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Eskom in court bid to recover R1.3bn from McKinsey and Trillian

Apr 13 2018 14:30
Khulekani Magubane and Jan Cronje

Cape Town – Eskom has confirmed that it has approached the court in a bid to recover funds from global consultancy McKinsey, and is looking into ways of recovering money from Gupta-linked company Trillian.

The power utility is trying to get R1.3bn from the two companies in total.

The state-owned enterprise wants to recover the funds which were paid out for consultancy work after they were found to be irregular. According to an Eskom spokesperson, Trillian maintains it supplied services to Eskom and honoured its obligations, and does not see the need to repay the power utility.

Eskom spokesperson Khulu Phasiwe told Fin24 on Friday that the court application to recover the funds from McKinsey was made recently. He said Eskom is eager to see the courts make a determination on the matter soon.

“We have approached the court in the last two weeks. Very soon we will hear from the courts when that will be heard, but we hope it will take place very soon.

"McKinsey has already indicated that they can pay back, but they are waiting (for) a court order directing them to do so,” Phasiwe said.

Phasiwe said Trillian differed with Eskom’s view on the obligation to repay the utility. He said what the court determines on Eskom’s latest application will give the power utility an indication of how to address its differences with Trillian.

“People contesting the repayment issue is Trillian and they feel that they did the work and there is no need to get the money back from them, as far as they are concerned.

"Let’s just say what the courts say will determine how we deal with the issue as far as it affects Trillian,” said Phasiwe.

He said Eskom also applied to participate in the preservation order processes currently affecting both McKinsey and Trillian. He said R1.3bn paid to the companies (R600m of which went to Trillian) must be returned to Eskom as it was paid unlawfully.

“We have also asked to submit an application asking for the AFU (Asset Forfeiture Unit) to allow us to claim back our money before these Trillian assets are forfeited.

"We want to make sure (that) whatever happens does not have a negative impact on Eskom. We have attached this matter to the courts,” he said.

A McKinsey spokesperson said the company welcomes this move by Eskom’s new leadership.

In January it told Fin24 that it had already been prepared to pay back the funds, but had not at the time received feedback from the power utility.  

“Eskom’s new leadership has now applied to the court to have the fee we earned on the turnaround programme returned to them. We welcome Eskom’s action," it said in a statement on Friday. 

"We have, since October last year, been seeking a transparent legal process through which to return the fee. With Eskom joining the legal proceedings, we are a step closer.

"We hope that together with the Asset Forfeiture Unit and Eskom, we can work to resolve the legal process necessary to reach a speedy conclusion to this matter," the spokesperson said.

The spokesperson said McKinsey is under the impression that the AFU’s preservation order is still in operation. She said the company would respect the court’s decision on the matter, and hopes for a prompt conclusion to the issue.



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