By Robert Laing for Business Day
Techology group EOH issued a Sens announcement on Wednesday objecting to a statement that Eskom issued on Tuesday, which sent its share crashing as much as 16% to an intra-day low of R26.35.
EOH was listed twice in 14 reportable irregularities flagged in Eskom’s interim results for the six months to end-September, a Sens statement the state-owned enterprise (SOE) issued showed.
The list included that there were allegations that Eskom’s former chief procurement officer, Jay Pillay, and other senior officials in procurement were involved in acts of misconduct involving EOH.
The second mention of EOH regarded the resignation of George Sebulela in October 2018.
“A member of the board and audit and risk committee, Sebulela did not declare a conflict of interest and did not recuse himself on deliberations involving the supplier (EOH),” Eskom’s statement said.
“EOH is currently engaged with the JSE and Eskom on Eskom’s Sens disclosure,” the technology group said in Wednesday’s statement. “The two allegations mentioned in the announcement are matters that have been fully investigated and the matters concluded last year. EOH was found not to be implicated in either allegation.”
Other suppliers mentioned in Eskom’s list of reportable irregularities who gained contracts without following correct procedures included Bizz Tracers, Huarong Asset Financing, Cliffe Dekker Hofmeyr, McKinsey and Trillian.
Former Absa and MTN executive Stephen van Coller recently issued a statement following his first 100 days as EOH’s CEO in which he said “specific legacy issues have affected the company’s value”.
Van Coller announced a new structure, which among other things, will improve the group’s accountability.
Former EOH CEO Asher Bohbot has returned to the business he founded. He has taken up a full-time role focusing on strategy and stakeholder management, the listed technology group said in a statement on Wednesday.
Bohbot returns to EOH at a difficult time for the group, after its share price was pummelled following the forced sale of shares by two of its directors and investigations around possible corrupt dealings involving one of its now former subsidiary companies.
“The intention was always that Asher would return at the end of his six-month sabbatical, having stepped down in May this year,” said EOH CEO Zunaid Mayet in the statement.
EOH had previously said Bohbot would return to the group’s board as a non-executive director. An EOH spokeswoman told TechCentral that Bohbot is not returning to the board.
“Asher brings extensive experience and depth of knowledge to the business, which will be extremely valuable, so I’m most grateful that he’s agreed to join us for a period on a full-time basis,” Mayet said. His contract does not have a fixed term and is open ended, according to the spokeswoman.
The appointment is effective immediately, EOH said.
Last week, EOH shares were sold off aggressively, with the counter shedding more than 40% at one point on Friday (on top of a 35% slump on Thursday) to reach lows last seen six years ago, well below R30/share. It later bounced back. It closed on Friday at R49.01/share, still well off its recent trading range around R75-R80/share.
The slump was likely in part related to Independent Police Investigative Directorate (Ipid) raids last week to do with alleged corruption at the South African Police Service.
Analysts have also blamed contagion related to the accounting scandal by furniture retailer Steinhoff, with investors selling off equities that are perceived to have high risk.
The forced sale of shares by financial institutions against equity financed transactions to various individual shareholders, including two EOH directors — John King and Jehan Mackay — compounded the fall.
EOH said last week that it had reached agreement with the former shareholders of Grid Control Technologies, Forensic Data Analysts (FDA) and Investigative Software Solutions to unwind a 2015 deal to acquire them, with unwinding effective from 31 October 2017.
The Daily Maverick reported earlier this month that Ipid’s head of investigations told parliament’s standing committee on public accounts that there had been a “clear manipulation of the procurement system” in favour of FDA, a company led by controversial businessman Keith Keating. The Ipid official reportedly said there was a corrupt relationship between FDA and the police service.
Source: Money Web