EOH cautions shareholders for the third time in 2019
A year ago, EOH hired law firm ENSafrica to review all its large, historical technology contracts with the state
Embattled technology group EOH said on Wednesday it was assessing the financial impact of the findings of the investigation into tender irregularities by law firm ENSAfrica. A year ago, EOH hired ENSafrica to review all its large, historical technology contracts with the state.
The law firm's interim report released in July uncovered "suspicious transactions" worth R1.2bn. Among other things, ENSafrica found tender irregularities and "other unethical business practices", including bribery and theft, mainly within the public sector business operated by EOH Mthombo, implicating a small group of employees.
In a cautionary statement released on Wednesday, EOH said the "exact nature of each of the suspicious transactions is in the final stages of being verified and may relate to legitimate transactions, theft or bribery and corruption payments."
EOH expects to have a fuller understanding of the impact of the findings when it releases its financial results for the year to end July 2019, in mid-October.
The group, which reduced the value of certain assets by R1.7bn in April, has warned that more impairments could follow as the group restructures itself and looks to repair its dented reputation.
Until the exact financial impact of the impropriety can be ascertained, the maximum amount under investigation by ENSafrica will remain at the disclosed R1.2bn, EOH said.
EOH advised shareholders to continue to exercise caution when dealing in the group's share price until the outcome of an ongoing investigation is certain.
Its share price closed 4.37% down on Wednesday at R14.