Eskom corruption: Multinational ABB to pay SA R2.5bn for dodgy Kusile deal

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Former Eskom CEO Matshela Koko.
Former Eskom CEO Matshela Koko.
Esa Alexander, Gallo Images, Sowetan
  • ASEA Brown Boveri (ABB) has agreed to pay over R2.5 billion in punitive reparations to SA for "serious crimes" committed at Eskom during the state capture era. 
  • ABB was awarded a controversial R2 billion contract in 2015 to install control and instrumentation systems at Kusile, which resulted in Impulse International getting R549 million when former acting Eskom CEO Mathsela Koko's stepdaughter was a shareholder.
  • The R2.5 billion is over and above the R1.6 billion that ABB previously paid to Eskom in 2020. 
  • For more financial news, go to the News24 Business front page.

Multinational engineering firm ASEA Brown Boveri (ABB) has agreed to pay over R2.5 billion in punitive reparations to SA for "serious crimes" committed at Eskom during the state capture era.

The National Prosecuting Authority (NPA) said in a statement on Tuesday that its Investigating Directorate finalised a settlement agreement with ABB. "This settlement represents a bold and innovative step towards accountability and justice for alleged offenders, particularly in the form of restitution for the serious crimes committed at Eskom during the state capture period," the NPA said. 

ABB’s payment must be made into SA’s Criminal Asset Recovery Account, within 60 days of 1 December. The amount will "be used as restitution for victims, and to assist in building South Africa’s capacity and resources in its ongoing fight against serious corruption".

The R2.5 billion is over and above the R1.6 billion that ABB previously paid to Eskom in 2020. 

Arrests

ABB was awarded a R2 billion contract in 2015 to install control and instrumentation (C&I) systems at the troubled Kusile power station. The station has suffered time delays, cost overruns running into the billions and design defects, and problems at the station have regularly contributed to load shedding.  

In October, the faulty installation of an exhaust vent resulted in ash particles building up inside a massive duct over nearly five years, which caused the collapse of a section of the pipe at Kusile. 

The Kusile deal resulted in ABB paying Impulse International R549 million in 2016 and 2017 - when former acting Eskom CEO Mathsela Koko's stepdaughter, Koketso Aren (née Choma), was a shareholder of Impulse.

READ | Eskom corruption arrests: The R2bn ABB contract, Kusile kickbacks and the Kokos

Koko, his wife, Mosima, and his stepdaughters, Koketso and Thato Choma; Thabo Mokwena, a former employee of the State Security Agency; Eskom's former project manager for Kusile, Frans Sithole; lawyer and alleged Koko fixer, Johannes Coetzee; and Koko associate Watson Seswai were arrested in late October and appeared in the Middelburg Regional Court on charges of fraud, corruption, and money laundering. They were all granted bail, ranging from R70 000 to R300 000, and will appear in court again on 23 March.

Former ABB employees, and German citizens, Markus Bruegmann and Sunil Vip - also part of the accused in the case - were not in court. 

In July two former ABB employees and their wives - Muhammed and Raeesa Mooidheen and Vernon and Aradhna Pillay - were arrested in connection with alleged kickbacks in exchange for inflated contracts that were awarded to Impulse. Both couples appeared in different courts and were granted bail. 

Cooperation

In September ABB said it put aside $325 million (R6 billion) as a provision to cover costs related to corruption probes at Kusile power station. It said at the time it was was cooperating fully with the authorities and "hopes to reach a final settlement with them in the near term".

READ | Engineering giant ABB puts R6bn aside as provision for Kusile corruption charges

The NPA said on Thursday that ABB had "acknowledged liability and taken responsibility for the alleged criminal conduct of its employees involving contracts with Eskom".

"As a result, ABB has been forthcoming in cooperating with law enforcement agencies conducting the investigations into such alleged conduct."

The NPA said it also assisted in securing evidence and key witnesses as part of its ongoing investigation. 

"This settlement agreement was negotiated with partner countries, including the US, Switzerland, Italy, and Germany. South Africa is getting the bulk of the settlement amount due to the nature of the crimes and the negative impact on South Africa and its people," the NPA said. 

It however pointed out the settlement did not indemnify any ABB staff, directors and contractors. 

"The NPA will continue to pursue these criminal prosecutions, with the support of ABB who has committed to ongoing collaboration to ensure accountability for the crimes allegedly committed by its employees."

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