McKinsey Pores Over Eskom Documents in South Africa Graft ProbeBy
U.S. consultant says probe includes any Trillian interactions
McKinsey, Eskom ended work that began 2012 earlier this month
McKinsey & Co. is reviewing hundreds of thousands of documents related to South Africa’s state-owned power utility as part of a probe by the U.S. consultancy that includes any interactions with Trillian Capital Partners Ltd., a company linked to friends of President Jacob Zuma.
Eskom Holdings SOC Ltd. is conducting its own investigation of work done by Trillian Capital, to which the utility said it paid 495 million rand ($38 million) as part of a corporate plan and turnaround program. Eskom interim Chairman Zethembe Khoza said last week that Trillian worked for McKinsey as a subcontractor, which McKinsey denies.
The investigation “involves a detailed review of our client interactions and work at Eskom since 2012” and interactions with supply-development partners over the past three years, McKinsey said Wednesday in an emailed response to questions. Law firm Norton Rose Fulbright is helping with the probe.
The Guptas, who are in business with one of Zuma’s sons, have been at the center of allegations of so-called state capture and undue influence over government institutions. In November, South Africa’s anti-graft ombudsman published a report saying Zuma and some ministers may have breached the government’s code of ethics in their relationship with the family.
A July report into allegations against Trillian by a leading advocate showed the company submitted an invoice for 30.7 million rand to Eskom Chief Financial Officer Anoj Singh in April last year, which was paid the same day.
Salim Essa, a business associate of the Guptas, sold his stake in Trillian, the company said in a statement Wednesday, after reports about the family hindered the financial-services company.
McKinsey, which ended its work with Eskom by mutual agreement on July 10, said that all payments to Trillian were paid directly by the utility. The consultancy also hasn’t discovered anything that would require notification of U.S. authorities, it said.