In the public mind, Eskom’s case against Trillian is about the consulting company’s Gupta links. But whether or not the links can be established, the lynchpin of the power utility’s high court application is the apparent absence of any contract justifying the millions it paid directly to Trillian.
Eskom’s battle to claw back the almost R600-million it paid to Trillian, established by Eric Wood and Gupta lieutenant Salim Essa, was heard by a full Bench of the high court in Pretoria this week. The three judges presiding were Selby Baqwa, Moroa Tsoka and Dawie Fourie.
Eskom is seeking to reverse the decisions by former board members and executives, including Anoj Singh and Matshela Koko, that resulted in R1.6-billion in allegedly unlawful payments being made to Trillian and consultancy giant McKinsey.
The court case, launched in March last year, forms part of Eskom’s plan to undo the damage caused by alleged malfeasance at the power utility. Eskom’s new board, appointed in January 2018, has embarked on a number of investigations in a bid to root out corruption.
Eskom submitted documents to court — including internal emails, investigation reports and affidavits from Eskom executives and Trillian whistle-blowers — as evidence that corruption played a part in the money being paid to Trillian.
On Monday, counsel for Eskom, Tembeka Ngcukaitobi, started by following the money. The question: How did Eskom make five payments, amounting to almost R600-million, directly to Trillian without any contract existing between them?
Eskom’s first payment to Trillian was in April 2016 and the last invoice was submitted to Eskom by Trillian in February 2017. Trillian maintains it had been subcontracted by McKinsey to provide a portion of the consulting services offered by the much bigger firm.
Ngcukaitobi told the court on Monday that a draft subcontracting agreement did exist between McKinsey and Trillian, but it was never signed.
McKinsey told Trillian on March 15 2016 that it was unable to conclude an agreement with it on the grounds of reputational risk, Ngcukaitobi explained. At the time, media reports emerged detailing alleged Gupta ally Mohamed Bobat’s links to Trillian.
All five payments were made to Trillian after the subcontracting relationship with McKinsey had been terminated, Ngcukaitobi said. “On the facts here … everybody knew that there was no reason for Trillian to be hanging around,” he added.
Tsoka questioned the legality of the payments.
“The idea that there was somehow a legal basis for the payments to be made is completely destroyed by the facts of this case,” Ngcukaitobi contended. He further explained that, as an organ of the state, Eskom is strictly regulated by the Public Finance Management Act, which requires a contract to exist between a public entity and a supplier.
On Tuesday, Trillian’s counsel, Mike Hellens SC, attempted to cast doubt on the absence of an agreement between Eskom and Trillian. He pointed to the “ample contemporaneous correspondence that places Trillian at the heart of the implementation of the contracts in question”.
Trillian is opposing Eskom’s application on the basis that it contains a number of disputed facts. Because factual disputes cannot be resolved on paper, Eskom’s application should be dismissed or referred to trial, Hellens argued.
The correspondence Hellens referred to included the minutes from two joint steering committee meetings, one on March 31 2016 and the other on August 4 2016. The meetings were attended by Eskom officials, McKinsey partners Vikas Sagar and Alexander Weiss and former Trillian chief operating officer Ben Burnand.
The steering committees were set up to implement the projects set out in Eskom’s agreement with McKinsey. Hellens pointed out that both meetings happened despite McKinsey having already allegedly cut ties with Trillian on March 15 2016.
Hellens also raised disputes of facts relating to the allegations of corruption in Eskom’s papers.
On Monday, Ngcukaitobi argued that evidence exists of a corrupt relationship between Trillian executives and the power utility’s senior officials, including Singh and Koko. In a written argument, Ngcukaitobi outlined how Singh and Koko had allegedly received favours — including trips to Dubai and hotel stays — through Essa’s ties to the Guptas.
This relationship meant that these officials were biased in favour of Trillian, Ngcukaitobi contended.
Hellens took issue with Eskom’s failure to include Koko and Singh’s versions of the allegations. Eskom did not try to get affidavits from Koko and Singh, “they simply … lay blame at their door,” he said.
Eskom leaves “an impression that, if they put all the pieces of the jigsaw puzzle down, it would paint a picture of the story they want”, Hellens said. He added that, if new evidence from Koko and Singh is included in the matter, it would “scream a different picture”.
Hellens further argued that Trillian’s association with the controversial Gupta family does not automatically render its relationship with former Eskom officials corrupt. “The phrase ‘Gupta-linked’ has no content in law,” he said.
But the matter ultimately circled back to the question of the contract.
Alfred Cockrell SC for McKinsey supported Eskom’s contention that there was no contractual basis for the payments it made to Trillian.
He said the subcontracting issue is central to the matter.
In his closing arguments, Ngcukaitobi warned against Trillian’s plea to refer the case to trial: “The court must always be aware that there is a temptation among parties to use this idea of a referral to trial purely as a delay tactic.”
A familiar face graces court
One well-known face at the court battle between Eskom and consulting firm Trillian this week was the power utility’s erstwhile chief executive, Matshela Koko.
On Monday, he appeared in courtroom 2D after giving his support to a separate case — running in court 8G — to interdict Eskom from signing purchase agreements with independent power producers.
Koko’s name had already been raised a number of times in the Trillian matter.
Eskom’s counsel, Tembeka Ngcukaitobi, raised Koko’s alleged ties to Trillian executive and Gupta associate Salim Essa as a reason the power utility seemingly favoured the consulting firm by paying it R600-million directly without a contract.
On Tuesday, Trillian’s counsel, Mike Hellens SC, argued that those Eskom has implicated in corruption should have their versions heard by the court.
Koko told the Mail & Guardian on Tuesday that he was fed up with people speaking on his behalf.
“I was here yesterday. I am here this morning and I have heard a lot of things that have been said about me: what I did and what I did not do … And I think it’s wrong. I am here. I am not dead and I can speak for myself,” he said.
Koko referred to Eskom’s claim that he is linked to Essa, an allegation he says relies on an email between a travel agent and the controversial [email protected] email address that was forwarded to him.
“Then they say the infoportal address belongs to Mr Essa. They don’t say how they got to the conclusion that infoportal belongs to Salim Essa,” Koko said.
Koko maintains that the email address was given to him by former Eskom legal head Suzanne Daniels on the basis that he had to use it to provide information on Eskom’s operations to then board chairperson Ben Ngubane. — Sarah Smit