Deloitte Pays Back R150-Million to Eskom Amidst Irregular Procurement Controversy

Deloitte, a major player in the global accounting sphere, and Eskom, South Africa's chief electricity supplier, unveiled in a joint statement on Friday, that Deloitte will recompense Eskom a sizable R150-million. This announcement concludes a tense standoff, following findings from an exposé by investigative journalism unit amaBhungane.

Earlier, the report presented by amaBhungane extensively detailed the manipulation of procurement processes to favor Deloitte, with contracts amassing up to R207-million. Acute criticism was further directed at Deloitte's business affiliation with Nkonki Inc, an auditing company secretly bought over by business partner of the Guptas, Salim Essa.

Up to December, Deloitte Consulting's Africa Managing Director, Thiru Pillay, remained firm on non-settlement, denying any implication of corruption or underhanded dealings with Eskom. However, in the most recent statement, Deloitte concedes its participation in the irregular procurement process.

Despite the financial reparation, Eskom's investigation cleared Deloitte of allegations concerning state capture or corruption. This verdict deviates greatly from a previous announcement by Eskom's then chairman, Jabu Mabuza, categorizing the procurement deals as "pure corruption."

With this settlement, Deloitte retains approximately R57-million of its original fees, aligning its compensation closer to competitive prices in the consulting industry. According to an anonymous industry insider, Deloitte's initial rates were exorbitantly high, even being regarded as "feeding trough nonsense."

In a final note, Eskom assured that it did see value from Deloitte's services, despite the extravagance of the original consultancy fees.