At its peak, EOH’s post-scandal recovery had all the makings of a South African corporate redemption story. Once a byword for state capture and governance decay, the company — under the determined leadership of Stephen van Coller — pulled itself back from the edge of collapse.
Appointed CEO in 2018, Van Coller didn’t just clean house, he re-engineered. Over five bruising years, he dismantled a sprawling web of more than 280 legal entities, untangled thousands of legacy contracts, wrote down inflated assets, and rebuilt credibility with regulators, lenders and institutional investors.
The early results were hard-won but undeniable. For a brief period, EOH appeared to be on track to transform from a cautionary tale into a case study in governance-led revival.
But as with many turnarounds, the riskiest period wasn’t the crisis — it was the calm that followed.
In late 2023, cracks began to surface. Megan Pydigadu, Van Coller’s long-serving CFO and a cornerstone of the financial cleanup, resigned. She stayed through the 2023 audit, then quietly exited. Her successor, Marialet Greeff, assumed the CFO job in November — first as interim, then in a permanent role by February 2024. By July of the same year she, too, had stepped down. Simultaneously, executive chair and interim CEO Andrew Mthembu resigned.
Within 10 months EOH had lost its CEO, two CFOs and its board chair.
The message was clear: the scaffolding was coming down, and no-one seemed ready to build in its place.
Behind the scenes, the cost of the turnaround had been mounting for years. Van Coller would later reflect that, had he known the full extent of the rot, he may never have taken the job. His role became less that of a visionary leader and more of a corporate pathologist.
Fraudulent contracts were traced, grotesquely inflated asset valuations were revised down from billions to mere millions. Business units were sold. Growth was sidelined. Capital was redirected towards urgent deleveraging.
And yet, even as the books were stabilised, something deeper was slipping away.
In the end, it’s difficult to ignore the conclusion that the real winners were the banks. Their terms kept EOH afloat but only by draining the oxygen needed for reinvention. The balance sheet was saved, but the strategic soul of the business was left exposed and underdeveloped.
Perhaps more telling was the cultural unravelling that followed. Pydigadu, long seen as the financial conscience of the company, re-emerged as COO of Spar Group. Months later, Greeff joined her there. That two of EOH’s most senior finance executives — who had weathered the scandal — chose to exit not just the company, but the industry context entirely, reflects quiet disillusion with where EOH was heading.
The exodus made the appointment of Ashona Kooblall as group CFO in July 2024 all the more significant. Kooblall didn’t arrive from the outside. She was forged within EOH’s most stable division, iOCO, where she rose from finance director to division CFO.
Her promotion marked the first instance of internal succession — a sharp departure from a pattern of interim patches and external hires. She brought continuity, credibility and a working knowledge of the operating model that survived the storm.
Importantly, her appointment was not accidental — it was strategic. In a letter to investors in February 2025, Rhys Summerton, a major shareholder and board appointee, described Kooblall as “a key driver of the turnaround”.
Under her watch, EOH (now rebranded iOCO) began to shed its bloated cost structure, saving between R160m and R200m annually through deep, targeted cuts: audit fees down from R52m to R16m, IT consulting trimmed from R28m to R8m, office rental reduced by nearly 40%. Redundant governance layers — such as 23 internal auditors and 14 risk managers — were scrapped. Even eccentric excesses like a full-time in-house cameraman earning R1.3m were axed.
As Summerton put it: “Head office had become a tapeworm feeding off the 4,500 people doing the work.”
Each business unit is now expected to “row its own boat”, operate on lean KPIs and stand accountable for profitability. iOCO is beginning to feel less like a fragile survivor, more like a company re-learning how to compete.
Still, optimism must be measured. Kooblall inherits a business with thin margins, a shallow moat and a legacy of fragility. But she also inherits a simplified architecture, re-energised oversight, and — finally — a board that seems ready to back competence over consensus.
By early 2025, the final act of iOCO’s leadership transition unfolded not with precision but improvisation. On February 14, the company introduced an unusual dual-CEO structure, appointing Summerton, a capital markets activist and investor, alongside Dennis Venter, an operationally grounded executive. On paper, it was a complementary blend of strategy and execution. In reality, it reflected a deeper truth: the board couldn’t align behind one leader so it chose two.
The co-CEO model rarely inspires market confidence. It tends to raise the wrong kinds of questions: “Who’s in charge?”, “Whose vision prevails?”, “What happens when they disagree?”. These are not questions a company emerging from crisis can afford to entertain. It could reveal indecision and the lack of a cohesive strategic direction.
As Jim Collins warns in Good to Great, “Great leaders build enduring greatness ... and they build successors — not silos.”
Van Coller had five years and a contract extension to institutionalise leadership succession. Instead, his departure on March 31 2024 left a power vacuum. No internal candidate had been groomed. No road map for continuity existed. And the reforms he championed had no clear heir. What followed wasn’t a natural evolution, but an abrupt power handover — ultimately to the shareholders themselves.
And this is where Milkwood Capital enters the frame.
In the Milkwood Letter dated February 5 2025, Summerton reveals the strategic rationale behind his entry onto the board. Alongside Venter, he identified a classic post-scandal opportunity: a company with latent potential, buried beneath governance debris, misallocated capital and bureaucratic bloat.
The duo didn’t just talk about change, they enacted it. As if to deflect any suspicion of the changes being self-serving, both Venter and Summerton declined remuneration. Director fees were halved. They believed that iOCO could not grow until it was lean, accountable and strategically coherent.
For all this urgency and reformist energy, the co-CEO model still raises questions. If this turnaround is so compelling, why wasn’t a single CEO with the mandate to lead installed?
The truth may be that this isn’t a strategic design — it’s a holding pattern. As Summerton acknowledges in the letter, capital allocation and governance are what most smaller boards get wrong. His and Venter’s presence may be a bridge to something better, but that bridge still needs to lead somewhere.
This pattern isn’t unfamiliar in South Africa’s post-scandal corporate landscape. After Steinhoff’s crisis, leadership instability and strategy drift led to its delisting. Tongaat Hulett followed a similar arc: promising initial reforms under Gavin Hudson later unravelled under board fatigue and an absence of succession planning. EOH now stands at a similar juncture: reformed on paper but still unanchored in practice.
The co-CEOs are not a long-term fix. They are a signal of boardroom emergency, a substitute for a deeper bench that never got built. Until the board consolidates behind a leadership voice with a long-term mandate, iOCO’s transition from survival to strategy will remain stalled.
In that sense, the post-turnaround chapter is no longer about accounting restatements or cleaning up the past. It’s about whether iOCO can evolve from a story of redemption into a business of relevance.
Governance reform gave iOCO a second chance but if strategic cohesion doesn’t follow, it may not get a third.
One issue remains stubbornly unresolved: the inability to generate sustainable core profitability.
Even as revenues stabilised around R6bn, the company continues to limp forward with shoestring margins. Operating profit hovered below 4% for most of the post-scandal period and dropped to just 1.9% in FY2024. iOCO still hasn’t cracked the core question: can this business reliably convert sales into value?
The portfolio remains stuck in a commoditised IT services trap — system integration, managed services, cloud deployments. These are offered by dozens of rivals in a race to the bottom on price. In this landscape, switching costs are minimal, pricing power is elusive and differentiation is often more aspirational than real.
Van Coller had set a medium-term target of 10% ebitda margins as the baseline for sustainable performance — a goal that now feels distant.
iOCO has become leaner but not necessarily stronger. The acquisition-fuelled growth of the past never matured into a synergistic platform. What remains is a patchwork of subscale businesses, many of which lack integration logic or commercial defensibility.
As Summerton observed in February 2025: “This is not about growth for growth’s sake. It is about fixing the plumbing before we open the taps.” And that plumbing, as FY2024 revealed, is still leaking.
The company missed key project wins in connected industries, its smart infrastructure vertical, and suffered revenue slippage in enterprise applications, where internal restructuring created delivery bottlenecks. Top-line growth was flat — at a moment when momentum was critical. FY2025 has been framed as a catch-up year for deferred revenue, but that assumes delayed deals are recoverable and, more importantly, profitable.
When revenue arrives, will it be low-margin implementation work? Or higher-value, recurring streams that justify the company’s skills base and IP?
To their credit, the Milkwood-led leadership team have responded with urgency. The cost-cutting measures provided breathing room. But, as Summerton bluntly put it: “If we do not start earning margins that reflect the skills and IP inside the business, we are not going to rerate.”
One of the underappreciated dimensions of iOCO’s stalled turnaround is the depth of its capital starvation. While the company succeeded in reducing net debt to below R500m, it did so by selling off some of its most valuable assets. Among them were Sybrin, Syntell, and Information Services Group (ISG) — businesses once regarded as EOH’s “crown jewels”, with strong cash flows and high strategic relevance. Their sale funded urgent repayments, but it also gutted future earnings capacity and demoralised long-term investors.
We never missed an interest payment but we also couldn’t grow the business. The banks just took all the spare cash
— Stephen van Coller
Meanwhile, efforts to recapitalise through equity were hampered by a legacy shareholder base of more than 13,000 fragmented retail investors, many of whom held small, illiquid positions. This gridlock made a rights issue unworkable and left iOCO reliant on bank-syndicated debt facilities. As Van Coller put it: “We never missed an interest payment — but we also couldn’t grow the business. The banks just took all the spare cash.”
This dynamic created a vicious cycle: a company stuck playing defence, sacrificing tomorrow’s growth to pay for yesterday’s sins — trading solvency for stagnation. The result? A balance sheet repaired, but a business model still starved of oxygen.
The company’s tangible book value remains deeply negative (minus R67m), and cumulative retained losses exceed R4.2bn — both reminders that the balance sheet is still structurally impaired. iOCO’s liquidity also remains tight, with only R327m in cash and short-term investments, and a current ratio that hovers uncomfortably close to 1.
These signals point to a business that, despite lower gearing, remains capital-constrained and operationally fragile. In essence, the debt load may no longer be a crisis, but the scars it left on equity and trust still weigh heavily on investor confidence.
Historically, iOCO’s executive incentive structures appear to have emphasised short-term performance metrics such as top-line growth and ebitda over measures that more accurately reflect long-term value creation. This approach is likely to have contributed to the company’s aggressive acquisition-driven strategy, which ultimately proved unsustainable.
Without strong alignment to return on capital, cash generation, or risk-adjusted profitability, such frameworks tend to reward scale over efficiency. Furthermore, public disclosures suggest a lack of clawback mechanisms and limited equity-based compensation for senior management, raising questions about accountability and alignment with shareholder interests.
iOCO remains encumbered by the structural residue of its past — a sprawling network of more than 200 entities accumulated through years of undisciplined, acquisition-led growth.
As of July 2024, the group still included 48 legal entities. The complexity continues to impede operational execution, stretch management bandwidth, and obstruct cost efficiency. More critically, the lack of a unified operating model undermines strategic coherence, fuels duplication and diffuses accountability.
Roughly 14% of iOCO’s revenue is derived from public sector clients — a smaller share than some peers, but still material in light of the associated risks. Public sector contracts typically involve long procurement cycles, bureaucratic complexity and heightened counterparty risk. Payment delays can materially affect working capital, while shifting political priorities may jeopardise renewals or delay project implementation.
Despite five years of governance overhaul, debt reduction and operational triage, iOCO’s share price continues to reflect market ambivalence, if not outright scepticism. The stock trades well below sector peers on both price-to-book and EV/ebitda multiples, underscoring investor reluctance to reward a recovery still seen as incomplete.
That hesitation is mirrored in the evolving shareholder base. Institutional participation has increased — HSBC Private Bank Suisse almost tripled its stake from 4.64% to 12.8%, and newcomer Stanlib 1nvest entered with a 4.7% holding. But longtime anchor Lebashe reduced its position slightly and other former holders, such as Foord Asset Management and Peresec Prime Brokers, exited altogether.
While iOCO, the group’s main operating unit, has gained operational traction, the lingering EOH name still evokes associations with scandal and dysfunction.
And the discount is not irrational. iOCO still carries more than R4bn in accumulated losses and retains a negative tangible book value, leaving its equity base fragile despite the balance sheet repair. Profitability has technically returned. Operating profit for the six months to January 2025 stood at R213.8m, with net income of R123.5m. But the margin profile remains modest.
All this reflects a business stabilising, not scaling. Accordingly, the stock’s current earnings multiple of above 15 signals cautious acceptance of earnings normalisation, while the forward p:e of 9.27 suggests that the market is pricing in incremental improvement, not breakout performance.
Brand legacy is another drag. While iOCO, the group’s main operating unit, has gained operational traction, the lingering EOH name still evokes associations with scandal and dysfunction.
iOCO operates in a fragmented and intensely competitive IT services market. Its core offerings — system integration, cloud migration, managed services — are commoditised and widely available. Clients face little friction in moving to rival providers, particularly when procurement decisions are driven by price, not loyalty. This means scale and technical capability are necessary but insufficient for durable advantage.
Unlike software vendors with IP-driven lock-in, or consultancies with embedded client relationships, iOCO’s business model lacks a defensible economic moat. Unless it can build domain-specific IP, recurring revenue models, or long-term platform dependencies, margin pressure and client churn will remain persistent problems.
Perhaps iOCO’s most daunting challenge isn’t strategic but psychological: how to rebuild belief. Governance has improved and debt has been tamed. But institutional investors remain unconvinced. As one analyst put it: “It’s not enough to be clean, you have to be compelling.” Credibility isn’t earned through press releases. It’s rebuilt through consistent delivery, recurring revenues and visible execution wins.
The trust gap extends beyond the investor community. Clients must believe iOCO can deploy and maintain mission-critical systems without disruption. Regulators must trust that reforms are embedded, not episodic. And high-performing talent must view the company as a place to build, not one to bail from. Without alignment across these constituencies, reputational drag becomes a strategic anchor.
The rebranding to iOCO acknowledges this reality. It’s not just a name change — it’s a psychological reset. A way to shift the market narrative from scandal to software, from legacy baggage to operational leverage. But perception will only follow performance.
Margins remain thin (operating margin of just 1.9% in FY2024), and while net debt has dropped to under R500m, cash flow remains insufficient to fund meaningful reinvestment or provide a cushion against volatility. The recent appointment of co-CEOs and ongoing CFO turnover signal not just a leadership transition, but strategic ambiguity at a critical juncture.
At 415c a share, the company trades well above book value, yet with no strong narrative to support growth or competitive defensibility.
The turnaround of iOCO would not have been possible without the stewardship of Van Coller. Appointed in the wake of one of South Africa’s most notorious corporate scandals, he brought credibility, discipline and moral clarity to a company in free fall. His decision to confront state capture head-on, at significant financial and reputational cost, restored iOCO’s social licence to operate and won praise from institutions such as the Zondo commission.
Van Coller’s legacy was not without controversy. Critics argued he focused too heavily on investigating the past, spending more than R400m on legal and forensic efforts, while selling off key assets to pay down debt.
Shareholders saw their equity slashed, the workforce was halved, and many felt the restructuring benefited banks more than it did long-term investors. His departure package, awarded amid continued austerity, drew further scrutiny. Yet even his critics concede that without Van Coller’s intervention, there may have been no company left to criticise.
By contrast, the arrival of Milkwood Capital — now represented at board level — has brought a welcome shift from crisis containment to value-unlocking. But while the road map is promising, its success depends not just on vision but on execution. The risk now is not failure, but arrogance. This phase will require humility, a learning culture and relentless customer-centricity.
If iOCO can eliminate its remaining net debt and build a fortress balance sheet, the business will have the financial flexibility it has long lacked. That, coupled with strategic clarity, would mark the true beginning of a re-rating cycle.
It’s also to be hoped that iOCO will restore its formal Microsoft partnership (now still in limbo) and emerge as a job creator and enabler of digital infrastructure in South Africa.
The rebuilding has been painful. But if managed astutely, the next chapter could be transformational.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.