EOH scandal – Corruption, BEE fronting, and tender rigging allegations

EOH is facing further allegations of questionable conduct, this time about BEE fronting and tender rigging relating to a R1.2-billion IT tender from the City of Joburg.

The City Press reported that a politically-connected middleman claims to have influenced the tender in favour of EOH Mthombo.

He claims he was promised 25% of the work if he made sure the tender went EOH Mthombo’s way, but was then cut out of the deal after the company won the contract.

Citing court papers filed by the politically-connected middleman, the report said he used his connections to ensure EOH Mthombo won the tender ahead of companies like Gijima and Accenture.

When the middleman threatened to expose EOH Mthombo they allegedly agreed to give him a share of the work, but only 2.5% instead of the 25% he was promised.

In a separate case, Gijima asked the High Court in Johannesburg to set aside the contract between the City of Joburg as it was allegedly awarded irregularly.

EOH said it has asked ENSafrica, a law firm which is already investigating corruption at the company, to include the latest allegations.

Corruption at EOH

Earlier this month, EOH released the results of an investigation by ENSafrica into corruption at the company which found “evidence of serious governance failings and wrongdoing”.

The probe was requested by EOH CEO Stephen van Coller earlier this year, following reports of irregularities in the supply of Microsoft software to the South African government.

ENSafrica discovered evidence of tender irregularities, EOH employees conspiring with preferred suppliers to inflate software licence sales, and inappropriate sponsorships and donations.

Payments of R1.2 billion to 78 supplier entities are being investigated by the company to determine whether appropriate work was done for services rendered.

EOH said it has terminated the employment of individuals directly involved in irregular activities.

The company added that it has reported the implicated parties to the Hawks and instructed ENSafrica to initiate criminal charges against the perpetrators to recover losses.

Now read: Major corruption unearthed at EOH

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EOH scandal – Corruption, BEE fronting, and tender rigging allegations