EOH blacklists ‘enterprise development’ partners

EOH said yesterday it has blacklisted 50 “enterprise development” partners and intermediaries and reported suspected criminal behaviour to the authorities for investigation and possible prosecution as the JSE-listed technology group continues a clean-up of its operations.

Alongside its annual results to July 2019, published yesterday before markets opened in Johannesburg, EOH said law firm ENSafrica has made “significant progress” investigating corruption in the group’s public sector business. ENSafrica was appointed to probe the malfeasance following Microsoft’s decision earlier this year to terminate its relationship with EOH after a whistleblower lodged a complaint with the US Securities and Exchange Commission over a dodgy tender involving a software licensing agreement with the South African department of defence.

EOH CEO Stephen van Coller contracted the law firm to do a wide-ranging investigation, especially into the group’s government contracts, to determine the scale of the problem.

The group said ENSafrica had completed about 80% of its investigation into R1.2 billion of identified “suspect payments”.

This amount, it said, has since been modified to R935 million and included transactions with no evidence of valid contracts being in place or where no work was done (valued at R665 million) as well as R90 million of loans written off and overbilling valued at about R180 million.

“The ENSafrica investigation team has also been able to confirm the key modus operandi utilised by the main perpetrators to commit wrongdoing at EOH, which involved enterprise development partners and intermediaries,” it said.

“EOH has suspended payments to and blacklisted 50 enterprise development business partners implicated in suspect payments. Some of these partners have initiated legal challenges against the company.

“EOH is robustly opposing legal challenges brought by such parties.”

It said the ENSafrica probe found the main perpetrators of wrongdoing were primarily a small group of individuals in the public sector team. “We have provided extensive information to the Hawks and the Financial Intelligence Centre,” it added.

This article was first published on TechCentral and is republished with permission