South Africa to recover R2.5 billion from Eskom state capture contracts

 ·1 Dec 2022

As part of its ongoing criminal investigation into complex corruption at Eskom, the National Prosecuting Authority’s (NPA’s) Investigating Directorate has finalised a comprehensive settlement agreement with Swedish-Swiss multinational corporation ASEA Brown Boveri (ABB) to pay over R2.5 billion in punitive reparations to South Africa.

“This settlement represents a bold and innovative step towards accountability and justice for alleged offenders, particularly in the form of restitution for the serious crimes committed at Eskom during the state capture period,” the NPA said.

The payment must be made into South Africa’s Criminal Asset Recovery Account (CARA) within 60 days from 1 December 2022, it said. This punitive amount is in addition to the R1.6 billion that ABB paid to Eskom in 2020.

According to the NPA, the agreement was reached in line with Section 64(e) of the Prevention of Organised Crime Act (POCA) and is reflective of its two-pronged strategy to deal with corruption through prosecuting perpetrators and recovering stolen money.

ABB, an international company with a large South African footprint, was implicated in state capture era corruption. It had contracts worth R2 billion related to operations at Eskom’s Kusile power plant. The Kusile project has been long-delayed, suffered significant cost overruns and has had to be refitted as it suffered multiple design and operational defects.

Several key players in the alleged corruption of the Kusile contracts, including former Eskom executives and their family members, have been arrested and charged with fraud, corruption and money laundering in relation to these contracts.

According to the NPA, ABB acknowledged liability in the saga and has taken responsibility for the alleged criminal conduct of its employees involving contracts with Eskom.

“As a result, ABB has been forthcoming in cooperating with law enforcement agencies conducting the investigations into such alleged conduct,” the NPA said.

The prosecuting authority said that the company had assisted the NPA in securing evidence and key witnesses, which have formed an essential part of the NPA’s ongoing investigations into the company’s alleged offences. It will continue to do so as part of the agreement, the authority said.

This settlement agreement was negotiated with partner countries, including the USA, Switzerland, Italy, and Germany. South Africa is getting the bulk of the settlement amount due to the nature of the crimes and the negative impact on South Africa and its people.

“The settlement has the immediate benefit of saving costs in the context of a protracted trial against the corporate entity (ABB Ltd), and securing funds upfront for the fiscus while ongoing criminal investigations into implicated persons continue.

“The money, once paid into CARA, will be used as restitution for victims and to assist in building South Africa’s capacity and resources in its ongoing fight against serious corruption,” the NPA said.

The NPA said that the settlement does not indemnify any individuals involved in criminal conduct, including directors, staff and contractors of ABB.

“The NPA will continue to pursue these criminal prosecutions, with the support of ABB, which has committed to ongoing collaboration to ensure accountability for the crimes allegedly committed by its employees.”

The authority said that the settlement agreement makes it clear that the Investigating Directorate may proceed to prosecute ABB as a corporate entity in the event that ABB breaches any terms of the settlement, including the payment of the agreed amount within the stipulated timeframe and full cooperation and disclosures as per the agreement.

Read: Eskom coal thief arrested – and his boss went down with him

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