DA presses EOH to pay back R1bn to City of Joburg

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The Democratic Alliance (DA) wants EOH to pay back over R1 billion received for the SAP contract with the City of Johannesburg.

The official opposition says revelations at the Zondo Commission about money flows between executive mayor Geoff Makhubo and the JSE-listed EOH show corruption, and both the mayor and the company must account for betraying the city and its residents.

Leah Knott, DA City of Johannesburg caucus leader, says 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, since 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,” says Knott.

Makhubo appeared at the Zondo Commission on Monday, defending “donations” from EOH, with evidence leader advocate Matthew Chaskalson submitting that he had “a corrupt relationship” with the company.

Chaskalson grilled the mayor over a series of payments made by EOH to Makhubo’s company, Molelwane Consulting, suggesting they were in exchange for city tenders, including the SAP tender.

A web of “suspicious payments” was exposed by Steven Powell, ENSafrica lead investigator, who 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.

Nonetheless, Knott says: “I will be laying criminal charges against him and EOH for the corrupt SAP contract which has cost the city hundreds of millions, and will write to EOH to demand that they return all money paid to them by the city. I also call on the ANC in Gauteng to return the bribe money paid by EOH.

“Even EOH's own forensic investigation by ENSafrica confirmed that no work was done for the half million paid to Makhubo's company, Molelwane Consulting, which paid the money to him and his family. Makhubo can try to spin this all he likes but Johannesburg residents aren't buying it.

“First there was the multimillion-rand contract in 2014 which was supposed to fix the mess left by Parks Tau from 2009, and then the R404 million contract that was hurriedly signed in 2016 with EOH before the elections. Neither of these contracts delivered any improvement to the city.”

Neither EOH nor the mayor’s office had responded to ITWeb’s request for comment by the time of publication.

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