Eskom: payback time for Deloitte

Eskom is taking legal action against Deloitte Consulting to recover funds for contracts that it says were improperly awarded by its former executives, Eskom chair Jabu Mabuza announced on Monday.

The action forms part of Eskom’s attempts to reclaim funds that were lost through corruption as part of the state capture project.

It has recovered R1bn from consultancy McKinsey. It is also applying to the court for the costs of the application to be paid by Eskom’s former CFO, Anoj Singh, and senior executive Prish Govender under whose watch the contracts were paid.

The two tenders related to “the CFO Transition Lab” for which Deloitte Consulting was paid R207m, says Eskom.

Mabuza, who is also acting CEO, said: “We have promised South Africans that we will be pursuing all ill-gotten funds that were extracted from Eskom during the days of state capture. This action seeks to restore confidence in Eskom’s governance processes and procedures, which were grossly subverted by people who were charged with taking care of the very processes.

“Information before us shows that Deloitte engaged in activities that were unfair, inequitable, nontransparent and uncompetitive using off-therecord briefings with Eskom officials to submit proposals, and were granted contracts even though their pricing was way above their competitors and getting the scope of these contracts modified to just under the ceiling price which requires the approval of the provincial treasury as stated in Eskom’s costcontainment procedures.”

Mabuza said the evidence of malfeasance is overwhelming and that Deloitte submitted tenders before the tender process was opened and was granted the contracts despite its price being five time times higher.

While several other firms have been implicated in state capture — KPMG, Hogan Lovells and Bain — this is the first time that Deloitte’s name has been dragged into the scandal.