How do you fix corruption? It’s a question many South Africans are asking. Even President Cyril Ramaphosa seems to acknowledge this concern, with his comments about people’s fears that the government might not manage the KwaZulu-Natal flood relief funds without theft.
After the looting of an estimated R14bn during the 2020 Covid personal protection equipment free-for-all, there is little faith in the trustworthiness even of the governing party’s leaders. This was highlighted last month when KZN premier Sihle Zikalala commandeered a water tanker for his own household and eThekwini municipal staff were apparently stopped from helping themselves to care packages meant for flood victims and volunteers.
Nobody has spoken out more harshly about corruption than chief justice Raymond Zondo. In the state capture report’s fourth instalment he says the ANC “should be ashamed that this happened under its watch” and calls it a “miracle” that the National Treasury wasn’t captured too.
Zondo has rare compliments in the report for one company, and one individual, for the fight against corruption. Calling tech services firm EOH a “unique case”, he commends CEO Stephen van Coller and the group's board for reporting corrupt practices. “There is no other company that has been of greater assistance to the commission,” Zondo says.
He says evidence of corruption was “first brought to the attention of the commission by EOH itself”. The listed company had donated about R11m to the ANC, and had scored contracts worth R400m from the City of Joburg, mostly through the late mayor Geoff Makhubo, who was the finance MEC at the time.
In the years of Jacob Zuma’s presidency, when corruption was at its height, few companies emerged with reputations intact. McKinsey, PwC, Deloitte and SAP have been forced to pay back their fees with interest.
Zondo says in the report: “Alone among all the companies that have been mentioned in the proceedings of the commission, EOH proactively approached the commission [in November 2020] to be given the opportunity to disclose publicly what wrongdoing had taken place historically within its ranks.
“It sought also to explain what it has already done, and what it proposes to do, to make reparation for such wrongdoing and to prevent similar wrongdoing occurring within its ranks in the future.”
After Van Coller took up the post at the behest of EOH shareholders in September 2018, the company appointed law firm ENSafrica to do a forensic analysis of its historical involvement in irregular and corrupt procurement practices.
ENSafrica found “evidence of serious governance failings and wrongdoing at EOH” and the results were handed to law enforcement agencies. In June 2021 the company instituted claims worth R1.66bn against founder Asher Bohbot and CFO John King, who has since passed away. It is part of a R6.4bn claim against former executives allegedly involved in the corruption. At that point, EOH had shed 94% of its listed value. It has since repaid more than R40m to the department of defence over irregular contracts.
“Primary credit for the attitude taken by EOH must be accorded to Mr Van Coller,” says Zondo. Van Coller chose to investigate the negative reports on the company once he took over. He found a R1.2bn “hole” and set about trying to fix it. At the time, when the FM asked if he had regretted taking the job, he said he couldn’t allow some bad eggs to potentially put 11,000 people out of work.
I thought this was a great place to make a contribution to job creation ... Unfortunately, it turned from job creation to job saving
— Stephen van Coller
The former banker said it was not only his fiduciary duty to uncover the rot and to repair the damage, it was also the right thing to do. He took a substantial salary cut when he moved from his high-profile job in charge of MTN Group’s digital initiatives to take on an ambulance job at EOH.
Looking back, Van Coller now tells the FM: “I was comfortable giving up big salaries. [And] because I had a good run, I thought this was a great place to make a contribution to job creation.
“Unfortunately, it turned from job creation to job saving.”
He recounts the letters from EOH staff thanking him, for instance, when the pandemic wiped out many people’s jobs. “If you think of the letters I get from staff, saying things like ‘thank you for saving one of the jobs in our house’, it’s worth it.”
After he uncovered the extent of the malfeasance, Van Coller and his new management team realised that “it was a very small group of people at head office [that was corrupted].”
EOH set out to sell noncore companies and streamline its operations so it could save the bigger business. After offloading about R1bn in companies in 2020, the company consolidated its operations and shed about 10% of its staff. “There were some very difficult decisions to be made. It wasn’t easy to go before Zondo. It wasn’t easy sitting in front of all the boards and risk committees,” he tells the FM.
Van Coller gives credit to his executives and the remaining 10,000 employees. “There was a lot of team effort, with everyone believing that we could change. And we got it done.”
Of Zondo’s praise, he says: “To get that back from the chief justice is pretty incredible. We never did it for that. But for the first time we’ve been properly recognised.”
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