Date: Aug 10, 2018
The Gupta-linked Trillian Capital Partners has finally put up its version of events surrounding a partnership with global consulting firm, McKinsey & Co, that led to a staggering R1.6-billion in alleged unlawful payments to the two firms.
It says Eskom’s High Court case to undo decisions that led to the payments is replete with hearsay, irrelevant statements, generalised accusations, aspersions and pure conjecture.
Eric Wood, CEO of the umbrella company, Trillian Capital Partners, accuses the parastatal of launching this court action to satisfy “public sentiment”.
And, it’s being done in order to capitalise on McKinsey’s offer to repay its portion – a move that Wood billed a PR stunt by the global company.
He submitted a 130-page response to Eskom’s application for a review of decisions that led to payments totaling nearly R1.6-billion to the two companies.
The thrust of Eskom’s case is that its deal with McKinsey for two key projects was invalid, that it never had a direct contract with Trillian, and therefore there was no reason to pay the two companies a dime.
McKinsey, following negotiations with the National Prosecuting Authority and Eskom, repaid its portion in July but continues to battle the reputational damage caused by the scandal amid further investigations by US authorities and the upcoming Commission of Inquiry into State Capture scheduled to start on 20 August.
Digging in his heels, Wood charges that the parastatal has no right to come after Trillian’s windfall because the company “earned” those fees.
A key focus of his argument is that Trillian was roped in by McKinsey as a local partner and that it did the work regardless of whether a formal contract was ever signed with McKinsey.
The two companies executed a “partly oral, partly tacit and partly written agreement” for Trillian to be engaged as McKinsey’s supplier development partner on the Eskom projects, the Top Engineers Programme and the Corporate Plan.
“I use the word partner not in the technical sense but in a colloquial way as it is commonly employed in commerce,” Wood says.
McKinsey ditched the partnership when Trillian failed a due diligence but that didn’t stop Eskom from paying the local company – in fact, McKinsey provided a letter that paved the way for those payments, something the company now says it should not have done.
Wood says whatever questionable dealings went down in the corridors of power at Eskom were not brought about by corrupt dealings on the part of Trillian and that Eskom’s case is “inconsistent with corruption or bias”.
“Accordingly, even if the Eskom decisions now sought to be impugned were made irregularly, irrationally or unlawfully, Eskom has no right to claim the payments made to TMC.”
Trillian Management Consulting (TMC) is the Trillian subsidiary which received the Eskom payments between April 2016 and February 2017.
Eskom’s deal with McKinsey required a BEE or supplier development partner. Wood says the global company was “intent” on partnering with Trillian Management Consulting, then in its infancy, to fulfill that 30% BEE requirement.
They started working together before McKinsey could finalise a due diligence into the ownership of Trillian and some its subcontractors and continued until McKinsey told Trillian to “stand down” in August 2016.
At all material times, it was TMC’s understanding that McKinsey had tendered for and was awarded the contracts in accordance with Eskom’s procurement processes.
Wood said he had no reason to doubt McKinsey as the company by then was already deeply embedded at Eskom through its previous work with the utility.
Besides, the unofficial partnership carried on until Eskom prematurely cancelled McKinsey’s contract. Wood says during that time McKinsey had even committed to being “respectful and open-minded” about Trillian’s own subcontractors – E Gateway and Cutting Edge, both of which have turned out to be Gupta-linked companies featuring prominently in the #GuptaLeaks.
Wood also insists that it was McKinsey that took Trillian into Eskom and not the other way around.
The global company’s now former senior partners, Alexander Weiss and Vikas Sagar, did the initial introduction to Eskom staff and shared Trillian’s VAT details with Eskom as far back as November 2015, Wood says.
“McKinsey is a globally positioned and experienced consulting firm that had been engaged over a number of years to provide services to SoEs like Transnet and Eskom.”
