EOH paid R865 million to subcontractors where there is no evidence that work was done and there was a lot of inappropriate gifting, sponsorships, and donations.
This was one of the pieces of information shared by EOH CEO Stephen Van Coller in his testimony at the Zondo Commission on 23 November 2020.
EOH has been struggling to rid itself of the history of widespread corruption at the company, which include kickbacks to win lucrative tenders.
Van Coller has been working hard to weed out corrupt elements at EOH and restore the company’s reputation, which includes airing the company’s dirty laundry in public.
His testimony at the Zondo Commission was once again direct and transparent, where he gave details about various corrupt deals which EOH was involved in.
These deals included two Microsoft licensing deals with the Department of Defence and one SAP licensing deal with the Department of Water Affairs.
“In both cases, there was over-invoicing and under-delivering of licenses,” Van Coller said.
In one of the Microsoft licensing deals, EOH charged for 20,000 licenses, but they only delivered 15,000. In addition, EOH charged above the normal rates.
“If the Department of Defence had gone directly via SITA to Microsoft where they have a Master’s Services Agreement, they would have got a much better rate,” he said.
The EOH CEO also discussed tender irregularities that were linked to inappropriate gifting, sponsorships, and donations.
There were instances where EOH employers wrote the content of the tender to exclude other bidders and to help it to win the tender.
“In most cases, from what I can see, we would win the tender almost at any cost. So, our costings and what we put in the tender documents did not really make a difference,” he said.
Paying for no work done
Discussing potential kickbacks and other irregular payments, Van Coller said they investigated around R1.2 billion of suspicious payments.
To date, they have uncovered around R700 million of payments where there was no work done and which were not related to any contracts.
There was also around R160 million in payments for consulting services without any clear work being produced.
“It is currently suspected that the potential irregular payments stand at approximately R865 million,” he said.
He added that some employees were simply stealing money from EOH for political donations, and in some cases, to enrich themselves.
Van Coller said their investigation uncovered both undisguised donations and disguised donations.
“The undisguised donations…the issue is the size and the fact that it is to a single political party – the ANC,” he said.
EOH’s board have instructed attorneys to issue summons to recover damages from the alleged perpetrators.
The company has also blacklisted 85 enterprise development partners following its corruption crackdown.
Stephen van Coller Affidavit
EOH CEO Stephen van Coller’s full affidavit is embedded below.