Eskom changes tune on R1bn McKinsey payment

25 January 2018 - 08:25 By Stephan Hofstatter
McKinsey has written to the cash-strapped Eskom five times since October to initiate legal proceedings to set aside its contract so that it can return the fees after it was served with a letter of demand.
McKinsey has written to the cash-strapped Eskom five times since October to initiate legal proceedings to set aside its contract so that it can return the fees after it was served with a letter of demand.
Image: Reuters

Eskom has reversed its position that its R1-bn contract with McKinsey was unlawful and has now declared the payment above board‚ even though prosecutors regard it as the proceeds of crime.

The move appears to be a desperate attempt by Eskom executives to avoid being held accountable and criminally liable for paying McKinsey and Gupta-linked Trillian R1.6-bn without a valid contract.

McKinsey has written to the cash-strapped Eskom five times since October to initiate legal proceedings to set aside its contract so that it can return the fees after it was served with a letter of demand from law firm Bowmans in October‚ but has received no response. McKinsey told Parliament it would reimburse Eskom regardless of the outcome of legal process.

The letter of demand‚ served on Trillian and McKinsey by Eskom’s head of legal Suzanne Daniels‚ said the contract was unlawful as it had not been approved by the Treasury. She was suspended two days later.

Now Eskom says the payment and the contract are above board — but it still wants the money back.

Business Day has seen e-mails outlining Eskom’s new position written earlier in January by then acting CEO Sean Maritz to McKinsey.

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