South Africa’s Eskom suspends senior official over McKinsey letter

JOHANNESBURG (Reuters) – South Africa’s state-owned power utility Eskom said on Wednesday it had suspended its chief information officer over a letter he wrote to McKinsey, a consultancy firm accused of wrongdoing in winning a contract from the utility.

Eskom, the sole power supplier in Africa’s most industrialised economy, has been embroiled in a governance crisis and has been at the heart of allegations of undue influence in awarding tenders during Jacob Zuma presidency.

Chief Information Officer Sean Maritz, while acting as Eskom’s CEO, wrote a letter this month to McKinsey telling the firm that a contract, which the utility deemed unlawful, was in fact lawful, Eskom spokesman Khulu Phasiwe said.

“The board was not happy with the reasons he cited for writing a letter to McKinsey, saying there was nothing unlawful about the payments Eskom made to McKinsey,” said Phasiwe.

Maritz would be suspended as an investigation took place, he said.

Reuters was not able to reach Maritz or McKinsey for immediate comment.

Eskom asked McKinsey and a local consultancy Trillian to pay back 1.6 billion rand ($135 million) after an internal inquiry had found the state power utility’s decisions to make the payments were unlawful.

Trillian was at the time controlled by the Gupta family, friends of Zuma who have been accused of using their political connections to unduly win state contracts and influence cabinet appointments.

Zuma and the Gupta brothers have denied wrongdoing.

McKinsey, the world’s largest management consultancy, has denied doing anything illegal but agreed to pay back its share of the fee if the contract was found to be unlawful.

McKinsey was accused by an anti-graft watchdog and South Africa’s main opposition party of colluding with Eskom to pay Trillian a kickback as a way of winning the contract. McKinsey has rejected the accusations.

(Reporting by Tanisha Heiberg; Editing by James Macharia and Edmund Blair)

Xolani

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