22/09/2017 06:16 SAST | Updated 22/09/2017 07:28 SAST

Minister Lynne Brown Instructs Eskom To Take Action Against McKinsey and Trillian

Action to be taken against suspended CEO and CFO also.

Siphiwe Sibeko / Reuters

Public Enterprises Minister Lynne Brown has instructed Eskom to start legal proceedings against companies including McKinsey over their involvement in disputed contracts at the country's state-owned electricity company, Fin24 reported on Friday.

Brown ordered that action be taken against consultancy firms McKinsey and Trillian, as well as suspended acting CEO Matshela Koko and chief financial officer Anoj Singh, her spokesperson Colin Cruywagen said.

Others who will be charged include former head of procurement Edwin Mabelane, acting head of group capital Prish Govender and senior procurement manager Charles Kalima, according to a report in Business Day on Friday.

McKinsey is accused of bribing Trillian to secure a huge contract with Eskom, by offering the firm 30% of its business with the power utility in exchange for the Guptas' assurance that they would get the contract. This week, the DA said it would be laying charges against McKinsey, according to News24.

According to Business Day, legal opinions, as well as outside opinions by independent firms seen by the paper, suggest Eskom ignored legal advice, to the benefit of McKinsey and Trillian.

This included a legal opinion drafted by Paul Kennedy, SC, which advised against the payment model used by Eskom.

The model used by Eskom allegedly allowed Trillian to receive R600 million without a contract, as McKinsey's BEE partner.

McKinsey's contract with Eskom was allegedly signed while Singh was being hosted by the Guptas in Dubai, according to the Gupta leaks, Business Day reported.

Trillian and McKinsey denied any wrongdoing. Eskom told Business Day it could not comment.