EOH, a technology services company that is listed on the JSE, and the Special Investigating Unit (SIU) have come to a deal for an R177 million settlement that the former will pay back for its shady bids with the Department of Water and Sanitation (DWS).
The SIU started looking into the R470 million in tenders that the DWS had given the company in August of last year. The examination concentrated on four IT contracts that the department gave to the technology group and its affiliates, as well as their acquisition, negotiation, and execution.
The state probe came as a result of the Stephen van Coller administration’s increased efforts to clean up the company, which had a long history of unethical activity.
EOH had given itself till November to resolve the conflict with the state. The corporation had previously proposed an R52 million settlement price, but the SIU rejected the proposal and demanded R236 million instead.
The IT company claims in a statement that throughout the last four years since its appointment, the current EOH board and management has taken its inquiry into claims of corruption and irregularities involving it seriously.
In this regard, it continues, the EOH Group has established strong measures in a transparent and public manner to uncover wrongdoings and has extensively cooperated with law enforcement and regulatory organizations, including the SIU.
On 31 May 2019, it adds, EOH reported the wrongdoing to National Treasury and proposed to compensate the state for identified irregularities regarding the DWS contract.
“As part of this process, and after having concluded the full detailed analysis, EOH proactively made contact with the SIU in July 2020 to discuss firstly, what the analysis uncovered, secondly what work was done for value and thirdly to discuss compensation for aspects of the contract where no value was derived in respect of the DWS contract.”
After further engagements, the SIU, DWS and EOH reached agreement on an amount which all parties believed to be fair and equitable. The terms of the agreement are set out as follows:
- An initial up-front payment of R65 million which relates to duplicated software licences which will be refunded; and
- The remainder of an amount of R112 million to be paid over a period of 36 months commencing in January 2023.
The firm claims that EOH has adequately budgeted for this settlement in its financial records and confirms that it will not have an impact on the company’s income statement. This information was previously revealed in communications, SENS, and results announcements.
CEO Van Coller states concluded that the EOH board and executive leadership expressed their gratitude to the SIU and DWS for their professional engagement and in working with EOH to reach a settlement agreement.