South African Utility Eskom Contracts Swapped for Party Funding, Probe Finds
08 Apr 2021

An oil blending and storage company secured deals to supply South Africa’s state power utility with fuel oil worth more than 15 billion rand ($1 billion) at inflated prices by paying inducements, including donations to the ruling party, a forensic investigation has found.

Econ Oil & Energy Ltd. allegedly won the contracts with the help of Thandi Marah, then senior manager of business enablement at Eskom Holdings SOC Ltd., who interfered in the tender processes, said legal firm Bowmans, which Eskom commissioned to conduct the probe. A copy of its final report dated Oct. 12 last year was seen by Bloomberg and confirmed by Eskom.

In return Nothemba Mlonzi, Econ Oil’s sole director, made payments requested by Marah, including a 100,000 rand contribution to the ruling African National Congress’s 2014 election campaign, Bowmans said. A separate presentation made in February by Nerina Otto, Eskom’s Acting Group Executive for Legal and Compliance, the authenticity of which was also confirmed by Eskom, made the same finding and alleges that Econ Oil overcharged the utility by 1.2 billion rand between 2012 and 2016.

“Bowmans provided Eskom with a report that found there to be ‘a reasonable basis to suspect that Econ Oil’s conduct breached internal Eskom policies,’ and that a corrupt relationship existed between Econ Oil and an Eskom senior manager,” the utility said in a response to queries.

By Loni Prinsloo and Antony Sguazzin, Bloomberg, 8 April 2021

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