South African Rights Group Asks for Probe of Hitachi

  • Helen Suzman Foundation calls for probe of improper payments
  • Hitachi allegedly paid South Africa ruling party for contracts

South Africa’s Helen Suzman Foundation has asked Public Protector Thuli Madonsela to investigate allegations that Hitachi Ltd. made improper payments to the ruling African National Congress to help it win contracts related to the construction of two power plants in the country.

“We requested that all the allegations against organs of state and private companies be investigated,” the foundation said in a statement on Thursday.

Hitachi sold a 25 percent stake in its South African unit to Chancellor House Holdings Ltd., an investment arm of the ANC, allowing the company and the party to share profits. Hitachi paid Chancellor House $5 million from the contracts and another $1 million in “success fees,” the U.S. Securities Exchange Commission said in a statement on Monday. Hitachi neither admitted guilt nor denied the allegations, the SEC said in a statement. The ANC has denied any involvement in the transaction.

Hitachi Power Africa won 38.5 billion rand ($2.5 billion) of contracts from state electricity provider Eskom Holdings SOC Ltd. to install boilers at the Medupi and Kusile coal-fired power-plant projects. The completion of the 4,788-megawatt Medupi facility has been delayed by about four years because companies including Hitachi didn’t complete work on time. This has contributed to electricity cuts that fed into a 1.3 percent economic contraction in the second quarter.

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