State Capture Inquiry: Anoj Singh details his part in McKinsey contract
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Johannesburg - Former Eskom chief financial officer Anoj Singh returned to the Commission of Inquiry into State Capture on Monday to detail his involvement with management consulting firm McKinsey and Company.
Proceedings got off to a slow start after Singh and his team were an hour and a half late, compelling Deputy Chief Justice Raymond Zondo to adjourn the proceedings to accommodate the delays.
An irate Judge Zondo described the unfolding of events as unacceptable.
Once on the stand, Singh, who brought an eight-page affidavit with “voluminous” annexures to supplement his testimony, said he had no personal knowledge of whether the strict conditions set out by the company were followed when payments were made to its subcontracted company, Trillian.
McKinsey and Trillian have been implicated in allegations of state capture after securing multimillion-rand contracts with Eskom under Singh’s tenure.
The inquiry previously heard that Trillian was paid R30.6 million in April 2016 for the work it did on Eskom’s corporate plan, even though the contract was only signed the following month.
At that time, Singh maintained that he was not aware if the contract was signed after payment was made.
There are also allegations that no work was done on the power utility’s corporate plan despite millions of rand paid to McKinsey and Trillian.
During his testimony, Singh referred to a letter from McKinsey addressed to Krish Govender at Eskom in September 2015, referring to a professional services contract and provision of consulting services between Eskom and McKinsey.
In the letter, McKinsey states that it had subcontracted Trillian and sets out conditions as to how payment should be made by Eskom.
The letter further states that Trillian could invoice Eskom directly on condition that McKinsey issues a written confirmation of services performed by Trillian and that the “correctness of the amount to be invoiced” is checked by McKinsey.
When questioned whether or not these conditions were followed before payment was made, Singh agreed that he had no personal knowledge as to whether or not these conditions were complied with.
Following his last appearance at the commission, Singh’s advocate, Anneline van den Heever, said they had prepared the affidavit as they believed it was in the best interests of the commission that they provide clarity on some issues raised previously.
In his previous appearance at the commission, the Master Services Agreement (MSA) between McKinsey and Eskom in 2016 was in question. There had also been a 2015 contract that was terminated by agreement, leading to huge early cancellation costs by Eskom, which paid in excess of R1.7m to both McKinsey and Trillian.
At that time, Singh told the Commission that the question needed to be posed to the finance or procurement team to answer as to how and why payment was processed in the manner it was, but Judge Zondo pointed out that Singh was in charge of the finance team.
Singh explained that, in terms of delegation of authority, there was a requirement for certain authority levels to approve contracts. Once they were approved, the payment process did not “require that it came back to me”.
Singh is accused of overseeing massive questionable transactions made in favour of Gupta-linked companies while chief financial officer at first Transnet and then Eskom.
Under Singh’s watch, Eskom made payments totalling about R600m to Trillian. These payments were based on Trillian’s claim that it was a subcontractor for McKinsey, as there was no contract entitling Trillian to any payment from Eskom.
In August last year, three years after lobby group Organisation Undoing Tax Abuse (Outa) laid a complaint, the South African Institute of Chartered Accountants (SAICA) found Singh guilty of 12 charges relating to his time as CFO at both Transnet and Eskom.
SAICA found that Singh was grossly negligent, dishonest, showed a “clear lack of accountability” and committed serious breaches of the SAICA code of conduct while in important positions at Transnet and Eskom, resulting in them suffering “substantial financial prejudice”.
Singh was suspended from Eskom in late 2017, pending a disciplinary process, and resigned in January the following year, with immediate effect.