Molefe Seeletsa
Digital Journalist
3 minute read
23 Apr 2021
2:53 pm

Singh denies approving R1.6bn settlement with McKinsey

Molefe Seeletsa

Contract with McKinsey saw Gupta-linked Regiments Capital and Trillian Capital Partners as subcontractors

Former Transnet chief financial officer Anoj Singh on Friday denied having approved the final payment of a R1.6 billion settlement agreement when Eskom terminated its contract with consulting firm McKinsey & Co.

Singh returned to the Commission of Inquiry into Allegations of State Capture for the second day running to continue with his evidence relating to Transnet.

Before proceedings could move on to Transnet evidence, Singh, who is implicated in dodgy dealings with the Guptas in state capture, was questioned about Eskom matters.

ALSO READ: Singh denies feeding confidential Eskom info to Gupta associate

Evidence leader Anton Myburgh dealt with a court judgment in which Eskom sought to recover money it had paid to McKinsey.

McKinsey had a contract with Eskom beginning in December 2015 and cancelled in June 2016.

Singh previously argued that McKinsey’s contract termination by Eskom was legal.

The McKinsey contract saw the consulting firm along with Gupta-linked Regiments Capital and Trillian Capital Partners as subcontractors, pocketing R1.6 billion for what was envisaged to be a turnaround strategy to boost the financially ailing Eskom.

ALSO READ: Anoj Singh sat in Eskom meetings while still at Transnet, Zondo hears

McKinsey, which has paid back R902 million (R1.6 billion with interest) in consulting fees to Eskom, found itself entangled in a company with state capture project credentials, having failed McKinsey’s due diligence, including adherence to black economic empowerment (BEE).

Singh has since dismissed allegations of corrupt activities and that he approved the McKinsey contract.

“I don’t recall.. having arrived [at Eskom] on the 1st of August 2015 – that I sought approval for the McKinsey contract. The contract was approved in July prior to my arrival if I recall correctly,” he said.

Singh rejected claims he was Trillian’s “contact person” when the consulting wanted to deal with matters at Eskom.

“Any connotation as it relates to me being Trillian’s contact person in an unsavory manner I think we reject,” he said.

READ MORE: Eskom paid Trillian R30m without a signed contract, says Singh

Explaining to the commission about the settlement agreement, Singh said he did not approve the payment.

However, the former Transnet official said he did recommend through a memorandum that Eskom board tender committee resolution of 2016 consider the approval, but the committee held the mandate for the approval.

The approval was subject to the termination of the master service agreement with McKinsey.

“Sometime in June 2016, the board tender committee had already taken a resolution to terminate the master service agreement with McKinsey and its subcontractor. And that resolution empowered a settlement process to be engaged upon. So in context I did not approve the R1.8 billion settlement,” he said.

Singh further said R1.6 billion was the eventual amount paid.

“Subsequently to the approval of the R1,8 billion… the tender committee I think at that point approved the payment of R800 million of the R1.8 billion, but there was a settlement process that was ongoing because the eventual amount they actually settled on was R1.6 billion. The settlement agreement was then ultimately signed between Eskom and McKinsey in February 2017,” he said.

ALSO READ: Singh ‘unaware’ he shared flight to Dubai with Gupta lieutenant

Singh also told the commission he did not know that Gupta associate Salim Essa was a Trillian shareholder until the termination of the contract between McKinsey and Eskom.

He further denied claims that he gave Eskom’s confidential information to Trillian and “at all times he conducted himself in the best interests” of the power utility.

Watch the proceedings below, courtesy of the SABC: