Telling all: EOH — helmed by chief executive Stephen van Coller (above) — appeared before the Zondo commission of inquiry into state capture and provided evidence of irregular money flows at EOH, which was unearthed by law firm ENSafrica.
(Gallo Images/Papi Morake)
The Special Investigating Unit (SIU) will investigate allegations of corruption and maladministration at the department of water and sanitation to the tune of R474-million after President Cyril Ramaphosa signed Proclamation R33 of 2021 authorising the probe.
The SIU will investigate four information technology tenders awarded by the department to IT service management company EOH between 2012 and 2017 and transactions between January 2012 and July 2021 will be investigated. The multifaceted investigation will be aligned with the ongoing inquiry into state capture in South Africa.
“Transactions that either took place before January 2012 or after 30 July but [are] relevant to, or connected with, the same persons, entities or contracts being investigated will also form part of the SIU investigation,” a statement said.
“The investigation is aimed at determining whether the procurement and payments made in relation to the IT contracts were done in a manner that was fair, competitive, transparent, equitable or cost-effective or contrary to applicable legislation and guidelines issued by the national treasury,” SIU spokesperson Kaizer Kganyago said.
Following years of allegations of corruption and bribery JSE-listed EOH has since 2018 been cooperating with the SIU to help unearth alleged fraud and corruption involving former employees of its subsidiary, EOH Mthombo and third parties with department officials.
The Mail & Guardian previously reported that in 2019, Microsoft terminated its agreement with EOH after a whistleblower tipped off the US Securities and Exchange Commission about a software procurement deal between the company, the South African National Defence Force and the department of water and sanitation.
In 2020 group executive director Stephen van Coller appeared before the Zondo commission of inquiry into state capture and provided evidence of irregular money flows at EOH that had been uncovered by law firm ENSafrica.
The forensic investigation, which was commissioned by the board of the company in 2019, identified R1.2-billion in suspicious contracts. It also found severe governance failings, tender irregularities and unsubstantiated payments among other unethical business dealings.
Ramaphosa’s signing of the proclamation authorises the SIU to use its legislative powers to subpoena bank statements and cellphone records, search and seize evidence and interrogate witnesses under oath in an effort to hold those responsible for financial losses to account for their actions, according to Kganyago.
Evidence of criminal activity will be referred to the Directorate for Priority Crime Investigation (the Hawks) and the National Prosecuting Authority.