{"id":229377,"date":"2018-03-05T11:48:38","date_gmt":"2018-03-05T09:48:38","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=229377"},"modified":"2018-03-05T11:48:38","modified_gmt":"2018-03-05T09:48:38","slug":"mckinsey-doesnt-know-how-to-return-the-r1-billion-eskom-fee-report","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/229377\/mckinsey-doesnt-know-how-to-return-the-r1-billion-eskom-fee-report\/","title":{"rendered":"McKinsey doesn’t know how to return the R1 billion Eskom fee: report"},"content":{"rendered":"

Global consultancy McKinsey is still prepared to return the R1 billion it was paid for consultation work for Eskom – but is uncertain about where to send it, the Financial Times<\/a><\/strong> reports.<\/p>\n

Speaking to the publication, McKinsey CEO\u00a0Dominic Barton said that since agreeing to return the fee, he has been unable to get a clear indication from the South African government where it should be paid.<\/p>\n

The firm initially wanted to return it directly to Eskom, but with the switching in and out of the board and the political hand constantly being over the power utility, Barton questioned whether the money would then just be used to enable ‘something else’ to happen.<\/p>\n

McKinsey was contracted by Eskom to consult on the power utility\u2019s turnaround strategy, with Eskom noting that it had paid the group R1 billion for the contract. A further R564 million was paid to capital group, Trillian, for additional contract work.<\/p>\n

However, Trillian \u2013 which is tied to the Gupta family \u2013 has been accused of being a front company for McKinsey to secure contracts worth billions of rands from Eskom and Transnet, as well as receiving the multi-million rand payments for little to no work done on contracts.<\/p>\n

Following the wider state capture scandal hitting the public, Eskom said it was obliged by the Public Finance Management Act (PMFA) and Companies Act to seek to set aside the unlawful decisions and have the money returned.<\/p>\n

Many heads have since rolled at Eskom including those of the entire board. Chief among the big exists is former CFO Anoj Singh, who was heavily implicated in the Trillian saga, as well as former acting CEO\u00a0and head of IT, Sean Maritz, who controversially reversed Eskom’s claim that the contracts were unlawful.<\/p>\n

Before he resigned, Maritz was to appear before the new Eskom board to explain the decision. As he is no longer an employee, this is impossible; however, even former employees can still face criminal charges.<\/p>\n

McKinsey\u2019s initial response to the contract issue was that it would pay the money back only if the South African courts ordered it to do so, after finding that the contracts were invalid. However, that position changed, as the company didn’t want anything to do with the \u2018tainted\u2019 money.<\/p>\n

According to Barton, the scandal has hit its business in South Africa hard, with many big companies – including big banks – disassociating themselves from the consultancy. He said that the R1 billion refund has also hit the group’s partners.<\/p>\n

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Read:\u00a0McKinsey says it will pay back the R1 billion Eskom contract<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Global consultancy McKinsey is still prepared to return the R1 billion it was paid for consultation work for Eskom – but is uncertain about where to send it, the Financial Times reports.<\/p>\n","protected":false},"author":10,"featured_media":205540,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[1164,26,7088],"class_list":["post-229377","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-eskom","tag-headline","tag-mckinsey"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/229377","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=229377"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/229377\/revisions"}],"predecessor-version":[{"id":229393,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/229377\/revisions\/229393"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/205540"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=229377"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=229377"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=229377"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}