Eskom accuses Deloitte of misappropriating contracts in SA

28 October 2019 3 min. read
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Deloitte’s woes in the South African market continue, as the Big Four accounting and advisory firm has come under fire from nationwide energy provider Eskom for malpractice when it comes to bidding for and acquiring major contracts. For its part, Deloitte has denied any wrongdoing. 

Eskom has come out and announced publicly that Deloitte broke a number of rules to win lucrative contracts at the energy distribution firm. The announcement comes amid an overall struggle at Eskom to stay afloat, in light of the state owned enterprise’s issues with considerable debt.

The utility company has been under considerable financial strain for more than two years now, driving many experts to suggest a change in its strategy. Some have suggested that the firm should invest in filling the electricity distribution gap that has emerged in South Africa, which will generate enough revenue to pay off its debts.

Early this year, South African President Cyril Ramaphosa announced plans to restructure Eskom’s operations into clearly demarcated verticals, with the objective of rescuing the company’s fortunes. The move came despite suggestions from market watchers that restructuring might in fact be counter productive.

Eskom accuses Deloitte of misappropriating contracts in SA

The company, which continues to grapple with these issues, has now issued a complaint against Deloitte for inappropriate winning of contracts. The contracts in question amount to a total value of R207 million, which includes projects such as the CFO Transition Lab. This is according to an Eskom statement.

More specifically, Eskom has accused Deloitte of arranging illicit meetings with Eskom officials to negotiate contracts under the table. Deloitte, for its part, has denied all allegations.

“Deloitte Consulting disagrees with and disputes the allegations made by Eskom in the media statement. While Deloitte Consulting is disappointed by this recent development, we welcome the opportunity to put our version and the facts of the matter before a court. Our legal team is currently studying the Eskom legal documents to prepare our legal response,” said Deloitte in a statement.

This is the latest in a number of incidents that Deloitte has been involved in over recent years. The firm was a central figure in the fraudulent practices discovered at Steinhoff International, and was also recently implicated with inconsistent accounts when it comes to South African sugar producer Tongaat Hulett.