EOH hits back after SIU media statement

EOH has clarified events that led up to the signature of the Acknowledgement of Debt (AoD) related to its Department of Defence (DoD) contract.

The Special Investigating Unit (SIU) this week provided details about its investigation into the DoD’s R250 million Microsoft software licences procurement contracts.

The SIU said it uncovered irregularities relating to the procurement process and overpricing of Microsoft Licenses amounting to more than R40 million.

The SIU added that after EOH was confronted with the overpricing of the Microsoft licenses it acknowledged wrongdoing.

EOH agreed to sign an AoD to the value of R41,676,494, which is to be paid back to the DoD over a period of three years.

What was strange about the SIU announcement is that it was nothing new. EOH actually entered into the AoD with the SIU at the end of September 2020.

EOH commenced monthly payments in terms of the AoD from 5 October 2020, and the terms of the settlement agreement were disclosed at the EOH 2020 year-end results presentation on 2 December 2020.

EOH said from inception of the ENSafrica forensics investigation in February 2019, it has transparently and proactively reported to the authorities.

They provided information to the Directorate for Priority Crime Investigations (DPCI), the FIC (Financial Intelligence Centre), the SIU and the Department of National Treasury.

They also provided assistance in the investigations related to wrongdoing by a handful of former employees of the EOH public sector team.

By 8 July 2019, the DPCI had received a section 34 report on the ENSafrica preliminary findings, and the matter had been reported to the FIC.

Prior to engaging in settlement negotiations with the SIU, on 31 May 2019, EOH also reported the wrongdoing to National Treasury.

As part of the engagement, it proposed to compensate the State for identified irregularities including the DoD and the Department of Water and Sanitation (DWS) contracts.

“When the SIU met with EOH management for the first time on 20 March 2020, the SIU requested that EOH engage with them directly regarding compensation to the DoD, as they were mandated to address the irregularities at DoD,” EOH said.

“During that meeting, EOH provided the SIU with the ENSafrica investigation information on the DoD contracts.”

EOH has therefore reported wrongdoing and initiated action to recover losses caused by the perpetrators of wrongdoing.

Now read: EOH must pay back R42 million following corrupt Microsoft deal

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EOH hits back after SIU media statement