Today is a bittersweet day as EOH, the legal entity, got fined for material misstatements in its accounts in 2017 and 2018.
On one hand it is exactly right, as the legal entity did transgress the JSE listing rules — the new management pointed that out to the JSE in 2019. On the other hand it feels like someone is bayoneting the wounded after the battle is finished, as the new management and new board are easy targets to fine as they took the tough decisions on restating the accounts and creating the transparency.
When deciding to assist in professionalising EOH (prior to realising the existence of the looting) it was the prospect of saving as many of the 11,000 jobs, reviving the brilliant youth development programme and ensuring there was limited disruption to the many important parts of our economy, EOH sits at the heart of. However, in saving the failing business the new management and board have had to fight off the wolves as the legal entity lives on regardless.
As we pay fines, penalty interest, old unused licence fees and return stolen money we don’t have, I think about the current staff who took a 20% pay cut for three months, endured reduced incentive payments and limited increases, all while working extreme hours to save the business.
The unfairness of this seems to be a significant failing of capitalism. I cannot understand why anyone would try to save a failing business when the reality is that the better you do the more wolves arrive at your door. It feels like stopping to pick up someone at the side of the road who has been stabbed and driving them to a hospital, only to be told when you arrive that they will be admitted only if you pay all the hospital costs. Hobson’s choice — leave them to die at the hospital door or go hungry for a while to save their life.
I suppose the final outcome of whether it is bitter or sweet will depend on whether the JSE has the stomach to take on the individuals who sat on the board in those years, and not just do the easy part by effectively sanctioning new management and thinking its job is done.
Stephen van Coller
Group CEO, EOH
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