Cape Town - Chief Justice Raymond Zondo has delivered a damning report into the alleged corruption at Eskom that involved senior officials with McKinsey and Trillian in the awarding of contracts worth billions.
In his report on Eskom on Friday, Zondo found that there was corruption in the years when the deals were struck.
He fingered former CEO Matshela Koko and former chief financial officer Anoj Singh as having been part of a scheme to get the deals for McKinsey.
“It is no surprise that the submission to the Board Tender Committee was prepared by both Mr Koko and Mr Anoj Singh, as parties to the negotiations, and Mr Koko signed off on the Acceptance Letter to McKinsey. It soon transpired that the black-owned supplier was Regiments, which Mr Anoj Singh had spoken positively about and recommended to McKinsey.
“Mr Salim Essa was, according to Ms Mothepu’s evidence, a business development partner to Regiments. He secured government contracts for Regiments and, indeed, tried to do so in 2014 at Eskom, but fell short. The R30.6 million payment by Eskom in respect of the Corporate Plan followed Mr Salim Essa to Trillian. There was no justification for this payment, nor for the ‘belief’ that Regiments or Trillian was a BBBEE partner to McKinsey. This was corruption, plain and simple,” said the commission report.
The report also found Koko and Singh engaged McKinsey and Trillian before the contract was finalised.
“Anoj Singh, Mabelane and Govender are responsible for allowing payment of invoices that should not have been paid; the payments were unlawful due to the flawed contracting process, and involved excessive overpayment to Trillian and McKinsey,” said the report.
It added that Eskom later paid compensation of R1.6 billion to McKinsey and Trillian for the early termination of the contract.
“The R1.1 billion that McKinsey received between the MSA settlement and 2015 contract payments was nearly 10 times what it had earned from Eskom in previous years,” stated the report. Eskom also paid Trillian, despite not having a contract.
“Another disturbing factor is the fraudulent nature of the invoice sent by Trillian to justify their R595 million share of the settlement,” said the report.
It slammed senior officials at Eskom for benefiting from a corrupt relationship with these companies.
The commission has recommended legal action should be taken against members of the Eskom board in 2014 who took a decision to push out three executives.
This was against their fiduciary duty as Eskom was forced to pay the former executive millions.
The former executives were paid R18 million.
The commission has called for the prosecution of Koko and Singh for the R1.68 billion pre-payment to Tegeta.
He said in total Eskom was looted of R14.7 billion in the state capture project and he said senior officials had colluded.
“In total, R14.7 billion of Eskom’s contracts are calculated to have been afflicted by State Capture according to the Flow of Funds’ investigation and, of this, McKinsey’s MSA and Corporate Plan contracts account for R1.1 billion, and related payments to Trillian account for R595.2 million from these two contracts,” said the report.
Read State Capture Commission Report Part IV Vol I
Read State Capture Commission Report Part IV Vol II
Read State Capture Commission Report Part IV Vol III
Read State Capture Commission Report Part IV Vol IV