South Africa’s Eskom asks McKinsey, Trillian to return $117MN

South Africa’s Eskom has asked consultancy firms McKinsey and Trillian to pay it back 1.6 billion rand ($117 million), saying that an internal inquiry had found that the state power utility’s decisions to make the payments were unlawful.

“The interim findings from Eskom investigations into the circumstances surrounding payments made to both the companies point to certain decisions by Eskom, and resultant payments, as being unlawful,” Eskom said on Thursday.

The utility said in a statement it has written to both companies requesting their cooperation in returning the money.

McKinsey, the world’s largest management consultancy, said it was reasssured by initial findings of the Eskom inquiry that showed the consultancy did not authorise any payments to Trillian.

Trillian was not immediately available for comment.

A third of the money was paid to Trillian, a company at the time connected to the Guptas, a trio of Indian businessmen who South Africa’s anti-graft watchdog has alleged used their links with President Jacob Zuma to win government contracts.

The Guptas have denied any wrongdoing, saying they are pawns a plot against Zuma, who has also denied any wrongdoing.

McKinsey is under parliamentary investigation in South Africa for fraud over a $130 million contract to advise Eskom.

A U.S. risk management firm advised Eskom last year to withhold tens of millions of dollars in payments for advice from McKinsey, because the global consultancy’s “very unusual” payment model allowed it to charge fees in excess of market rates.

($1 = 13.6195 rand)

Reporting by Tiisetso Motsoeneng; Editing by Alexander Smith and Edmund Blair

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