DA to lay charges against EOH, FNB remains mum on banking relationship
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Johannesburg - As allegations of corruption and malfeasance continue to swirl around IT services group EOH, First National Bank (FNB) continues to evade questions regarding its relationship with the company.
On Tuesday, the DA’s City of Johannesburg Caucus Leader Leah Knott said that she would be laying criminal charges against the city’s Executive Mayor Geoff Makhubo and EOH.
“I will be laying criminal charges against him and EOH for the corrupt SAP contract which has cost the City hundreds of millions and will write to EOH to demand that they return all money paid to them by the City.
“The Zondo Commission has now laid bare the fact that the City has paid nearly a billion rand to EOH over the past 10 years for a broken SAP system that is at the heart of the billing nightmare which residents are faced with daily. We cannot let corruption and State Capture go unpunished. Mayor Makhubo and EOH have stolen hundreds of millions from Johannesburg residents,” said Knott.
On Monday, the probe into state capture heard evidence about a dubious contract involving City of Joburg mayor Geoff Makhubo and EOH Mthombo, an EOH subsidiary.
These latest developments have ratcheted up pressure on FNB to come clean on whether it will shut down the accounts of the company.
FNB stands accused of waging a campaign against black-owned companies who have not been implicated in state capture or corruption while failing to act against companies like EOH.
Earlier this month, FNB said it would evaluate its relationship with EOH Holdings following corruption and money laundering charges opened against the company and the First Rand Group.
The charges were laid by lobby group Transform RSA and several other entities.
Transform RSA and others have since called for South African banks to close EOH’s accounts for their role in the procurement of overpriced contracts for the Department of Defence.
FNB on Tuesday said it would not comment on specific bank accounts.
"Nevertheless, we always endeavour to ensure that our bank accounts are utilised and managed in compliance with the relevant laws. Furthermore, we continue to support the work of the Commission of Inquiry into State Capture," it said in a statement.
On Monday, Makhubo testified before the Commission of Inquiry into State Capture regarding cash flow and transactions during his tenure as Treasurer of the Greater Johannesburg Region of the ANC and as finance manager at the municipality.
During his testimony, he denied that his friend and former business partner, Patrick Makubedu made a number of donations to the ANC in a bid to influence EOH’s chances at being awarded IT tenders in the city.
The commission heard that Makubedu – a director at IT service management company EOH – made a number of donations to the ANC and also made several transactions from his personal business to bail out Makhubo’s cash-strapped business.
In one instance, Makhubedu is said to have transferred R200 000 into Makhubo’s Molelwane Consulting business account that had a little over R60 in it.
The Commission then heard that after “donating and assisting” Makhubo and the ANC with funding, Makubedu emailed Makhubo with a networking proposal related to a tender at the City.
Makubedu then allegedly sent a second email with an invoice of over R1.6 million from TSS, a subsidiary of EOH.
A few days later, a third email sent from Makubedu to Makhubo contained a blank letter of appointment allegedly drafted by Makubedu.
The letter, advocate Chaskalson said, should have been written by the City of Johannesburg and not Makubedu.
Chaskalson indicated that the timing of EOH’s donations and the tender discussions were suspicious.
"I want to put it to you that the evidence is overwhelming that payments made by EOH were payments made for your influence," Chaskalson said.
However, Makhubo told the commission that he was merely fundraising for the ANC, and for him, it was clear that the transactions were only a donation to the party.
The commission’s evidence-leaders said they would submit that a number of transactions from EOH were “ultimately corrupt payments” and were in exchange for IT contracts at the City of Johannesburg.
In February 2019, EOH enlisted the services of ENSafrica to conduct a probe on legacy contracts that almost brought the company to its knees.
The investigations revealed that around R1.2 billion worth of suspicious transactions took place in EOH and the transactions mostly involved public sector contracts.