EOH’s R6.4-billion lawsuit silence

While former sports minister Zizi Kodwa and former EOH Mthombo executive Jehan Mackay appeared in court last week on corruption allegations, EOH has remained silent on the lawsuits it filed against former executives three years ago.

In 2021, EOH announced it was suing its founder and former CEO, Asher Bohbot, and three other executives for a combined R6.4 billion.

EOH had filed civil claims against Bohbot, Mackay, former CFO John King, and former EOH International CEO Ebrahim Laher.

King passed away shortly after EOH announced it was instituting legal action against the executives.

EOH was pursuing R1.66-billion claims each against Bohbot and King, a claim of R1.58 billion against Laher, and a R1.5-billion claim against Mackay.

These claims relate to damage inflicted on EOH because they failed to deal with corruption at the company.

Apart from these four, EOH was also going after other executives, a few companies, and their directors.

Former EOH CEO Stephen van Coller said the company’s board decided to pursue the perpetrators to see if they could recover any of the money.

Van Coller was appointed CEO in September 2018 and quickly began cleaning up corruption at the company.

He later admitted that he had no idea how much bribery and corruption he would face when joining the company.

Van Coller’s actions include testifying at the Zondo Commission in 2020.

He told the commission EOH paid millions to ANC politicians in donations and made irregular payments in exchange for lucrative tenders.

He revealed that EOH paid R865 million to subcontractors where there is no evidence of work done. There was also a lot of inappropriate gifting, sponsorships, and donations.

When EOH instituted legal action against its former leaders, Van Coller said the process involved an investigation, after which they asked Werksmans Attorneys for guidance.

Werksmans responded with a way forward, which EOH acted on. “It is now over to the lawyers, and they must do their job,” Van Coller said at the time.

He added that the legal action also formed part of its remedial actions to avoid being placed on the National Treasury’s restricted suppliers list.

“It is a process my management team and I had to go through as the board feels they have to follow their fiduciary duties to the shareholders,” he said.

EOH previously admitted that it would unlikely recover the money.

MyBroadband contacted EOH for comment on the lawsuit against its former executives, but the company did not respond by publication.

Criminal charges

Among the allegations the state is pursuing against Mackay and Kodwa is that the former EOH executive bribed the former minister to influence a Sita contract. Both men have denied the charges.

The charges stem from information shared at the Zondo Commission regarding corruption at EOH.

Steven Powell, MD of ENSafrica’s forensics department, said Kodwa received R2 million in payments and luxury accommodation from EOH while bidding for government tenders.

Kodwa was linked to dubious payments from former EOH Mthombo executive Jehan Mackay related to government tenders.

These payments include a R1 million “loan” that Kodwa received from Mackay, which he used to buy a Jeep. He never paid back the money.

Powell said Kodwa was also paid R45,000 by EOH a day before Mackay asked him to intervene in a Home Affairs tender from which EOH was disqualified.

It was a particularly lucrative tender, and Mackay’s communication with Kodwa following the deposit looked like a plea.

Not only did large payments into Kodwa’s accounts link him to potential corrupt deals, but EOH also paid for exclusive accommodation in Cape Town.

The accommodation was always ultra-luxurious and very expensive. All the apartments are in exclusive areas, like Fresnaye, Camps Bay, and Clifton.

Powell said Kodwa particularly liked The Pentagon Villa in Clifton and returned for a 3-day stay, which cost R150,000. He also requested the services of a private chef, which cost R11,700.

Kodwa admitted to receiving payments and luxury accommodation from EOH’s Mackay but denied it was linked to influencing tenders.

He also denied ever receiving requests from Mackay to influence how the state spent its money.

Kodwa said he was not guilty of corruption. “I have never engaged in corruption or facilitated corruption in my relationship with Mackay or any other person,” he said.

The former minister’s legal representative said the corruption allegations against him were damaging his reputation and causing him to be viewed as a corrupt person.

Kodwa was sworn in as an MP following the general elections earlier this year but resigned a few weeks later amid controversy regarding his appointment. He also resigned from the ANC with immediate effect.

As for Mackay, while he admitted to giving Kodwa money as a friend, he said these weren’t bribes.

Mackay has applied to the Director of Public Prosecutions, asking that the charges against him be withdrawn.

The pair briefly appeared in the Palm Ridge Specialised Commercial Crimes Court on Wednesday, 21 August 2024 where the case was postponed for Mackay’s application to be considered.