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EOH scandal deepens

2019-07-28 18:38

Listed information technology (IT) service management company EOH has asked forensic investigators to probe allegations from a politically connected middleman that he influenced a R1.2 billion IT tender in favour of one of its subsidiaries.

In court papers filed two weeks ago, Lubabalo Nojiwa claims to have used his connections to persuade the City of Joburg to award the lucrative tender to EOH at the expense of two other IT heavyweights, Gijima and Accenture.

After EOH Mthombo won the contract after allegedly promising him 25% of the work, Nojiwa claims its directors cut him out of the deal.

The tender, awarded days before the 2016 local government elections, was for the upgrade and maintenance of the city’s SAP system.

But as recently as January, after Nojiwa accused EOH Mthombo of fronting and threatened to spill the beans, it apparently agreed to cut his company, Buzz Mobile, into the deal – albeit at a much reduced rate.

Nojiwa said in his statement of claim that he was attending an SAP conference in Nice, France, in 2014, when he met former EOH Mthombo chief executive Ebrahim Laher and another executive. There, he claims, he “first engaged and commenced with negotiations to provide possible SAP service to the City of Joburg”.

He alleges that Laher then told him “that the political relationship between EOH and the city was unstable” and asked him to resolve it.

This, he claims, he did by facilitating a meeting between the company and the city’s “political leaders” the following year.

Nojiwa, who claims he was promised up to 25% of the deal, says EOH bosses asked him to obtain all the details of the tender before it was published, which he did from his contacts in the State Information Technology Agency. In his statement, Nojiwa further claims that he held “multiple meetings” with EOH Mthombo bosses to discuss strategies to put the company ahead of competitors “such as Accenture and Gijima”.

SPLIT TENDER

“Chief commercial officer Ashley de Klerk advised that Gijima was strategising for the tender to be split so that it was awarded the training and hardware portion. The split would not be ideal for EOH and Nojiwa would suffer financially, especially relating to (his) 25% participation,” Nojiwa states in court papers.

“De Klerk requested that Nojiwa engage with city to ensure that a split tender is not considered and to ensure that the city awards the tender as a whole,” the papers state.

“Nojiwa, on behalf of EOH Mthombo, engaged with the city. Shortly thereafter the city advised that splitting the tender was abandoned. That effectively disqualified Gijima ... and only EOH remained in the bidding process.”

Immediately after learning from city officials that the tender had been awarded, Nojiwa claims he called De Klerk, who told him he would be in contact, but then allegedly ignored his calls. Laher, he claims in papers, then told him De Klerk was dealing with the matter and told him to “engage” with Gauteng ANC chairperson Paul Mashatile.

In February last year, Nojiwa’s lawyers wrote to EOH Mthombo detailing the “impasse” between the companies relating to “fronting practice and unjustified enrichment on the part of EOH”, and asked for a meeting.

But, says Nojiwa in court papers, they then agreed to cut him in, but only for 2.5% of the entire contract value.

EOH did not respond to detailed questions, but said the court papers were only served on them on Wednesday. “The allegations and claims levelled against EOH Mthombo by Buzz Mobile and Nojiwa have to be investigated,” it said.

EOH has been embroiled in scandal since last year. The company hired law firm ENS to investigate allegations of corruption, which subsequently found evidence of serious governance failures, as well as tender irregularities and other unethical conduct, by its head office and Mthombo in business with the state.

The company told City Press that the investigation was ongoing, and that it had “asked ENS to include Mr Nojiwa’s specific allegations in its investigation and, based on its findings, EOH will respond to the summons”.

Gijima has filed an application before the High Court in Johannesburg to have the contract between EOH and the city reviewed and set aside, alleging that the tender had been awarded irregularly. The matter has yet to be heard. No further comment from Gijima was forthcoming.

City of Joburg spokesperson Luyanda Mfeka said the city’s internal forensic investigations department would look into the allegations.


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city of joburg
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September 15 2019