Eskom ‘deliberately’ ignored warnings about McKinsey, Trillian contract – report

It has emerged that Eskom deliberately ignored advice by its own legal team – at least four times in two years – not to go ahead with the controversial McKinsey contract, or pay Gupta-linked firm Trillian.

According to a report by EWN, the 29-page document compiled by Eskom’s legal team was handed to Public Enterprises Minister Lynne Brown on September 1, and is said to lay bare the relationship between the power utility and the consultancy firms.

Brown said she had not received the final Eskom report about its dealings with Trillian, as she asked for clarification on certain issues.

The power utility reportedly admits in the report that it had ignored opinions as far back as 2015 about its dealing with McKinsey and Trillian.

“The report confirms that Eskom was first warned two years ago that its contract with McKinsey was illegal, and would go against Treasury’s instructions to save costs.

“It now appears that advice from the utility’s own legal team – external lawyers Oliver Wyman and Cliffe Dekker Hofmeyer – was purposely disregarded,” EWN reported.

Last month, Eskom admitted that it had lied that Trillian and McKinsey were paid R1.6 billion between April 2016 and February 2017 for joint consultancy work done in 2015 and 2016.

This was after New York-based management consultancy firm Oliver Wyman raised suspicions about the payments and recommended a legal review. Eskom initially claimed the payments were above board after the release of a damning report into Trillian by advocate Geoff Budlender.

Budlender was appointed by the former chairman of Trillian, Tokyo Sexwale, to investigate the company’s role in state capture. In his report, which was released in June, he found that Eskom paid Trillian R266 million for services without contracts in 2016.

Trillian is a financial services company in which Salim Essa – a close business associate of the Guptas – sold his controlling shares in June as pressure over allegations of state capture mounted.

Anoj Singh suspended

Eskom’s acting board chairperson Zethembe Khoza on Thursday told EWN the utility’s CFO Anoj Singh’s special leave had now been converted to suspension, and two other officials were resuspended.

Singh was put on special leave in July after the Development Bank of South Africa (DBSA) threatened to recall its R15 billion loan from the power utility if no action was taken against him.

“Some of them have already been suspended – like Mr Singh, Prish Govender and Charles Kalima. It’s unfortunate that the things only came up now. It’s overwhelming because we’ve been investigating left and right,” Khoza said.

According to the report by Eskom’s own legal team, Singh and the two officials reportedly decided to go ahead with the McKinsey contract despite knowing that Trillian was “involved”. It also appeared they went out of their way to ensure the Gupta-linked company was paid, even though there was no contract in place.

– Additional reporting African News Agency