Business 25.1.2018 10:56 am

Eskom makes about-turn on R1bn payment to McKinsey – report

Eskom makes about-turn on R1bn payment to McKinsey – report

Eskom has reportedly overturned its position that its R1-billion contract with global consultancy firm McKinsey was unlawful.

The Business Day reported on Thursday that the state-owned power utility had declared the payment above board, despite prosecutors regarding the contract as proceeds of crime.

In October last year, Eskom wrote letters of demand to Mckinsey and Gupta-linked advisory group Trillian to pay back R1.6 billion paid out by the power producer to the companies between 2016 and 2017 following interim findings from its investigations that revealed the payments were unlawful as they were not approved by National Treasury.

According to Business Day, the decision by Eskom to overturn its position on the contracts appeared to be a desperate attempt by the utility’s executives to avoid being held accountable and criminally liable for paying McKinsey and Trillian without a valid contract.

McKinsey has previously said it would repay all fees received from Eskom if a high court review found that its contract with the utility was unlawful.

“Business Day has seen emails outlining Eskom’s new position written earlier in January by then acting CEO Sean Maritz to McKinsey, shortly before he was replaced by Phakamani Hadebe.

“In emails sent on January 16, Maritz withdrew the Bowmans [law firm] letter of demand and said that the Eskom board had ‘finalised its investigation’ into the deal and found no wrongdoing by Eskom executives, declaring that ‘the payments are valid’,” the report stated.

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