A web of “suspicious payments” was unravelled yesterday at the Zondo Commission by Steven Powell, ENSafrica lead investigator, who probed EOH’s tender irregularities that threatened to collapse the JSE-listed company.
Powell and his team were appointed by EOH after software giant Microsoft, in February 2019, terminated its contract with the IT services company, after an anonymous whistle-blower filed 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.
On Monday, at the State Capture Commission, Stephen van Coller, CEO of EOH, laid bare the governance issues that engulfed the JSE-listed company, including how rogue employees and directors thrived on tender fraud.
Yesterday, Powell told justice Raymond Zondo, who chairs the commission, that questionable transactions and payments were made by EOH between 2015 and 2017 to some politically-connected individuals.
The commission heard that then EOH director Jehan Mackay made a series of payments to ANC officials, including former party spokesperson Zizi Kodwa, who is now deputy minister of state security; as well as to former president Jacob Zuma’s advisor, Siyabulela Zintwa; and Reggie Nkabinde, former treasurer of the ANC Youth League.
“There was a payment of R50 000 to Mr Kodwa again and on 4 December there was a payment of R40 000 to Mr Kodwa and on 18 December 2015, there was a payment of R100 000 to Mr Siyabulela Zintwa,” Powell said.
“On 2 February 2016, there was a payment of R30 000 to Mr Zizi Kodwa; on 27 January 2017, there was a payment of R50 000 to Mr Zintwa; and the last entry, chair, is June 2017. There was a payment of R500 000 to the FNB bank account of Mr Nkabinde.”
In his submissions, Powell also named Johannesburg mayor Geoff Makhubo as one of the individuals who irregularly received payments from EOH through his company, Molwewane Consulting.
At the time, Makhubo was treasurer-general for the ANC’s greater Johannesburg region and the city’s finance member of the mayoral committee.
Powell told the commission that Makhubo wrote various e-mails to EOH employee Patrick Makubedu requesting over R6 million in payments to be made to the ANC’s accounts in 2015 alone.
One of the e-mails Makhubo sent, which Powell read into record at the commission, stated: “ANC January 8 Anniversary national event, transport, accommodation and refreshments R250 000; total R490 000; grand total R6 180 000 and then what follows are the ANC banking accounts and following the banking details, there’s a note from Geoff Makhubo, your support is highly appreciated and we thank you in advance for your support and commitment towards strengthening our democracy.”
Powell said: “Chair, I do want to emphasise that some of the entities that we have investigated, such as Zyalack and Geoffrey Makhubo, were not part of our initial investigation but when the commission asked us, because we have access to EOH data and the server, we were able extract a lot of information that will be part of testimony today.
“But I do want to highlight that we haven’t had access to Makhubo’s data per se, but we do have details of what communications he had with EOH people and we have details of payments made to Makhubo through his company Molwewane.”
According to Powell, EOH had secured several payments from the city without any work being delivered, and a former EOH employee, Patrick Makubedu, was cited as the points man in making the payments to Makhubo’s company without contracts.
On Monday, Van Coller told the commission that individuals suspected of wrongdoing are no longer employed by the company and several former employees, primarily from the public sector vertical team, have been reported to law enforcement agencies.
According to Van Coller, the investigation unearthed multiple points of failure in governance and inadequate systems, creating an enabling environment for wrongdoing, including: “Opaque delegation of authority, with significant responsibilities granted to a few executives; artificial/inflated software licence sales; potential tender irregularities; use of politically connected middlemen that are suspected to have been used as introducers and sales agents.”
Furthermore, he said: “payments were being made to subcontractors in circumstances where there is no evidence that work was done by the said subcontractors. At the time, these payments totalled R1.2 billion, including VAT, and on further investigation, it is currently suspected that the potential irregular payments stand at approximately R865 million.”
Share