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McKinsey denies involvement in corrupt efforts to milk Eskom of millions

17 January 2018 - 14:55 By Linda Ensor
Eskom has demanded that Trillian and McKinsey pay back the R1.6bn they received from an unlawful consultancy contract by Tuesday and warned of possible charges. File photo.
Eskom has demanded that Trillian and McKinsey pay back the R1.6bn they received from an unlawful consultancy contract by Tuesday and warned of possible charges. File photo.
Image: Reuters

Global consultancy firm McKinsey has strongly denied allegations that it was involved in corrupt efforts to milk Eskom of hundreds of millions of rand.

In a statement on Wednesday‚ McKinsey director of external relations for Africa Bonita Dordel insisted that McKinsey had not authorised any payments made by Eskom to Gupta-linked Trillian Capital Partners and that any payments Eskom made to Trillian were made after Eskom was informed by McKinsey that Trillian had failed its due diligence test.

"Eskom's internal investigation confirmed that we did not authorise any payments by Eskom to Trillian‚" Dordel said.

Both McKinsey and Trillian are the subject of an order for the preservation of R1.6bn in assets obtained from the Pretoria High Court by the Asset Forfeiture Unit of the National Prosecuting Authority.

McKinsey said on Wednesday that it has not yet been formally provided with any affidavit or order from any authority.

"Eskom's counsel informed us in October 2017 that Eskom executives had acted unlawfully by failing to secure the appropriate approvals for the turnaround programme contract (with McKinsey). We have no interest in being party to a contract entered into unlawfully by Eskom‚ and have written to them five times asking them to initiate the necessary proceedings before the court. Even if Eskom chooses not to act to set aside the contract‚ we remain committed to returning the fees McKinsey earned in connection with the turnaround programme to South Africa‚" Dordel said.

"No new information has emerged from the public reports that changes our understanding of the facts. When this issue first arose‚ we launched a comprehensive investigation. We stand by our statement of 17 October 2017‚ in which we categorically rejected the notion that our firm was involved in any acts of bribery or corruption related to our work at Eskom and our interaction with Regiments or Trillian."

McKinsey said its investigation had concluded that the firm had never served the Gupta family nor any companies publicly linked to the Gupta family; had never made payments directly or indirectly to secure contracts‚ nor had it aided others in doing so; did not introduce Trillian to Eskom nor vice versa; had not made payments to Trillian; never had a contract with Trillian‚ although it worked alongside them for a few months at Eskom; had not authorised Eskom to pay Trillian as alleged as the conditions set out in a letter to Eskom had not been met.

Dordel emphasised that Trillian failed McKinsey's due diligence and so it terminated discussions with the company about a supplier development partnership in March 2016.

"We believe that Trillian withheld information from us about its connections to a Gupta family associate. We informed Eskom of this decision by letter on March 30‚ having previously flagged our concerns to Eskom about Trillian’s continued failure to disclose its beneficial ownership‚" Dordel said.

- BusinessLIVE