Eskom steps in to recover R1.6bn

MCKINSEY, TRILLIAN: PAYMENT UNLAWFUL, SAYS UTILITY

Utility wants AFU to withdraw forfeiture application.

Eskom’s new board has started legal proceedings to force global consulting firm McKinsey and Gupta-linked Trillian to pay back the almost R1.6 billion allegedly unlawfully paid to them, but wants the Asset Forfeiture Unit (AFU) to suspend its bid to seize the money as the proceeds of crime.

Judge Jody Kollapen granted an order in the High Court in Pretoria yesterday allowing Eskom to enter an appearance in the AFU’s application to freeze McKinsey and Trillian’s assets. Eskom’s application for an interim order to stay the forfeiture proceedings, pending the final determination of their application for repayment and an order to preserve the funds until then, was postponed indefinitely.

McKinsey did not oppose the application and repeated it would repay the full amount to Eskom or any other government entity, if the court declared its contract with Eskom was unlawful.

The AFU said in a letter that it recognised Eskom had a direct interest, but proposed proceeding with the forfeiture application with the ultimate purpose of ensuring Eskom got the funds back.

In an affidavit, Eskom acting chief executive Phakamani Hadebe said the almost R1.6 billion payment to McKinsey and Trillian in less than six months was unlawful and that Eskom, as a public entity and the rightful owner, was obliged to recover it. He maintained there was no need for the preservation order or forfeiture proceedings. Eskom would instead seek the direct return of its funds.

Hadebe said the payments were unlawful as there had been no competitive tender process, the agreement with McKinsey contravened National Treasury’s instructions for the remuneration of external consultants and that Eskom never had a contract with Trillian – the small, Gupta-linked consulting firm presented as McKinsey’s development partner.

He said the R1.6 billion was on top of R112 million paid to McKinsey and Trillian for a contract of about three months.

“Throughout this time, senior Eskom officials had improper dealings with Trillian. This included sending confidential information to Trillian representatives, conducting private meetings and accepting holidays in Dubai. These dealings with Trillian have all the hallmarks of corruption,” he added.