About 50 “enterprise development” business partners and intermediaries have approached the courts to challenge troubled tech group EOH for blacklisting them over suspect payments.
In July 2019, EOH reported that suspicious transaction to the value of R1,2 billion had been identified.
The ENSafrica team, which was appointed by EOH, has made significant progress on the investigation, said the JSE-listed company on Tuesday.
“They have completed almost 80% of their investigation into the R1,2 billion identified suspect payments. This amount has since been modified to R935 million and includes transactions with no evidence of valid contracts being in a place or where no work was done, valued at R665 million; R90 million of loans written off and overbilling valued at approximately R180 million,” EOH informed investors today.
“The ENSafrica investigation team have also been able to confirm the key modus operandi that was utilised by the main perpetrators to commit wrongdoing at EOH which involved enterprise development (ED) partners and intermediaries.”
EOH said it has suspended payments to and blacklisted 50 ED business partners implicated in suspect payments.
“Some of these ED partners have initiated legal challenges against the company, however,” the company said.
“EOH is committed to ensuring that all perpetrators of wrongdoing are held accountable for their actions. EOH is accordingly robustly opposing legal challenges brought by such parties.”
The JSE-listed firm added that further investigation has confirmed that the main perpetrators of wrongdoing remain confined primarily to a small group of individuals in the public sector team.
Apart from this type of wrongdoing, the investigation has also identified various opportunistic incidents of fraud and theft to the prejudice of EOH. This has resulted in the company initiating disciplinary measures which has led to the termination of employment relationships with a number of individuals.
Based on further information identified from ongoing whistle-blower reports and the ongoing investigation, the ENSafrica team have assisted EOH in making further reports to the authorities in line with our statutory reporting obligations.
“We have provided extensive information to the Hawks and the FIC and we are supporting and cooperating with the authorities. It is important to emphasise that EOH is actively pursuing criminal charges as a complainant against various individuals implicated in wrongdoing,” EOH informed investors.
“The investigation team is working closely with the authorities to ensure that they are able to identify illicit money flows. EOH has initiated legal processes to recover losses caused by the perpetrators of wrongdoing.”
Stephen van Coller, CEO of EOH, said the past 12 months have been very difficult for EOH.
“We have spent extensive time focusing on cleaning up the business both from a governance and financial perspective as well as understanding the Group’s strategic capabilities,” he said.
“I have been impressed by the spirit of my colleagues who have worked tirelessly during this challenging period. While there is much still to do, the path is much clearer.
“In the short-term, we will focus on continuing to deleverage our balance sheet while implementing governance changes and over the longer term we remain steadfast in a vision of a more synergised and focused offering that is well-positioned to take advantage of the next wave of change in the ICT industry.”