Share

STATE CAPTURE: 4 companies that owe SA millions

On Sunday evening global consultancy Bain & Company unexpectedly announced it was setting aside the R164 million it earned for restricting the operational model of the SA Revenue Service (SARS) as it did not deliver “sustainable, positive” results.  

This followed two days of testimony from partner Vittorio Massone at the Nugent commission of Inquiry, who has since stepped down from his role as managing partner and will now focus on cooperating with the commission.

Bain & Company is not the only firm that has set aside, paid back or been ordered to return money received from state-owned entities as SA investigates the extent of state capture. 

1. KPMG – R23m payment confirmed in February 2018

KPMG was paid R23m by the SA Revenue Service for its work on the controversial ‘rogue unit’ report which alleged former Finance Minister Pravin Gordhan ought to have known about the unit.

But in 2017, after an internal investigation, KPMG said the conclusions, recommendations and legal opinions of the report could no longer be relied upon.

Critics say that the report has been instrumental in destabilising SARS.

KPMG offered to pay back the R23m or make an equal donation to charity – and confirmed in February that the monies had been paid back to SARS.

Additionally KPMG said it would donate R40m towards education and anti-corruption for non-profit organisations. The R40m is the total fees KPMG earned from Gupta-related entities for services it provided since 2002.

2. McKinsey – approximately R1bn paid in July 2018

Global consultancy McKinsey paid back R902m to Eskom for its work on the power utility's 2016 Turnaround programme.

This after the tender processes followed were irregular – rendering the contract invalid – as determined by the National Prosecuting Authority in January 2018. The parties eventually reached a settlement and on July 9 Eskom confirmed the money had been repaid. 

3. Trillian – R600m still owed to Eskom

Gupta-linked company Trillian owes Eskom R600m. Trillian was McKinsey’s empowerment partner in the Eskom contract, which the NPA had found to be invalid. As a result, the payment Eskom made to the company is illegal

Unlike McKinsey, Trillian has not paid the money back and Eskom is following a legal process to recover it. 

“In December we will be going to court to face-up with Trillian to demand our R600m back,” Eskom CEO Phakamani Hadebe told Parliament in August.

4. Bain – R164m

Bain issued a statement on Sunday September 9, 2018 indicating that an independent investigation it commissioned last week found that the work done on a operational restructuring plan at SARS did not deliver “sustainable, positive” results.

As a result Bain said it will set aside the R164m it earned, including interest. It said these funds would be used as the Nugent Commission of Inquiry - which is investigating SARS - prescribes, or in the absence of recommendations the global consultancy will seek guidance from civil society, government, and business leaders on how it can be used for the benefit of SA.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.04
-0.7%
Rand - Pound
24.02
-0.5%
Rand - Euro
20.53
-0.3%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.7%
Platinum
900.15
+0.4%
Palladium
1,000.00
-0.2%
Gold
2,212.54
+0.8%
Silver
24.59
-0.2%
Brent Crude
86.09
-0.2%
Top 40
68,094
+0.6%
All Share
74,290
+0.5%
Resource 10
56,964
+2.3%
Industrial 25
103,585
+0.3%
Financial 15
16,463
-0.4%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders