Trillian open to fraud charges by Eskom
• Documents show advisory firm bosses tried to hide Salim Essa’s majority shareholding from Eskom
Scandal-wracked financial advisory firm Trillian’s efforts to hide its links to the Guptas have left it vulnerable to fraud charges by Eskom, according to new documents that Business Day has seen.
Scandal-wracked financial advisory firm Trillian’s efforts to hide its links to the Guptas have left it vulnerable to a fraud charge by Eskom.
New documents that Business Day has seen show Trillian CEO Eric Wood and former chief financial officer Tebogo Leballo sought to hide the majority shareholding of Gupta lieutenant Salim Essa from Eskom and McKinsey’s global risk committee.
Investigators probing the unlawful payment of R1.6bn in fees to Trillian and McKinsey for six months’ work discovered Trillian was registered on Eskom’s supplier database as wholly white-owned when it was awarded contracts.
This led Eskom to conclude Trillian had invoiced and been paid “on a fraudulent basis” by claiming it was McKinsey’s black empowerment supplier development partner.
By then Trillian had invoiced Transnet for R93m and Eskom for R30.6m. McKinsey had also signed a contract with Eskom that resulted in Trillian being paid another R565m.
Investigators from G9 Forensics recommended that Eskom should charge Trillian for fraudulently misrepresenting its black economic empowerment (BEE) status to win contracts.
When Business Day put this to Trillian earlier in October, the company insisted it “had at least 60% BEE at all times for the duration of the Eskom contracts. Salim Essa, a black South African, held 60% of the total issued share capital in Trillian from November 2015”.
The company emphasised it had “made no fraudulent representations in regard to McKinsey and Eskom”.
Trillian’s share register supports the firm’s claim that it did not defraud Eskom, showing Essa as sole owner of Trillian Holdings became 60% owner of Trillian Capital Partners in November 2015.
Essa sold his stake earlier in 2017 following a damning report into the firm by advocate Geoff Budlender, who found its partnership with McKinsey was a “sham arrangement” to ensure the Eskom taps kept flowing, although McKinsey denies this.
Budlender also concluded Trillian had been dishonest when it claimed the company had no links to the Guptas.
An e-mail Wood sent to McKinsey’s then SA senior partner Vikas Sagar in March 2016 implies that Trillian had not yet transferred 60% of its shares to Essa, despite evidence to the contrary in its share register.
“I have been engaging with a number of potential BEE shareholders,” Wood said in the e-mail he sent to Sagar on March 14 2016. “I wish to assure you of my commitment in this regard towards achieving at least 60% black ownership of Trillian.”
On April 11 2016, Leballo conveyed the same message in a letter e-mailed to Eskom chief financial officer Anoj Singh.
“Trillian Capital Partners is in the process of transferring 60% shareholding to a black shareholder and will update CIPC [Companies and Intellectual Property Commission] records of this shareholding once transferred,” he said. Leballo also made a sworn statement.
However, testimony and evidence from former Trillian employees and Wood’s business associates suggest the real purpose of the e-mails was to mislead McKinsey’s global risk committee, which was asking hard questions about the shareholding of Trillian.
A whistle-blower statement from Bianca Goodson, who headed Trillian’s management consultancy division, makes it clear Eskom and McKinsey officials in SA knew Essa was in charge. She recounted attending meetings from December 2015 with Eskom and McKinsey officials at Essa’s Trillian offices in Melrose Arch, Johannesburg.
If the e-mails are authentic — and Trillian has said nothing to suggest they are not — that leaves two possibilities: either Trillian fraudulently backdated Essa’s share certificates or the company failed to disclose his stake because he had become a “politically exposed person”.
This was in fact one of the reasons McKinsey gave for breaking up the marriage with Trillian after concluding its due diligence later in March 2016.
Asked which version of events was true, Trillian dodged the question. “Trillian reiterates that McKinsey was well aware of Mr Essa’s shareholding in Trillian at all times,” it said.
Leballo did not reply to messages left for him over several days.