The Swiss engineering firm Asea Brown Boveri (ABB) is expected to pay over R2.5-billion in punitive damages for the crimes committed at Eskom during the state capture era.
In a statement on Thursday, the Office of the National Director of Public Prosecutions (NDPP) confirmed that the National Prosecuting Authority (NPA) has finalised an agreement with the firm to reimburse the country as “a step towards accountability and justice for alleged offenders, particularly in the form of restitution for the serious crimes committed at Eskom during the state capture period”.
Reads the statement: “This agreement was reached in line with section 64[e] of the Prevention of Organised Crime Act. It is reflective of the NPA’s two-pronged strategy to deal with corruption through prosecuting perpetrators and recovering the stolen money. This punitive amount is in addition to the R1.6-billion that ABB paid to Eskom in 2020.”
The money will be paid into the country’s criminal asset recovery account within 60 days from December 1. The NPA said it will be used as recompensation for victims, as well as to assist with capacity and resources for use in the ongoing fight against corruption.
“It needs to be made clear, however, that this settlement does not indemnify any individuals involved in criminal conduct, including directors, staff and contractors of ABB. The NPA will continue to pursue these criminal prosecutions with the support of ABB, which has committed to ongoing collaboration to ensure accountability for the crimes allegedly committed by its employees.
“The settlement agreement makes it clear that the Investigating Directorate may proceed to prosecute ABB as a corporate entity in the event that the company breaches any terms of the settlement, including the payment of the agreed amount within the stipulated timeframe, and full cooperation and disclosures as per the agreement,” said the Office of the NDPP.
The crime
ABB is implicated in the saga involving an irregular contract of over R2.2-billion which it entered into with Eskom in 2015 for the installation of systems at the Kusile power station in Mpumalanga.
In the mud with the multinational engineering firm is former Eskom boss Matshela Koko, his wife Mosima Koko, his two step-daughters Koketso Aren and Thato Choma.
Former SA Local Government Association chief executive Thabo Mokwena, Eskom project director at Kusile Hlupheka Sithole, legal practitioner Johannes Coetzee and Watson Seswai are also implicated.
It is alleged that during Koko’s tenure, Eskom entered into a multibillion-rand irregular contract with ABB for the establishment of the R2-billion Kusile power station.
Following troubles with the work done at the power station, ABB subcontracted Impulse International and paid R549-million to the company. It is alleged that Choma, who was a shareholder of the company at the time, benefitted R30-million from the sub-contract.
It is also alleged that Coetzee had set up money-laundering vehicles to siphon money for the benefit of the Kokos.
Koko and his co-accused were arrested during an early-morning raid in October and subsequently made an appearance at the Middelburg Specialised Crimes Court in Mpumalanga on multiple charges of fraud, corruption and money-laundering.
NPA Investigating Directorate spokesperson, SIndisiwe Seboka, said at the time: “In 2009, Eskom contracted with Alstom to undertake the C&I [control and instrumentation] contract at Kusile power station. Alstom did not perform. Eskom engineers recommended that Siemens be appointed.
“The state alleges that group executive technology and commercial Koko influenced and abused his position to have Siemens, Billfinger-Mauell and ABB invited to bid for a closed tender. Mauell dropped out of the tender process and ABB South Africa was eventually appointed in 2015.
“ABB was awarded the C&I multimillion-rand contract. The state alleges that it then resulted in ABB South Africa appointing a company owned by Thabo Mokwena to provide skills development and industrialisation work to the value of R96-million contract, excluding VAT [value-added tax].”
Seboka said in 2015, Sithole granted four variation orders to ABB to provide extra work which was not covered in the initial C&I contract. “The state alleges that money flowed from the multibillion-rand contract and that this was the first attempt to launder money on behalf of Koko.”
“In 2015-2017, several contracts were awarded of which four form part of this matter for Impulse International. They were for providing Eskom and Rotek Industries with SAP work packages, specialised engineers and managers to oversee the different interphase contractors amongst other functions. The state further alleges that a portion of these contracts was used to butter hands,” she added.
Former ABB employees and German citizens, Markus Bruegmann and Sunil Vip, who are also implicated in the case, were not in court during the proceedings. However, it is not a train smash as ABB has taken responsibility for the crimes of its employees.
In this regard, the Office of the NDPP has said: “ABB has acknowledged liability and taken responsibility for the alleged criminal conduct of its employees involving contracts with Eskom. As a result, ABB has been forthcoming in cooperating with law-enforcement agencies conducting the investigations into such alleged conduct.
“It has assisted the NPA’s Investigating Directorate to secure evidence and key witnesses which have formed an essential part of the NPA’s ongoing investigations into the company’s alleged offences. It will continue to do so as part of the agreement.
“This settlement agreement was negotiated with partner countries, including the USA, Switzerland, Italy, and Germany. South Africa is getting the bulk of the settlement amount due to the nature of the crimes and the negative impact on South Africa and its people.
“The settlement has the immediate benefit of saving costs in the context of a protracted trial against the corporate entity [ABB], and securing funds upfront for the fiscus while ongoing criminal investigations into implicated persons continue,” it added.
Meanwhile, Koko is out on R300 000 bail. His wife and daughters, the lawyer and Coetzee were also released on bail of R70 000 each. They are expected to return to court in March 2023.
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