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As it happened: Khoza quashed G9 investigation of Eskom officials implicated in criminal activity

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27 Feb 2018

Khoza quashed G9 investigation of Eskom officials implicated in criminal activity

The portfolio committee on public enterprises on Tuesday heard how former acting Eskom chair Zethembe Khoza abruptly halted an investigation by forensic group  G9 into the relationship between Eskom and Trillian.

CEO of G9 Raji Murugan presented evidence. He was introduced by Advocate Dumisa Ntsebeza, who described the findings of the investigation as “numbingly shocking” and informative.

“What struck me of those investigations is how the Eskom’s leadership would abruptly terminate the mandate of the investigation at very critical moments.

“There would have been exposure of the most corrupt practices of leadership at Eskom,” he said. “That still leaves me shuddering in disbelief that such large scale corruption and plain theft could take place,” said Ntsebeza.

Murugan further detailed how G9 was making significant progress into uncovering contraventions at state power utility Eskom, within six weeks of the investigation. The information pointed to corruption, money laundering and racketeering.

Murugan said the names behind these activities can only be uncovered if the investigation is allowed to re-commence. Murugan explained how Khoza had intervened in the investigation, having removed Johnny Dladla, the interim group chief executive from managing it. 

“This is highly unusual or in fact contrary to any or all governance protocols.”

Murugan said this may indicate that Khoza himself may be implicated in the “Trillian debacle” and that he was derelict of his duties as chair of the board tender committee which approved the contract with McKinsey.

G9 was to make a presentation on August 30, 2017, to the Audit and Risk Committee with interim board members in attendance.

“In hindsight I probably should not have informed the board that they were potentially guilty of contravening their fiduciary duties and that as a forensic firm, we had no intention to leave them out of the equation,” said Murugan.

Murugan believes that G9’s mandate was later terminated because members of Eskom’s board tender committee were to be investigated.

He also spoke on how Khoza tried to bring the integrity of G9 into question, saying that the report was "not worth the paper it is written on".Murugan said Khoza also made disgusting statements.

"He would make statements like 'you know people could get killed for doing these types of investigations'.”

Khoza also suggested that G9 were "agents" planted at Eskom.“He must take full responsibility for stopping this investigation,” said Murugan.

He further unpacked the roles of former CFO Anoj Singh, and his team including Prish Govender, Charles Kalima and Edwin Mabelane in making illegal payments to Trillian. 

The correct due diligence was not followed. Documents were unsigned, and if not unsigned, some documents were not made available, which is in conflict with the Public Finance Management Act (PFMA).

He said that approvals given over email created room for corruption and illegal activity.“When entering in a contract with company which will run into billions, at the very best it must be thrash out at a physical meeting, not over the internet,” he said.

He explained that the contract with McKinsey for the corporate turnaround plan and the MSA contract could not be justified. “We are consultants, these numbers are shocking- they can never be justified in anyone’s lifetime, in any country in this world.”

“The figures are shocking for what they did.” Trillian was paid R49m irregularly and fraudulently for a piece of work to be done over two to three months.

He said that McKinsey’s role was also questionable and unethical. “McKinsey out of greed was happy with R70m and to give away the 30%.”He added that although the G9 report does not have evidence of criminality on behalf of McKinsey, the Hawks will have to uncover that.

G9 has provided an affidavit to the Hawks, on the instructions of the new interim group chief executive Phakamani Hadebe and head of forensic at Eskom to institute criminal investigations against those involved.

G9 has committed to assisting the Hawks in its investigations.

He also shared views that Singh is implicated in criminal activity.

“Mr Anoj Singh must pack his bags to go to Sun City, not the one in Rustenburg but the one in Johannesburg,” he said. 

The inquiry resumes on Wednesday. Eskom's group executive in the office of the chief executive Abram Masango will present evidence. Former SAA board chair Dudu Myeni has also been invited, it is yet to be confirmed if she will attend. 

27 Feb 2018

McKinsey-Trillian contract contravened PFMA

During his testimony, CEO of G9 Group, Rajie Murugan shared how his investigation into the relations between Eskom and Trillian revealed that the contract contravened the Public Finance Management Act (PFMA).

He shared how there were missing documents for the contract and that some documents were not signed. “This is against the PFMA and all relevant Eskom policy,” said Murugan.

When he confronted Prish Govender, part of the team which managed the contract between Eskom and McKinsey and its BEE partner Trillian, Govender said it was a procurement matter and that he should not be worried.

In turn Edwin Mabelane also said that the transaction as “above board”.

Evidence from a whistleblower indicates that she was instructed by Charles Kalima to approve the transaction, in favour of Trillian. “She complied with the request from her general manager,” said Murugan.

Audio clips played during the hearing reflect how Eskom officials approved the transaction because they did not believe they were doing anything wrong.

In another clip Murugan informs a supplier development partner that Trillian has a 0% BEE shareholding, to which he sounds surprised, calling it a “shocker”.

Murugan said this indicates the extent of the misrepresentation made by both McKinsey and Trillian. 

27 Feb 2018

Trillian’s failure to cooperate with investigations is suspicious

Trillian’s failure to substantiate the legitimacy of its business relationship with Eskom adds weight to the idea that its dealings with Eskom were suspicious or not legal, said G9 CEO Rajie Murugan.

Murugan was speaking on G9’s investigation into relations between Eskom and Trillian, the investigation was abruptly halted when it became clear to the board tender committee that they would be probed, the committee on public enterprises heard.

Murugan indicated how G9 relied on Advocate Budlender’s report into State Capture, as Trillian was not forthcoming with information.  

“His (Budlender) access to Trillian, albeit limited, provided insight to what was covered.”

Murugan had an audio clip played of an interview with Prish Govender, who was part of the team which handled the contract between Eskom and McKinsey and its BEE partner Trillian.

In the audio clip, Murugan ask Govender why McKinsey and Trillian were not called in to determine their capacity to manage the contract. To this Govender replied that the capacity of the firms was a concern and that McKinsey had made a very clear presentation of how it would jointly with Trillian. 

FULL DOCUMENT: Damning Trillian report on state capture

27 Feb 2018

Khoza interfered in G9 investigation - inquiry hears

G9 consulting was making significant progress into uncovering contraventions at state power utility Eskom, within six weeks of the investigation. The information pointed to corruption, money laundering and racketeering.

Murugan said the names behind these activities can only be uncovered if the investigation is allowed to re-commence.

Murugan explained how then-chairperson Zethembe Khoza had intervened in the investigation, having removed Johnny Dladla, the interim group chief executive from managing the investigation.

“This is highly unusual or in fact contrary to any or all governance protocols.” Murugan said this may indicate that Khoza himself may be implicated in the “Trillian debacle” and that he was derelict of his duties as chair of the board tender committee which approved the contract with McKinsey.

G9 was to make a presentation on August 30 2017, to the Audit and Risk Committee with interim board members in attendance.

“In hindsight I probably should not have informed the board that they were potentially guilty of contravening their fiduciary duties and that as a forensic firm, we had no intention to leave them out of the equation,” said Murugan.

Murugan believes that G9’s mandate was later terminated because members of Eskom’s board tender committee were to be investigated.

G9 has provided an affidavit to the Hawks, on the instructions of the new interim group chief executive Phakamani Hadebe and head of forensic at Eskom to institute criminal investigations against those involved. G9 has committed to assisting the Hawks in its investigations.

Eskom interim CEO Dladla out, Maritz in

27 Feb 2018

Forensic firm to testify about Eskom payments to Trillian

The Eskom inquiry resumes on Tuesday. A forensic company which investigated allegations of irregular payments made to Gupta-linked Trillian Capital Partners will present evidence.

The portfolio committee on public enterprises will hear evidence presented by G9 forensic group, which was commissioned by Eskom. This relates to Eskom’s contract with consultancy firms McKinsey and its partner in the contract, Trillian.

The National Prosecuting Authority (NPA) found the contract to be invalid and the payments made unlawful.

In a separate interim report, G9 Consulting Services revealed that Eskom’s own legal advisors warned the state power utility not to enter into the agreement with McKinsey because the proposed revenue model may be illegal, amaBhungane reported.

Further reports by amaBhungane revealed that G9 went so far as to recommend that a criminal investigation be launched, specifically with regard to Eskom’s relationship with Trillian.

Former CFO Anoj Singh and his senior management team including Edwin Mabelane, Prish Govender and Charles Kalim have been implicated in the G9 report. Singh’s testimony to the inquiry in January was dominated with “I don’t knows”.

Singh said all the information he presented was fact-based, supported by evidence he had. But former finance minister and member of the committee Pravin Gordhan lambasted him for not taking responsibility for what happened at Eskom.


The McKinsey Dossier, Part 4 – Bending over backwards for Trillian
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