South Africa: Deloitte - We Deny Any Association or Involvement in State Capture, Corruption

Auditing firm Deloitte has denied any involvement in state capture or corruption, particularly relating to its consultancy contracts with state power producer Eskom, as reported this week by investigative journalism group amaBhungane.

The company issued a statement on Friday morning disputing allegations of corruption made against it in two amaBhungane articles published this week (read Part 1 and Part 2 ). Both articles were also carried on Fin24.

Eskom is now litigating against Deloitte in a bid to get it pay back R207m for two tenders and other work the cash-strapped power producer says the auditing firm was "improperly" awarded in 2016.

Deloitte intends to oppose the court application. It said it would be responding to allegations made about it to Eskom in its answering affidavit, which has yet to be filed. According to Deloitte, the process has been delayed because Eskom has not yet produced the documents on which it relies for its own affidavit.

"This failure deprives us of the opportunity to respond effectively to the allegations and to conclude the matter with speed," it said.

Deloitte added it had requested that amaBhungane delay publishing the two articles until the answering affidavit had been filed, which responds to Eskom's allegations has been filed. "They unfortunately decided to proceed with publishing nonetheless," Deloitte said of amaBhungane. "We disagree with the allegations, inferences and speculation in both articles."

amaBhungane's first article reference's Eskom's founding affidavit, deposed by former board chairperson Jabu Mabuza. According to the affidavit, Deloitte was awarded two consulting contracts with Eskom in September 2016, despite its prices being dramatically higher than other bidders, as amaBhungane reported.

The article also notes that Deloitte partnered with black-owned auditing firm Nkonki Inc, which has later found to have links with Gupta business associate Salim Essa. Deloitte has noted, and amaBhungane acknowledged in its reporting, that Deloitte's partnership with Nkonki dates before Nkonki's association with Essa.

In its statement, Deloitte distanced itself from the Guptas and state capture.

"We refute the speculative attempt by amaBhungane to drag Deloitte into the 'state capture' narrative despite the lack of evidence to substantiate this claim.

"Our business relationship with Nkonki predates its affiliation with Gupta and was based on Nkonki's competence and skills. Nkonki delivered value on all their engagements with Deloitte. Our partnering arrangements were not limited to Nkonki; during the same period we proposed and worked with various other BEE entities on Eskom projects," Deloitte said.

The firm also took issue with the second amaBhungane article, which it said, "makes various speculations and inferences which are apparently based on anonymous sources and documents to which we have no access".

Source: Fin24

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