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Zondo shines spotlight on link between private sector and politics

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The EOH debacle shows how the company was involved in white-collar crime and the intersection between the private sector and politics.

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EOH was once a leading technology company in South Africa. It was small yet it managed to land a R210 million lucrative tender from the SAPS in April 2016.

Five years later, that massive contract is the centre of testimony at the Zondo Commission.

Law firm ENSafrica’s head of forensics, Steven Powell, who was hired by EOH chief executive Stephen van Coller to investigate activities at EOH Mthombo between 2014 and 2017, testified that EOH executives allegedly tried to move R42.5m using two sub-contractors. EOH Mthombo is the subsidiary of EOH.

Powell’s testimony revealed that EOH paid R1m to business lobbyist, George Sebulela.

Sebulela is allegedly one of the people associated with extracting millions of rand from EOH after the company scored large public sector contracts. He has denied any wrongdoing.

The contract is one of the questionable dealings that EOH has been engulfed in for years. As a result of questions around its conduct, EOH lost a business relationship with US software giant Microsoft. The termination of the relationship with Microsoft, in turn, sent EOH shares on a downward spiral.

Technology analyst Arthur Goldstuck said EOH executives tended to act “like a bunch of cowboys”.

“In terms of not having governance, they were not playing by traditional rules. The results of that is many of the entities within the group were running in a Wild West fashion, and that resulted in the debate on access and governance that saw fraudulent behaviour in the organisation,” he said.

Goldstuck said Van Coller joined EOH to clean up the organisation. EOH’s reputation has led to the company losing major contracts and going into debt.

“The moment they lost the Microsoft contract, the company crashed. The corporate image of the company was destroyed. Subsequently to that, they have been repaying their debt,” Goldstuck said.

The EOH debacle shows how the company was involved in white-collar crime and the intersection between the private sector and politics.

During his testimony, Powell revealed how politicians received “kickbacks” from the company.

The commission has previously heard evidence that the ANC in Joburg allegedly funded its 2016 local government elections campaign through a R50m donation from EOH.

Last week, Joburg mayor Geoff Makhubo couldn’t answer why EOH sent him business proposals that did not concern him. Makhubo has also denied any wrongdoing.

Powell also testified that Zizi Kodwa, the ANC spokesperson at the time, received more than R2m in payments and luxury accommodation linked to EOH. The payments were made while EOH was bidding for government tenders.

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