Real reason EOH sued former executives for R6.4 billion

EOH CEO Stephan van Coller said they had to take legal action against former executives, including founder and ex-CEO Asher Bohbot, to avoid being blacklisted.

Last month, EOH filed civil claims of R6.4 billion against Bohbot, former CFO John King, former EOH Mthombo executive Jehan Mackay, and former EOH International CEO Ebrahim Laher.

These civil claims relate to damage inflicted on EOH because they failed to deal with corruption at the company.

Van Coller said instituting criminal and civil proceedings against the previous EOH management formed part of its remedial actions to avoid being placed on the National Treasury’s restricted suppliers list.

The potential blacklisting is based on a Nexia SAB&T forensic audit report which was presented to parliament on the Department of Home Affairs (DHA) Automated Biometric Identification System (ABIS) project.

The report identified brazen corruption where EOH and SITA executives colluded to manipulate the government’s procurement system to ensure EOH wins the R409 million tender.

There were clear irregularities with the tender process, and the Auditor-General of South Africa (AGSA) subsequently deemed the contract irregular.

Based on this report, the State Information Technology Agency (SITA) informed EOH that it is considering restricting the company from doing business with the public sector.

Van Coller said while it is possible that EOH will be blacklisted from doing business with the government, it is unlikely considering the action they have taken.

He said EOH decided in February 2019 to act against corruption to save the company, and by March 2019 they went to SITA and “gave them all the information”.

“We also went to National Treasury, Business Leadership South Africa, and we went to our customers. We were advised on what to do and we followed all necessary steps,” he said.

These steps included instituting criminal and civil proceedings against the previous EOH management and alleged perpetrators of wrongdoings.

“Actually, that was the last step we were told we had to do to ensure we did not get blacklisted,” he said.

EOH CEO Stephan van Coller interview

Now read: We should not be blacklisted for corruption — EOH

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Real reason EOH sued former executives for R6.4 billion