EOH not worried about litigation over public sector enterprises contracts
EOH has suspended payments to and blacklisted 50 enterprise development business partners implicated in suspect payments running into millions of rands. The IT Company said in its annual results.
Tue, 15 Oct 2019 15:58:35 GMT
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AI Generated Summary
- The financial results of EOH revealed suspicious payments amounting to 1.2 billion rands, leading to an extensive forensic investigation that uncovered widespread fraud within the organization, particularly in relation to public sector contracts.
- The lack of controls and governance within EOH allowed for the misconduct to proliferate, prompting the company to take decisive action by appointing a group risk officer, implementing internal audit processes, and tightening policies to prevent future irregularities.
- Despite facing challenges such as conflicts with auditors, reputational damage, and loss of key contracts, EOH remains resolute in its commitment to transparency and accountability, pursuing criminal charges against former employees and defending itself against litigation from blacklisted business partners.
South African IT company EOH has been embroiled in a financial misconduct scandal that has rocked the organization to its core. The company recently released its financial results, which revealed a staggering amount of suspicious payments totaling 1.2 billion rands. Following a forensic investigation, it was determined that 935 million rands were related to no work done or overbilling, with a significant portion of the amount specifically tied to fraudulent activities within the public sector contracts. EOH's Chief Financial Director, Megan Pydigadu, shed light on the findings during a recent interview on CNBC Africa. Pydigadu emphasized that the lack of controls and governance within the organization were key factors that allowed such misconduct to occur. The company has since taken steps to strengthen its internal processes, including appointing a group risk officer and implementing robust policies. Despite conflicts with auditors regarding the write-off of 5 billion rands, EOH remains committed to cleaning up its balance sheet and holding former employees, some of whom were in senior management positions, accountable for their actions. Criminal charges have been pursued against these individuals, signaling a new chapter in the company's quest for transparency and accountability. In light of the scandal, EOH has faced reputational damage and lost significant contracts, including one with Microsoft. However, Pydigadu remains optimistic about the company's future, citing an uptick in support from customers and a renewed focus on governance best practices. The company has also faced litigation from blacklisted enterprise development partners seeking redress for the funds they claim were stolen from them. While these legal battles may pose a challenge, EOH is determined to defend its position and move forward towards rebuilding trust and delivering value to shareholders.
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