EOH unit Nextec Advisory goes into liquidation
JSE-listed technology services company EOH is liquidating its business unit Nextec Advisory.
The company confirmed the development, saying Tshwane Trust has been appointed as the liquidator after Nextec Advisory failed to implement a successful turnaround strategy.
According to a source who told ITWeb of the liquidation, employees are set to lose their jobs as a result of the latest development.
In a statement, EOH says Nextec Advisory is a wholly-owned subsidiary of EOH Mthombo and an individual legal entity within the iOCO grouping of the EOH Group.
Last year, EOH told ITWeb that EOH Mthombo, a company that was largely implicated in corrupt payments, will be closed within two years.
This after EOH’s new management team requested an investigation by ENSAfrica, which revealed about R1.2 billion worth of suspicious payments, especially in public sector contracts.
ENSAfrica was requested to conduct a proactive comprehensive investigation into EOH contracts to identify any wrongdoing or criminal conduct in the acquisition, award or execution of contracts.
EOH Mthombo client contracts will be ceded to another appropriate legal entity within the group “to ensure continuity and continued service delivery for our clients, subject to the required regulatory approvals and client consent.
“This forms part of EOH’s reorganisation process for enhanced governance, which includes the ring-fencing of problematic contracts from the past into a single entity to provide focused management and resolution of the issues,” said the company.
With respect to the suspicious payments from EOH Mthombo, EOH reiterated the wrongdoing took place between 2014 and 2017, and was limited to eight people, all of whom have exited the group.
It, however, says Nextec Advisory should not be confused with the NEXTEC division within the EOH Group.
NEXTEC provides business process outsourcing services and intelligent infrastructure solutions, says the firm.
“Nextec Advisory confirms that following an unsuccessful turnaround initiative to drastically reduce costs and adequately resolve its business model, it has had to undergo a creditors’ voluntary winding-up as per section 351 of the Companies Act,” the company says.
It adds this will result in the wrap-up of its financial affairs in an orderly manner and minimisation of the impact on its creditors, staff, clients and suppliers.
EOH explains that Nextec Advisory’s main line of business was its use of a radio frequency identification tracking solution developed for the public sector.
It points out that the line of business dried up, and despite significant effort for an extended period of time, Nextec Advisory has not been able to leverage the product into the private sector.
EOH adds that due to the nature of its client base, Nextec Advisory was included in the population of the ENSAfrica investigation but no negative findings came out of the process.
“At the time of liquidation, the Nextec Advisory CEO position was vacant. EOH can confirm that Tshwane Trust was formally appointed as liquidator and is now in full control of the balance of the process and stakeholder engagement.
“Further to this, EOH has offered to assist Tshwane Trust with fulfilment of existing Nextec Advisory client requirements as this process unfolds.”
EOH has made headlines over the past couple of years for wrongdoing. Now the company, under the leadership of group CEO Stephen van Coller, is clearing its name following allegations of corruption and falsifying financial results.