Deloitte pays back Eskom R150m of consulting fee
Eskom said on Friday it had reached an out of court settlement with Deloitte that would see the international consulting firm repay R150m of the original fees of R207m it collected from the power utility, according to a report on the IoL site.
‘The settlement amount was determined after extensive negotiation between the parties to avoid protracted and costly litigation,’ Eskom said in a statement.
The agreement is final and brings to an end five months of legal wrangling over Eskom's demand for a refund of the money, paid out to Deloitte from 2016 to 2017. Eskom has maintained that Deloitte notched up the fees following an irregular procurement process, with former chairperson Jabu Mabuza describing the fees charged as five times higher than those of competing consulting firms.
The agreement reached on Friday states that there were technical irregularities in the procurement process but adds that investigations showed Deloitte was not involved in state capture or other forms of corruption.
Furthermore, the power utility accepts that it received value from the money it paid for the consulting work and still continues to benefit from it.
‘There were technical irregularities within the procurement process, and Deloitte Consulting accepts that it participated in this irregular procurement process,’ the statement read.
The settlement follows a two-part exposé by amaBhungane, according to a report on the Daily Maverick site. The dirt on Deloitte’s consulting deals at Eskom, part 1 showed how procurement processes were manipulated to award Deloitte contracts valued at R207m, while part 2 raised uncomfortable questions about the firm’s decision to partner with Nkonki Inc, the auditing firm covertly acquired by the Guptas’ business partner Salim Essa.
AmaBhungane says that when it interviewed Deloitte in December, Deloitte Consulting MD for Africa Thiru Pillay insisted that the firm would not settle.
‘One of the toughest decisions that I think the firm has made is to go down this route of legally challenging Eskom and not settling,’ Pillay said at the time.
He also noted negotiations had reached a stalemate over two issues: Deloitte would not agree that it was ‘complicit with irregular procurement’ or that there ‘any undertone of corruption in (its) relationship with Eskom’.
In the joint statement, Deloitte admitted that it ‘participated in this irregular procurement process’ but in exchange, notes amaBhungane, appears to have won a far more valuable concession from Eskom – that Eskom’s investigations ‘showed no evidence of state capture or corruption’.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
