File image: Public Enterprises Minister Lynn Brown. (Ian Landsberg/ANA Pictures).
File image: Public Enterprises Minister Lynn Brown. (Ian Landsberg/ANA Pictures).

Eskom should take legal action against McKinsey, Trillian - Brown

By Staff Reporter Time of article published Sep 22, 2017

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CAPE TOWN - New reports are coming in that Public Enterprises Minister, Lynne Brown has ordered Eskom to begin legal action against companies over their involvement in disputed contracts at the country’s state-owned electricity company.

This follows global consultancy firm, McKinsey and Trillian's alleged underhanded dealings with the Gupta's, according to Fin24. 

Brown ordered Eskom to take legal steps against McKinsey, Trillian, suspended acting CEO Matshela Koko and chief financial officer Anoj Singh, who is on special leave, her spokesperson, Colin Cruywagen, said by phone.

Others who will be charged

- Former head of procurement Edwin Mabelane

- Acting head of group capital Prish Govender

- Senior procurement manager Charles Kalima

According to a report in Business Day on Friday, in July, McKinsey said it was reviewing documents related to work done for Eskom.  

Yet, a report by Eskom and G9 Forensic found that McKinsey and Trillian made R1.6bn in fees and expected to make another R7.8bn, according to amaBhungane and Scorpio.

Eskom's CFO, Singh was subsequently placed on leave in July whilst acting CEO, Koko was suspended. 

Eskom is at the centre of the debacle, with floating allegations that the Guptas exploited their relationship with the president to win state business. 

The company disclosed R3 billion of irregular expenditure in its financial results on July 20, a figure which its auditors said they couldn’t independently confirm. 

Zuma and the Guptas have however denied wrongdoing.

Brown stands besidethe Democratic Alliance (DA) in taking legal action against these companies. 

Independent Media reported on Tuesday that the DA has laid charges of of fraud, racketeering and collusion against McKinsey. 

The opposition party further declared that it plans to approach the US Department of Justice about the work the consultancy firm did for Eskom.

READ: 'No stone will be left unturned' in DA's corruption charges against McKinsey

Additional officials who have been implicated in this saga include Eskom's acting chief executive Johnny Dladla. 

Documents in the possession of Business Day reveal that  "acting chief executive Johnny Dladla and several other senior officials were present at a procurement subcommittee meeting in June 2015, when Eskom decided to negotiate an exclusive agreement with McKinsey and Trillian to run its top engineers programme, which eventually cost Eskom R1.6bn for six months’ work".

Eskom however told the media outlet that although Dladla was a member of the procurement subcommittee, he "played no role in the McKinsey/Trillian operational execution".

In addition, Independent Media reported yesterday that the High Court has ruled that 15 Gupta owned companies have lost their interdict application to stop the Bank of Baroda from closing their accounts at the end of the month.  

This was after the bank reported more than 30 suspicious transactions valued at R4.2 billion to the Financial Intelligence Centre (FIC).  

READ ALSO: Court delivers major blow to Gupta companies


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