Corruption tender enabler in R2bn hot soup
Kodwa’s friend in court legal tangle
Deputy Minister of State Security Zizi Kodwa’s R1-million “lender” has been ordered by his former employers to pay a total of over R2-billion for destroying their company when he paid corrupt individuals bribes to secure lucrative tenders.
EOH and EOH Mothombo have filed papers in the Joburg High Court in which they are demanding that their former executive, Jehan Mackay, who is the estranged husband of social media influencer Sarah Langa, pay them the staggering amount.
In 2015, Mackay gave Kodwa, who was then the ANC spokesperson, R1-million, from which he used R890 000 to purchase a Jeep vehicle.
Testifying before the Zondo Commission of Inquiry into State Capture, Kodwa confirmed he received the money, but described it as a loan from a friend because he (Kodwa) was struggling financially and would not have secured a bank loan.
Though Mackay sent Kodwa a draft loan agreement from his EOH subsidiary, Tactical Software Solutions (TSS), Kodwa said they did not sign an official agreement nor discussed whether interest would be added to the repayments.
He has not repaid the loan and said Mackay understood he would repay it when he found secure employment.
Kodwa claimed that his position as deputy minister, with a salary of almost R2-million a year, was not guaranteed as he could be removed at any time.
In court papers that Sunday World has seen, the companies said the billions stem from over R133-million Mackay blew in corrupt payments, or bribing individuals to secure tenders and a R5-million fine imposed by the JSE for breaching listing requirements.
They also demand R1-billion in respect of the damage caused to their brand and reputation,
R300-million for loss of profit, R47-million spent on investigations to identify his wrongdoing and R22-million paid to him in salaries and bonuses.
Also included in their demands was R4.7-million it spent in the course of engaging with JSE and law-enforcement agencies.
The companies said Mackay blew the companies’ funds on corrupt payment to individuals to secure tenders.
This was done, they said, in the form of bribes disguised as incentives, donations and entertainment.
He allegedly conspired with corrupt individuals in tender fixing and drafting tender specifications, and unlawfully obtained confidential tender information to assist in the tender process and also used middlemen to unlawfully influence the tender process, also obtaining payment in circumstances in which the commensurate services had not been rendered, and also obtained false quotes from original equipment manufacturers to influence a tender outcome.
This resulted in the company’s books being in a shambles and in breach of Jse-listing requirements, prompting the JSE to impose a public censure and a minimum fine of R7.5-million of which R2.5-million was conditionally suspended.
They said as a consequence of his unlawful conduct, Mackay was liable for the payment of the R5-million.
They said the EOH Consulting, a subsidiary of EOH group, expended R47.4 million to investigate Mackay’s financial conduct and R4.7-million of which was spent on interacting and engaging with the JSE, the Financial Sector Conduct Authority, National Treasury and the Special Investigative Unit.
They said EOH Mothombo lost R100-million after several customers cancelled their contracts as a result of negative publicity it attracted because of Mackay’s conduct.
The companies said it also wants R200-million in the form of future profit because of losing customers whom it would have transacted with in future.
It also lost an additional R500 000 in the form of loss of brand loyalty and brand trust and another half a million in the form loss of reputation.
Mackay was earning R2.7-million a year, plus bonuses and share options when he was their employee between January 2015 and March 2018.
They said he should repay these amounts because he breached his contract of employment when he made false representation, which resulted in the payment of these salaries and remunerations.