CORRECTED: Eskom goes after McKinsey and Trillian for R1.6bn payment
The acting CEO says dealings with Gupta-linked company have all the hallmarks of corruption
Eskom has instituted legal proceedings to recoup R1.6bn paid to global consulting firm McKinsey and Gupta-associated Trillian Capital.
McKinsey has in the past indicated its willingness to pay back its share of about R1bn of the R1.6bn but has insisted that the payment be made on the basis of a court order.
Eskom launched a court application a few weeks ago for the repayment.
This week the utility was granted permission in the High Court in Pretoria to make an appearance in the application by the Asset Forfeiture Unit (AFU) for the assets of McKinsey and Trillian to be frozen as the proceeds of crime.
Eskom would prefer the R1.6bn not to be frozen as other processes would then be necessary to get it unfrozen when its own court application for the repayment has been concluded
According to a report in the Citizen newspaper, Eskom’s application for an interim order to stay the forfeiture proceedings, pending the final determination of its own application for repayment and an order to preserve the funds until then, was postponed indefinitely.
Phasiwe said Eskom would prefer the R1.6bn not to be frozen as other processes would then be necessary to get it unfrozen when its own court application for the repayment has been concluded.
National Prosecuting Authority spokesman Luvuyo Mfaku said the AFU was aware of two court applications by Eskom — a review application to declare that the funds received by McKinsey and Trillian were the proceeds of crime; and an application to stay and ultimately set aside the preservation and forfeiture application by the national director of public prosecutions so that the funds were paid directly to Eskom.
“The AFU’s position is that it will not oppose Eskom’s relief to the extent that it does not unduly delay or affect finalisation of the preservation and forfeiture proceedings. We confirm that the AFU will proceed with the forfeiture application to ensure that the financial losses suffered by the state are recovered. Any attempt to oppose either the preservation and forfeiture proceedings would be strenuously contested,” Mfaku said.
“The relief sought by Eskom, to the extent that it seeks to derail the preservation and forfeiture proceedings will be opposed. Having said that we confirm that the AFU is prepared to recognise that Eskom does have an interest in the subject matter of the application and that it may well be the victim and complainant in the matter.
“The AFU and Eskom legal representatives have recently met with the view of exploring the most equitable way of dealing with the matter,” Mfaku said. They had agreed to explore a framework of co-operation to ensure the recovery of losses on several other matters.
The Citizen referred to an affidavit by Eskom acting CEO Phakamani Hadebe, who said the R1.6bn payment to McKinsey and Trillian in less than six months was unlawful and Eskom, as a public entity and the rightful owner, was obliged to recover it. He maintained there was no need for the preservation order or forfeiture proceedings as Eskom would seek the direct return of its funds.
Hadebe said the payments were unlawful as there had been no competitive tender process, the agreement with McKinsey contravened the Treasury’s instructions for the remuneration of external consultants and Eskom never had a contract with Trillian.
“Throughout this time, senior Eskom officials had improper dealings with Trillian.
“This included sending confidential information to Trillian representatives, conducting private meetings and accepting holidays in Dubai. These dealings with Trillian have all the hallmarks of corruption,” Hadebe added.
*In previous version of this article, Business Day erroneously reported that Trillian had agreed to repay part of the R1.6bn. Trillian contacted Business Day to point out that the company would in fact oppose the application. Business Day regrets the oversight.