A new forensic treasury report shows how controversial former Transnet and Eskom chief financial officer Anoj Singh enjoyed overseas trips at the expense of international consulting firm McKinsey, which scored multi-billion rand contracts at the state owned entities.
Singh, who publicly lied to Parliament last year about McKinsey and Gupta-linked company Trillian not being paid by Eskom, enjoyed fully paid trips to Dubai, Russia, London and Germany.
The report seen by the Mail & Guardian, follows last year’s national treasury report which called for a forensic investigation into Singh, former Eskom chief executive officer Brian Molefe and other executives’ involvement in dubious contracts which were awarded to Gupta-linked companies.
The Fundudzi report reiterates treasury’s recommendations that Singh’s conduct with regards to McKinsey should be referred to the elite crime-fighting unit, the Hawks, for investigations under the Prevention and Combating of Corrupt Activities Act (Precca).
Under Precca, Singh would be investigated for allegations of corruption as the overseas trips alone constitute a form of gratification, which is illegal.
According to the report Singh, who has played a key role in the awarding of dubious multi-million rand contracts to McKinsey and Trillian, appears not to have declared the all expenses paid overseas trips.
The report states that the trips, which were arranged by McKinsey, followed two months after the consulting firm was appointed through a confinement to assist “Transnet in developing a credible execution plan that minimises the execution risk of market demand strategy”. A confinement is a closed tender process. This was after the value of the contract awarded to McKinsey was increased from R25-million to R49-million.
“The invitation extended to Singh was for him to attend the CFO conference in London.…It should be noted that the requested increase was done two months after the commencement of the project. The project commenced in December 2011 and the increase is requested in February 2012,” says the report.
It was further discovered that after Singh returned from the June 2012 trips McKinsey was once more appointed through a confinement as an advisor in a controversial but lucrative R54-billion locomotive contract, which was later revealed to have been tailored for the Gupta family.
“We determined that a month after Singh came back from the McKinsey sponsored London trip, that there was a further procurement process to appoint McKinsey to provide advisory services to Transnet for the procurement of the 1064 locomotives,” says the report.
When contacted for comment Singh declined and said that he was never consulted during the investigation. “I have not seen the report so I have no comment,” said Singh.
Following this work McKinsey secured more work at Transnet during Singh’s time including in a partnership with Regiments Capital, a company which had Gupta associate Eric Wood as founding partner.
This relationship saw the McKinsey/Regiments partnership extract fees in excess of R3-billion — including five contracts worth R1-billion done without following tender processes — from Transnet.
The report also reveals Singh and disgraced former McKinsey executive Vikas Sagar in e-mail discussions for the international consultancy to earn hundreds of millions from Transnet’s locomotive procurement plans. This discussion follows similar discussions held for Eskom work to be funnelled to McKinsey and Gupta-linked Trillian Capital with Wood.
When Singh moved to Eskom, McKinsey was again awarded a lucrative R1-billion contract together with Trillian which was paid R600-million. The contracts were found to have been illegally awarded to the two companies and McKinsey, after law enforcement agencies got involved, has since paid back the money.
The report further states that Singh, as part of the investigation was sent detailed questions and asked to explain apparent instances where he had misled parliament.
Singh is also facing a professional enquiry into his conduct by the South African Institute of Chartered Accountants.