Today is not a great day, says EOH CEO
EOH Group CEO Stephen van Coller has blamed eight people in the company for the corruption scandal that hit the JSE-listed IT services company.
This morning, Van Coller held a press briefing announcing the results of an ENSAfrica probe into the company’s shady dealings.
EOH asked ENSAfrica to conduct a proactive comprehensive investigation into EOH contracts to identify any wrongdoing or criminal conduct in the acquisition, award or execution of contracts.
The IT services company says from the probe, suspicious transactions of R1.2 billion have been identified and are being investigated by ENSafrica.
“Today is not a great day. It’s fairly devastating when you join a business and then you have to go through the process that we have just gone through over the last five months. I would never wish it on my worst enemies,” Van Coller said.
Van Coller’s press conference came a day after the resignations of top executives Pumeza Bam; executive director and CEO of EOH subsidiary Nextec, Zunaid Mayet; and executive director and CEO of EOH's ICT business, Rob Godlonton.
From the resignations, some believed the three were going to be implicated in the ENS report today.
However, Van Coller lauded the trio for “amazing leadership” qualities.
“I would like to deal with the announcement that went out last night for Zunaid, Rob and Pumeza. They have, obviously, been with the company for a long time,” he said.
“They have shown amazing leadership by allowing the company to move forward post this investigation by giving new management and board space to move forward. I think this is an example of good leadership that was shown by minister [Nhlanhla] Nene when he wasn’t implicated in anything but he stepped down as finance minister just because he had been there when some things happened. I think we should applaud them for that.”
Nene resigned last year after testifying at the state capture inquiry that he had visited the controversial Gupta family’s Sahara Computer offices and their residence.
Van Coller continued: “It’s really disappointing when a few people take so much from so many and this is why the zero tolerance on corruption stance by the board is so important.
“The ugly was finding that we had some problems. There is some silver lining in that we found very quickly that it’s a small group of people, actually about eight, perpetrating wrongdoing out of one company, EOH Mthombo – 93% of this R1.2 billion of these suspicious payments came from there.”
He did not name the eight.
According to Van Coller, those eight people paid 84% of those payments to about 20 suppliers. Some of them are the same directors, he noted.
He explained that in finding some of this wrongdoing, the company discovered it sits between some bribery and corruption issues.
“Some people were just stealing from us – just putting in invoices and taking money out of the company where they were directors. In some cases, they were overpaying enterprise development suppliers for very little work done.”
However, he said in that R1.2 billion, there are also possibly some very legitimate payments. “We have to split that out and that in the next stage ENS will be embarking on.
“How we filtered these payments was having to look at things that looked funny, such as single-director companies; companies that when we interviewed staff, they haven’t seen any of their projects; round numbers for payments when you are supposed to be doing time and material. Some of the whistle-blowers pointed us to the contracts they were worried about.
“Once we had filtered that with keyword searches and all that, we ended up with this R1.2 billion.”
At the time of publishing, EOH’s share price had dropped 11% to R18.50.