Deloitte denies it was part of state capture over Eskom contracts
Eskom is taking legal action to recover funds from Deloitte for contracts awarded under Gupta-linked executives
Auditing firm Deloitte is once again refuting allegations that it was involved in state capture through the Eskom contracts it was awarded.
The state-owned power producer is taking legal action against Deloitte to recover funds for contracts it says were improperly awarded by its former executives.
This forms part of Eskom’s attempts to reclaim funds that were lost through corruption as part of state capture.
Eskom has already recovered R1bn from consultancy McKinsey. It is also applying to the court for the costs of the application to be paid by Eskom’s former CFO Anoj Singh and senior executive Prish Govender, under whose watch the contracts were paid for.
The total value of the different contracts with Deloitte was R207m, including the CFO Transition Lab.
This week the amaBhungane Centre for Investigative Journalism published two articles with details of the alleged dodgy contracts. According to the first article, Deloitte was reportedly awarded two consulting contracts in September 2016, despite its prices being dramatically higher than other bidders, according to an affidavit.
The papers also showed that Deloitte had partnered with Gupta-linked auditing firm Nkonki in late 2015.
Part one of amaBhungane’s report was based on court papers lodged by Eskom, while part two is based on anonymous and confidential sources.
Deloitte said on Friday that it has asked amaBhungane to delay publishing the stories until it has had sight of the company’s answering affidavit to Eskom in the court proceedings.
“We disagree with the allegations, inferences and speculation in both articles,” Deloitte said. “We refute the speculative attempt by amaBhungane to drag Deloitte into the ‘state capture’ narrative despite the lack of evidence to substantiate this claim.”
Deloitte said its relationship with Nkonki pre-dates the company’s affiliation with the Guptas and was based on its competence and skills.
“Nkonki delivered value on all their engagements with Deloitte. Our partnering arrangements were not limited to Nkonki; during the same period we proposed and worked with various other BEE entities on Eskom projects,” the firm said.
Deloitte said it is preparing its answering affidavit in the Eskom court matter where it will put its version of events forward.
While several other firms have been implicated in state capture — auditors KPMG, legal firm Hogan Lovells and consultancy Bain — the court action by Eskom is the first time that Deloitte’s name has been dragged into the scandal.