NEWS
17/01/2018 07:30 SAST | Updated 17/01/2018 07:30 SAST

McKinsey: We Have Not Received Notice Of Preservation Order

The company says it has yet to receive notice of the asset freezing order reportedly obtained against it.

Arnd Wiegmann / Reuters

Global consultancy firm McKinsey says it has not received notice from the Asset Forfeiture Unit (AFU) in the National Prosecuting Authority (NPA) of a preservation order for its assets. A spokesperson told HuffPost SA that the company was still ready to pay back the money to Eskom, but it had yet to receive a response from the parastatal despite several requests asking for how it should go about doing this.

On Tuesday, Eyewitness News (EWN) reported that the AFU was expected to executive a preservation order against McKinsey and the Gupta-linked Trillian Capital, to freeze their assets worth a combined R1.6-billion. The order was reportedly obtained in the High Court in Pretoria last month and kept under wraps.

The companies are alleged to have unlawfully earned R1.6-billion in fees from Eskom for work not done.

The order, posted on Twitter by eNCA's Karyn Maughan, says the funds paid to Trillian were unlawful:

While McKinsey said it had only heard of the preservation order through media reports, the company reiterated that it is prepared to refund the state for the money it earned from Eskom.

According to Fin24, in October last year, Eskom said it wanted to recoup the funds paid to McKinsey and Trillian for their consultancy services which it said "appeared to be unlawfully paid out in 2016 and 2017". McKinsey said it would pay back the money.

On Tuesday, McKinsey spokesperson Steve John told HuffPost that the company had asked Eskom five times since then to initiate court proceedings so that it could return the money.

"We have read the media reporting but we have received no formal communication. As we have said before, including before the Parliamentary Inquiry, we will return the fee we earned from the Eskom turnaround programme (R1.028bn) no matter what. We welcome any efforts to help us pay back the money.

"The R1.028bn is in a ring-fenced account, held separately, and is ready to be paid. It has been there for over two months.

"We welcome all actions to resolve this issue and will continue to cooperate with the South African authorities and official investigations into these matters. We have written to Eskom five times since October 2017 asking them to instigate the required High Court proceedings. They have taken no action. We want this money to be transferred quickly so it can be used for the benefit of the South African people.

"We have been taking legal advice and will find another way to give this money to the people of South Africa in case Eskom decides not to pursue the matter in an appropriate legal forum. We are returning this money not because we have done anything wrong but because Eskom has told us they did not follow the appropriate process. Eskom had informed us, in February 2016, that it had secured the necessary approval from the National Treasury (documents provided by Eskom's lawyers confirm this). However, Eskom subsequently informed us, in October 2017, they had not done so," he said.

A source told TimesLive that the preservation order was primarily intended to freeze the bank accounts of the companies, "the majority of which are based overseas".

"They are going to deal with a number of international banks‚ especially in Dubai which is notorious when it comes to noncooperation in such cases. That's where a lot of the money has been taken and investigators will zero in there.

"Given the pressure and the overwhelming evidence contained in the emails‚ which the AFU has‚ it will hopefully be enough to force cooperation from Dubai banks," the source said.