Eskom going after whistleblowers who exposed R250 million security contract

Eskom wants to expose the whistleblowers who revealed information about the alleged R500 million security contract awarded to Fidelity Services Group under the power utility’s now-suspended head of security, Karen Pillay.

City Press reports that Eskom contracted a forensic audit firm to investigate allegations against Pillay. According to Fidelity, the contract amounted to R250 million — not R500 million.

“The investigation is highly confidential, sensitive and urgent and the acting senior manager of forensics will provide its detailed scope to the supplier,” City Press quoted the text scope of audit as saying.

The firm will also “perform any other investigative activity deemed necessary to establish the facts” and provide post-investigation support, including:

  • Referring its findings to law enforcement agencies like the South African Police Service;
  • Assisting managers in drafting disciplinary hearing charges; and,
  • Providing testimony in disciplinary and related proceedings.

City Press cited Eskom insiders as saying they believe the investigation is a distraction tactic by implicated executives to deflect attention from the Special Investigating Unit’s probe into allegations against them.

One source reportedly said anyone who’s ever spoken to a newspaper is a target of the investigation.

Karen Pillay, acting head of security at Eskom

Eskom placed Pillay on precautionary suspension on 22 June 2023, attributing the decision to needing to allow space for the investigation into allegations levelled against her.

“Eskom confirms that advocate Karen Pillay is placed on a precautionary suspension to allow space for the investigation on allegations levelled against her to continue unhindered,” it said.

However, the power utility didn’t specify which allegations were being probed and said it wouldn’t provide further information until the matter was resolved.

The allegations against Pillay surround her alleged involvement in channelling the security contract to Fidelity.

NSA Global alleges that Pillay approached them to develop an emergency security contract, which she then awarded to Fidelity.

The three-month contract with Fidelity totalled R500 million, while it would only cost R30 million through NSA Global.

Eskom and NSA Global officials confirmed the exchange of emails between them, in which NSA Global said it had been “blindsided” by Pillay’s decision to give the contract to Fidelity.

“Hours were spent doing so. Our company’s intellectual property was [then] taken and given to Fidelity,” an NSA Global reportedly told City Press.

Wahl Bartmann, Fidelity Services Group CEO

They added that Eskom told NSA Global the agreement with Fidelity was established outside Pillay’s authority.

Reports of the controversial R500 million Fidelity contract first surfaced in May 2023.

According to the initial report, the scope of the work included providing security and collecting intelligence on Eskom infrastructure across the country.

However, Fidelity disputes that intelligence gathering was part of the contract — distancing itself from former Eskom CEO André de Ruyter’s private intelligence gathering operation with George Fivaz Forensic and Risk funded by Business Leadership South Africa.

Fidelity has not denied that it supplied Eskom with 400 armed guards and confirmed that aerial surveillance, response services and support, and armoured surveillance and response vehicles were part of the package.

According to Pillay, Eskom paid Fidelity for its services without the knowledge of state security entities, as it did not trust the country’s law enforcement agencies.

In June 2023, Fidelity Services Group CEO Wahl Bartmann confirmed that the company was awarded a three-month emergency contract with Eskom.

Bartmann said its contract with Eskom comprised a national deployment to cover its generation and transmission assets.

“During this period, Fidelity Services Group, together with other service providers, were already supplying other services to Eskom, in support of their National Wage dispute,” Bartmann added.

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Eskom going after whistleblowers who exposed R250 million security contract