How state capture company paid R4bn to dodge prosecution in SA

Swiss engineering giant ABB, whose former executive is a star witness in the corruption case against former Eskom CEO Matshela Koko,  paid a total of R4-billion to the South African government to dodge criminal prosecution by the National Prosecuting Authority (NPA).

It also agreed to implicate targeted individuals in the alleged corruption involving Eskom and its power station Kusile.

The company first paid R1.5bn to Eskom in 2020 and also made its commitment to “complete Kusile works at zero profit”.

 The entity also paid R2.5-billion in “punitive reparations” to the government.

The money was paid into the South African Reserve Bank’s criminal assets recovery account recently.

The explosive information, which will send a shockwave across the country, is contained in the agreement between ABB and the NPA’s Independent Directorate ( ID).  In the agreement, which we have seen, the two parties state that the reparations payment was “in recognition of the social and economic harm done as a result of the conduct [of ABB and its employees]”.

The agreement further claims that ABB assisted the prosecuting authority by voluntarily sharing information and facts that would not ordinarily have been available to the NPA.

It also states that ABB “admitted, accepted and acknowledged responsibility under South African law for the actions and conduct of its officers, directors, employees, and agents”.

“The NPA’s Investigative Directorate agrees that it will not criminally prosecute ABB for any offences based on the information and evidence provided to the ID,” reads the agreement.

Sunday World can reveal that the company cherry-picked information it shared with the NPA, tailored and selected information to paint a certain picture, and, with that, shielded the entity from criminal prosecution.

However, elements of the criminal case remain questionable, and the situation is exacerbated by what appears to have been a maneouver to avoid implicating ABB criminally at all costs.

A case in point is a 2020 ABB internal report from Debevoise (a US-based international law firm) that this newspaper has seen, acknowledging the alleged overpricing in the contract with Eskom was instigated by the entity, not their subcontractor — Impulse, as NPA has been made to believe. 

This, according to ABB, has been the case so that Impulse could pass on alleged kickbacks to Koko, whose stepdaughter was a director at Impulse.

But their own report, which they have shared with German authorities, states something different.

“In ABB’s relationship with Eskom, on the other hand, the agreed prices were up to 864% higher than the prices agreed with Impulse. It follows it was not Impulse that earned money from the variation orders by overcharging, but ABB itself.”

Not only that, but another 2020 ABB report produced from their internal special investigation concedes that the company has no evidence of bribes paid to anyone, suffice to implicate people on circumstantial evidence.

“The  probe has been unable to uncover direct evidence of the payment of actual bribes, but circumstantial evidence consistently corroborates the existence of [bribery] schemes and their execution.”

Transcripts and minutes from the internal investigation show how ABB coerced its employees to take the blame in exchange for generous exit settlements and rosy reference letters for future employment elsewhere.

In an interview with one of ABB’s former senior managers, Goetz-Dietrich Wolff, it appears that he was being lobbied to throw his colleagues and
Eskom executives under the bus.

The minutes of that interview, under the subhead titled “summary of what had happened on the day”, show that Wolff participated in the exercise  on proviso that ABB guaranteed to secure his future. “Wolff remarked that he would appreciate it if ABB could assist him with finding a job. DZ (Dirk van Zyl, the legal counsel for ABB who headed the process) informed Wolff that ABB was working to assist him with the process, and over and above this, German labour laws will afford him all the protection he requires,” read the minutes.

“Wolff noted that he understands labour laws, however, when one stands in front of a judge in a case of corruption or fraud, he does not think that labour laws can protect him. Wolff remarked that he can give assurances about what we have in some of the emails, and he is willing to put in the work to find others and provide the story around those.

“Van Zyl informed him that there are a lot of processes at play. There is the DoJ (Department of Justice) in the United States and the NPA and SIU in SA. All these entities might actually be communicating, so it is going to be hard to balance out what statements are provided to what authority. We are, however, going to look after him as a witness, and this is clear to everyone.”

Wolff took the deal and is now a state witness in the corruption case that has been preferred against former Eskom executives and their ABB counterparts in their personal capacities.

The executives have been charged with corruption and last appeared in the Specialised Commercial Crimes Court in Middleburg earlier this month.

This newspaper recently reported on the shaky ground on which Wolff’s evidence against former Eskom executive Koko rested. It was marred by contradictions and hearsay.

It has also emerged that Wolff did not take the deal to become a state witness for nothing. Instead, he received the biggest exit package from ABB – more than R12million – when he left in mid-2019, according to an ABB report we have seen.

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