EOH’s Stephen van Coller has likened the financial malfeasance that occurred at the technology company under former boss Asher Bohbot and several of his associates as similar to what happened at Steinhoff, the disgraced retail group at the centre of the biggest corporate fraud in SA history.
“It’s not dissimilar to what Steinhoff did,” Van Coller, the company’s CEO, said in an interview with Business Day. “People benefited. They got money and they need to give as much back as they can.”
Van Coller’s comments come after news broke late on Monday that EOH had filed a R1.7bn lawsuit against Bohbot, who is also a co-founder, alleging he failed to carry out his fiduciary duties by creating an enabling environment for corruption and financial irresponsibility.
The lawsuit, filed in the high court in Johannesburg, comes about three years after EOH, which provides technology services, was implicated in dodgy tender dealings with the government. The result was a collapse in EOH’s share price and billions of rand in writedowns.
EOH brought in Van Coller in September 2018 to help clean up the mess and appointed law firm ENSafrica to investigate allegations of fraud and corruption. The subsequent investigation found a hole of almost R1bn in its accounts stemming from underhanded dealings with the government. These included transactions worth more than R600m with no evidence of valid contracts being in place or for which no work was done, as well as R90m of loans written off and overbilling of about R180m.
EOH is also going after former CFO John King for a similar amount to that claimed from Bohbot, who it also wants declared a delinquent director. Former public sector head Jehan Mackay has also been hit with a R1.5bn lawsuit for alleged payments to third parties for bogus work while former EOH International head Ebrahim Laher faces a R1.58bn suit for allegedly abusing his position for personal gain.
“They obviously paid themselves bonuses and share options. There’s a need to recover that,” said Van Coller. “Whether they have the wherewithal and the money to settle those losses is another story.”
Van Coller said while he is unsure of whether EOH will recoup the amounts claimed from its former executives, the company had no choice but to seek damages to avoid getting blacklisted by clients.
“One of the requirements to avoid blacklisting is that you need to have prosecuted the wrongdoing. You need to have done everything you could do. That’s a requirement of National Treasury,” said Van Coller.
“Part of this is just making sure we do everything possible so that when our customers look at EOH they can say the new management and new board have done everything they could have done to right the wrongs of the past. Otherwise EOH gets blacklisted and then you may as well just close doors and then all the jobs go away and everything we’ve done for the last few years is fruitless.”
theunisseng@businesslive.co.za
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.