet to be taken against Patrick Makhubedu, a former sales director who is now CEO of Prime Molecular Technologies Africa, according to LinkedIn.

Makhubedu, stated Volume IV of the State Capture Report released in April 2022, helped the IT company secure several contracts with the City of Johannesburg (CoJ) through Geoff Makhubo through an improper relationship. Makhubo became the mayor before he subsequently died.

Makhubedu quit in March 2019, the day before he was set to answer questions from ENS Forensic Services, which EOH had brought in to do an independent investigation.

Reno Barry, another former EOH executive, as well former employee of subsidiary Technical Software Systems (TSS), Mongezi Duma, were also implicated in the report for being part of a scheme to funnel millions to the ANC to secure CoJ deals.

Duma’s LinkedIn lists him as still working at TSS, while Barry does not appear to have a web presence.

Business Report was unable to find any mention of Makhubedu, Barry or Duma being arrested or charged. Hawks spokesperson Brigadier Thandi Mbambo said no other former EOH employees had been charged or arrested.

She said investigations were ongoing but could not provide specific details.

In response to queries from Business Report, EOH said it was unable to respond to specific enquiries.

The State Capture progress report, published in November last year, indicated that there were three recommendations from the commission with regard to the CoJ and EOH that were still under investigation.

The report recommended specifically that Mackay should be investigated with a view to his prosecution, as well as “any other suspects identified in the investigation”.

Other actions that EOH has previously said it would take against those who had perpetrated the theft included filing civil claims in June 2021 against several former EOH executives, seeking total damages of R6.4 billion. Former CEO and co-founder, Asher Bohbot, was set to be sued for R1.66 billion. Bohbot is believed to be living in Israel.

“Several key executives of EOH were effectively given a free hand to take significant executive decisions without any oversight or check on their authority,” the Zondo report stated.

Moreover, EOH over invoiced public sector clients, and was also found to have bypassed procurement requirements at the State IT Agency (SITA). These patterns, however, are not unique to EOH and have occurred at other entities such as the Airports Company South Africa, where Regiments Capital bribed the Treasurer to get contracts, the report read.

Judge Raymond Zondo lauded EOH for having “proactively approached the commission to be given the opportunity to disclose publicly what wrongdoing had taken place historically within its ranks”.

In February, EOH said it had resolved the final legacy issue holding it back from finalising a restructuring restructure and getting back to business as usual, which was an agreement with the South African Revenue Service that saw it pay R112m to the revenue service.

For the full year in 2023, EOH reported revenue of R6.2bn, up from the prior year’s R6bn, and narrowed its net loss from R100 143 to R77 537.