EOH shares tank after Microsoft terminates partner agreement

South Africa’s EOH Holdings said the potential loss of partner agreements with Microsoft’s South African unit within the next 30 days won’t have a material impact.

While EOH is working to understand Microsoft’s concerns, the agreements are not ‘financially material’ for the company, Debbie Millar, a spokeswoman for EOH, said in a phone interview on Tuesday.

EOH will still be able to supply Microsoft products through re-sellers if the matter isn’t resolved, she said.

EOH underwent a restructuring and hired a new CEO last year to try shake off governance concerns after the company was linked to government contracts that were being questioned in 2017.

Founder Asher Bohbot returned as chairman while Stephen van Coller was named CEO in July.

Last month, state-owned power utility Eskom published allegations that its former chief procurement officer and other senior officials were involved in acts of misconduct that involved EOH.

The technology company said later the same week that the two allegations Eskom disclosed had been fully investigated, that EOH wasn’t implicated and that the matters were concluded last year.

EOH has hired a legal firm to carry out an internal investigation, according to Van Coller, who is due to meet with Microsoft later on Tuesday.

The company’s share price plunged as much as 34% and was 28% lower at R19.20 as of 14:10 in Johannesburg – its lowest since August 2011.

Read: EOH to focus business into four distinct operating units

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EOH shares tank after Microsoft terminates partner agreement