Eskom gave Trillian R266m, inquiry finds
Gupta-linked company accused of dishonesty Report gives clues on funds moved to Dubai
Politically connected financial advisory firm Trillian was paid R266m by Eskom for work it never did.
This is one of several explosive revelations contained in a report of an inquiry by advocate Geoff Budlender into Trillian released yesterday.
Trillian, which is majority owned by Gupta lieutenant Salim Essa, benefited from contracts running into hundreds of millions of rand. The report says the contracts are suspect.
The report also provides clues on how the Guptas may have moved money from SA to Dubai, and further evidence supporting former public protector’s Thuli Madonsela’s view that Trillian had helped pay for the Gupta purchase of Optimum coal mine from Glencore.
It reveals how the company invoiced R122m for advisory services, including for Eskom’s controversial R4bn Duvha power station project, despite previous denials by both Trillian and Public Enterprises Minister Lynne Brown.
The report exposes the central role allegedly played by Eskom chief financial officer Anoj Singh in making sure business was funnelled to Trillian after the Guptas bankrolled several of his stays at the Oberoi Hotel in Dubai, reportedly revealed in leaked e-mails.
Trillian yesterday declined to respond to specific questions, but said in a statement that many of the allegations in the interim report “appear to be incorrect”.
“Trillian has not been given an opportunity to comment on the contents of the report. Once Trillian has had an opportunity to consider the contents [it] will release its own comprehensive response,” it said.
Budlender’s report is a severe indictment of the actions of Eskom in awarding the Gupta-linked company lucrative contracts. It points out that Eskom said in May it had not paid any money to Trillian, as “no services were used”. But Budlender cited three invoices submitted by Trillian in 2016, totalling R226m stamped “paid”.
“If it is correct that ‘no services [of Trillian] were used’ it is for Eskom to explain why it paid the quarter of a billion rand,” the
report says. The report points out the work was done by Regiments, a company of which Trillian CEO Eric Wood was a director. Trillian and Regiments are embroiled in pending litigation, including over work started by one company and continued by another.
But the report says this does not explain why Eskom paid Trillian. “It is difficult to see on what basis Eskom … could have lawfully made payment to Trillian for work for which it did not tender, for which it did not have a contract and which it did not perform.
“At best Trillian may have had a claim against Regiments. That would not mean that Eskom could lawfully pay Trillian.”
The report also points out that Trillian originally had a contract with international consultancy McKinsey as a “supplier development partner” for its Eskom work. A former Trillian executive told Budlender when McKinsey had sought to end its relationship with Trillian, due to its Gupta links, she was told Singh would ensure work would continue to be funnelled to the company.
The report also suggests Brown lied or was misled when she told Parliament that Trillian had not performed any advisory work on Eskom’s Duvha project. The report says a former Trillian executive had informed Budlender that Wood had undertaken negotiations on behalf of Regiments for Eskom to settle an insurance claim after a boiler at Duvha power station had exploded.
“They were also advising Eskom on the supply chain appointment and on people to do the repair,” the report says.
On August 10 2016, Trillian sent Eskom an invoice for R122.2m, with “Duvha” listed under a description of services rendered. The invoice was stamped “paid” three days later.
The report also cites a letter from McKinsey written to Wood that refers to the “Eskom Duvha boiler purchase”. “The document appears to confirm that Trillian was working with McKinsey on an Eskom project, the Duvha boiler purchase. It also belies the answer which [Brown] gave in this regard in the National Assembly,” the report says.
Eskom said on Thursday that “through its payment governance processes [it] noticed the anomaly regarding Duvha on the invoice and immediately queried the line item. The supplier subsequently reversed the line item.”
Eskom denied Singh was party to any wrongdoing. It said its board had approved a mandate to negotiate with McKinsey and its subcontractors in June 2015 “for a risk-based contract”.
Singh only “began employment at Eskom in August 2015”, said Eskom spokesman Khulu Phasiwe. “After a review of the contract that included queries to the contractor, Mr Singh suggested cancellation of the contract to the board during the first half of 2016,” he said.
An external review was conducted of all payments linked to the contract. “The report concluded that payments due to the contractor [were] based on prudent costs incurred and value created,” Phasiwe said.
The report provides suggestions on how the Guptas may have externalised their funds to Dubai. It points out that the former Trillian executive stated on 18 January 2016 she had been introduced to E Gateway Global Consultants, a company registered in Dubai, as the preferred Trillian partner for “the Eskom Generation work stream” at Essa’s behest.
“If Trillian had co-operated in the inquiry, I would have wished to investigate precisely why Mr Essa required that it contract with E Gateway.”
Throughout his report, Budlender accuses Trillian of being dishonest, evasive, obstructive, untrustworthy and repeatedly trying to shut down his inquiry on spurious grounds. Budlender also considered Trillian’s efforts to distance itself from the Gupta family as “dishonest”.
Wood said yesterday, after the report was released, he had been “relentlessly and unfairly tarred and feathered” and categorically denied being involved in any corrupt practices. /With Graeme Hosken and Kyle Cowan.