South Africa: A R1.2 Billion Pot of Toxic Soup At EOH

analysis

Eight people. That's all. Eight people out of EOH's staff of 11,500 put the entire organisation at risk through a systematic process of fraud, corruption and bribery that saw R1.2bn of irregular payments flow out of the company between 2014 and 2017. The company believes it has stemmed the rot.

Corruption allegations first rocked IT company EOH in 2017 and precipitated the share price plunge from R178 in 2017 to R18.70 today. However, it was a whistle-blower's report filed with the US Securities and Exchange Commission, first reported by TechCentral in February 2019, that enabled CEO Stephen van Coller to really focus on the investigation underway by law firm ENS.

"I asked ENS to drop everything and examine this alone," Van Coller said on a webcast on Tuesday. Within a short period of time, ENS reported serious irregularities and governance problems. "It has been devastating," he said. "I wouldn't wish the last five months on my worst enemy. To think that so few people can take from so many."

The problems, he explained, were located within a company called EOH Mthombo and more specifically within a head office business unit that straddled all 270 businesses within the broader EOH group...

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