Eskom ‘ignored’ evidence in Koko case

Eskom was provided with evidence of major payment irregularities involving Impulse International, a company acting CEO Matshela Koko’s stepdaughter had an interest in, before awarding it contracts worth more than R1bn.

Eskom’s failure to investigate the evidence it was given in 2015 before awarding new contracts to Impulse raises further questions as to whether the company was receiving special treatment from the power utility.

The Sunday Times reported that Impulse was awarded eight contracts worth R1bn from the division Koko headed after his stepdaughter Koketso Chomo was appointed director in April 2016 and that she was a beneficiary of a trust with an interest in the company.

The newspaper also reported Koko had allegedly bullied some of Eskom’s main contractors to award the work to Impulse. Koko denied this and said he had asked Chomo to resign as director and trustee as soon as he found out about her role.

Last week, Eskom appointed law firm Cliffe Dekker Hofmeyr to investigate the allegations.

However, Business Day has

confirmed from two independent sources that Eskom’s assurance and forensic department was asked to investigate Impulse’s dealings with the utility as far back as December 2015. Impulse was accused of supplying fraudulent timesheets, while doing quantity surveying work at Medupi power station for Eskom contractor PB Power, in 2014 and 2015.

“We submitted a request for an investigation but it just went into a black hole,” one source said this week. “I would still like to see this investigated because I have heard the company is likely to be successful in its bid to be awarded another sixmonth extension for its services at Medupi.”

An e-mail exchange between Eskom officials in March, seen by Business Day, reveals that Impulse was accused of submitting and being paid for invoices in 2015 for months after its contract had expired.

“It also transpired that a number of the Impulse [quantity surveyors] appeared not to have done work they claimed to have done. Consequently, PB called in Turner and Townsend to review the work and timesheets, which had been submitted and found significant discrepancies,” the email said. It concluded there could be “sufficient documentary evidence, held by PB, to prove fraud before a court”.

Impulse CEO Pragasen Pather said this week he was “totally unaware” of allegations that his company had submitted fraudulent timesheets. “I can confirm there is no litigation and there are no claims against us.”

Impulse was still on Eskom’s preferred supplier list, he said. “It’s business as usual.”

His company was embroiled in a payment dispute with PB Power in 2015 that threatened the viability of his business. “We were getting to the point where we weren’t able to pay people. I had to decide either to apply pressure or go into liquidation.”

The dispute “was decided amicably” when PB Power paid Impulse what it was owed.

Eskom declined to comment on why it had failed to probe Impulse when asked to in 2015; why it had awarded the company contracts worth R1bn after it had been provided with evidence of payment irregularities; and whether these would form part of the current investigation by Cliffe Dekker Hofmeyr.

“Disclosing the scope of the investigation (is) risky to the objective of the investigation itself; therefore we are not at liberty to do so,” the power utility said on Thursday.

“Commenting on the minute detail of the investigation, while it unfolds, is generally accepted as being imprudent.”

PB Power declined to comment, citing “nondisclosure agreements with Eskom”.