Technology services group EOH has welcomed the Democratic Alliance’s (DA’s) intention to pursue legal action against it, saying the move solidifies its quest to rebuild an ethical company.
Responding to the public notice by the official opposition, the DA, that it will lay a corruption charge against EOH and executive mayor of Johannesburg Geoff Makhubo, the company says the move supports its efforts to clean up the beleaguered JSE-listed group.
“The DA’s announcement to pursue legal action in this regard further legitimises the comprehensive steps EOH’s new board has taken over the past two years to create the EOH of today, which is an ethical organisation built on best practice governance, risk and compliance principles,” says Fatima Newman, chief risk officer, EOH.
On Tuesday, the DA announced plans to lay a criminal charge against the company, saying it wants EOH pay back over R1 billion received for the SAP contract with the City of Johannesburg.
This follows revelations at the Zondo Commission about money flows between Makhubo and EOH, showing alleged corruption. The DA wants both the mayor and the company to account for betraying the city and its residents.
Leah Knott, DA City of Johannesburg caucus leader, noted the Zondo Commission has now laid bare the fact that the city paid nearly R1 billion to EOH over the past 10 years for a broken SAP system that is at the heart of the billing nightmare which residents are faced with daily.
EOH has been working the city’s SAP system for 12 years, having started working on it in 2009.
“If EOH think that they can vanish into the night without any consequences, then they can think again. We cannot let corruption and state capture go unpunished. Mayor Makhubo and EOH have stolen hundreds of millions from Johannesburg residents, who have been left with a crumbling city and a broken billing system,” said Knott.
However, Newman says: “EOH notes the intention expressed by the DA to take legal action against implicated previous EOH management and related parties. EOH welcomes this move and that of any other interested parties who are willing to support the efforts by the new EOH board to right the wrongs of the past.”
According to Newman, this is in line with the actions of the current board to transparently resolve the legacy corruption issues, including submissions to the Financial Intelligence Centre, the Special Investigating Unit (SIU), National Treasury, the Hawks and the Judicial Commission of Inquiry into allegations of state capture.
“EOH is proud to have been able to support the work of the commission and our judicial system through the evidence presented by EOH Group chief executive officer Stephen van Coller and EOH’s legal advisor Steven Powell – head of ENSafrica’s Forensics Department.
“EOH has come full circle in its commitment to rebuild the organisation and fully supports the commission, the SIU and other relevant law enforcement agencies’ efforts to remediate past injustices.”
Powell was instrumental in exposing “suspicious payments” when he probed EOH’s tender irregularities.
Powell and his team were appointed by EOH after Microsoft, in February 2019, terminated its contract with the company, as a result of an anonymous whistle-blower filing a complaint with the United States Securities and Exchange Commission about alleged malfeasance to do with a R120 million contract with the SA Department of Defence.
The ENSafrica investigation found evidence of a number of governance failings and wrongdoing at EOH, including unsubstantiated payments, tender irregularities and other unethical business practices, primarily limited to the public sector business.
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