Letter Template Affidavit 3 Awesome Things You Can Learn From Letter Template Affidavit
In 2018, an bearding email accustomed in my Inbox. It was from an agent at Eskom and they had an affair with our reporting. “It is aberrant that in all your accessories you acquire never mentioned Deloitte’s role and relationships with Gupta aggregation Nkonki …
“I assignment for Eskom and [am] afflicted that your investigations are not conclusive, unless you are absorption Deloitte – it is the activity of abounding actuality as this amount is so glaring.”
In fact, Deloitte was on our radar.
We knew that Deloitte had accustomed two consulting affairs at Eskom breadth it had partnered with Nkonki Inc, the beat black-owned auditing close which was covertly taken over by Gupta abettor Salim Essa.
We had beatific questions to Deloitte Africa arch controlling Lwazi Bam about the firm’s affiliation with Nkonki and accustomed a 13-page letter in response. But we had assured that Deloitte teamed up with Nkonki afore Essa’s buyout. And with little abroad to go on, we had anchored the adventure by mid-2018.
Then, in October 2019, Eskom’s afresh chair, Jabu Mabuza, filed an atomic affirmation in court, ambitious that the close pay aback R207-million in consulting fees from affairs dating aback to 2016, aback Essa accomplice Anoj Singh was Eskom’s arch banking officer.
Mabuza told the cloister that Eskom alone credible this affirmation afterwards accessing emails of the arch advisers who had aback larboard the company. “It is those emails that appropriate that the awards of the two [contracts] to Deloitte were not alone aberrant but awful improper… Best of the emails were brought to our absorption alone in the accomplished few weeks and some are still actuality recovered.”
Suddenly, the allegations we had heard begged afterpiece scrutiny.
Mabuza’s affidavit, filed in the Johannesburg High Court, tells a simple story: Deloitte was awarded two consulting affairs in September 2016, admitting its prices actuality badly college than added bidders.
On a allotment of assignment accepted as the Business Improvement Project, Deloitte bid R79.1-million, while the aggressive bids were R16-million and R9.1-million.
On addition project, the After-effects Administration Office, Deloitte bid R88.8-million while the aggressive bids were R14.6-million and R13.3-million.
Despite this, admiral who evaluated the bids were instructed to avoid amount as a agency and awarded both affairs to Deloitte. With two arrangement extensions and another, abate project, Deloitte’s bill would eventually ability R207-million.
“This shows authentic bribery on the allotment of Deloitte and the Eskom admiral who facilitated these affairs with actually no attention for Eskom’s sustainability,” Mabuza said in a account Eskom appear at the time.
Of course, the adventure is not absolutely so simple but, we discovered, no beneath anathema for Deloitte. In digging into this dispute, we scoured added than 1,000 pages of affirmation Eskom submitted to court, including emails, contracts, account of meetings, proposals from battling consulting firms and bid appraisal scorecards.
We additionally batten to a dozen individuals who were well-placed to animadversion on the facts, including advisers of state-owned entities, battling consulting firms and Nkonki insiders. Addition two tip-offs came from bearding sources. None of the bodies we batten to was accommodating to be identified.
“This is agriculture canal bullshit,” one adviser told us aback credible a breakdown of Deloitte’s fees. “This is what immiserates our country and bankrupts it.”
Deloitte has not filed its acknowledgment to Mabuza’s affirmation and for a ages banned to acknowledge to questions. Eventually, as the admeasurement of our assay became apparent, Deloitte Consulting managing administrator for Africa Thiru Pillay agreed to sit bottomward with us for a three-and-a-half-hour interview.
He attempt aback at Eskom’s “pure corruption” affirmation and instead accused Eskom of aggravating to annoyer Deloitte into a settlement. He said that over months of discussions, Deloitte had banned to acquire that it was “complicit with aberrant procurement”, or that there was “any association of corruption”, in its affairs with Eskom.
“Eskom’s appearance was that we should be anxious about the amount of our brand. And my response… was that we are actual blessed to allotment our perspective… at the Zondo Commission… or the court, basically that we would not be abashed into a settlement,” he told us.
But Eskom is not abetment down: “Eskom above advisers and some accumulated citizens were complex in base affairs which acquired Eskom a abundant accord of banking losses. The lath and administration of Eskom are absolution their fiduciary duties by convalescent all monies that were anyhow paid to suppliers and Deloitte is no exception,” it told us in a accounting acknowledgment aftermost week.
R60m for three weeks’ work
One of Mabuza’s added amazing claims was that “Deloitte was paid about R60-million for three weeks’ work”.
This is not absolutely accurate: It is accurate that three weeks afterwards Deloitte won the contract, it submitted two invoices totalling R59.1-million which were paid on the aforementioned day. But a breakdown absorbed to those invoices adumbrated that Deloitte claimed its consultants had already performed 35,850 hours of assignment – a acutely absurd accomplishment for the 13 amid business days.
Enter Bam, the Deloitte Africa arch executive: He ahead told us that, starting in March 2016, Deloitte began abutting Eskom’s then-chief banking officer, Anoj Singh, with unsolicited proposals.
The aboriginal was to abetment Eskom with its Multi-Year Amount Determination (MYPD) acquiescence to the National Energy Regulator, breadth Eskom would administer to set electricity prices for the abutting two years.
“This angle was analytical and burning to Eskom because Eskom bare to alpha advancing its assessment application,” Bam explained in his 13-page letter.
Unsolicited proposals were accustomed in agreement of Eskom’s Accretion and Accumulation Administration Procedure, he assured us, alike accouterment us with a archetype of the 156-page chiral to accentuate his point.
“This… requires Eskom, afterward cancellation of an unsolicited proposal, to affair an RFQ [request for quotation] to the bazaar to accord the bazaar a fair befalling to respond.”
But actuality was the kicker: “Although this did not action often, sometimes, because of Eskom’s burning charge for the casework set out in the unsolicited proposal, account providers at times commenced assignment ‘on risk’… afore the RFQ had been issued and the application has been concluded.
“In these cases, [it was] on the compassionate that if the account provider was bootless in accepting the work, afresh this was at the account provider’s risk,” Bam told us, underlining the aftermost byword in his letter.
In added words, Bam was adage that Deloitte was accommodating to action that it would get the contract, alike accustomed out bags of hours of assignment with no agreement that it would get paid.
But what is analytical is that the MYPD activity was not the alone instance breadth Deloitte allegedly formed the dice.
Between April and June 2016, Deloitte started assignment on addition four unsolicited proposals: establishing a after-effects administration appointment (RMO) in the accounts department; architecture a abstracted RMO for Eskom’s IT department; introducing SAP’s Hana software to Eskom; and acceptable with planning, allotment and forecasting.
All bristles projects would eventually be arranged up into the two affairs that Deloitte was awarded in September 2016. But by this point, Deloitte’s “at risk” bill would be sitting at R59.1-million.
Based on Deloitte’s own figures, this amounted to one director, one accessory director, six arch managers, 10 managers, 13 arch consultants, seven consultants and four analysts – 42 bodies in absolute – alive abounding time for bristles months straight.
All allegedly at risk.
“Nobody – no Deloitte administrator or accomplice – is activity to affirmation off on a 18-carat ‘at risk’ R50-million; this is a ‘wink, wink, nudge, nudge’,” a adviser from a battling close told us. “Think about it, what clandestine breadth close would run R50-million at accident with a [state-owned entity]? What’s the analytic antecedent that allows you to say, ‘This is okay’? It doesn’t accomplish sense, unless there’s an compassionate – a solid compassionate – that the ability agent on the added ancillary will cull the arrangement across.”
In added words, what would abate Deloitte’s accident was alive it had the arrangement in the bag.
In 100 words or less
“There is one arresting amount that should be mentioned,” Mabuza told the cloister in his affidavit. “Annexed to [most of the proposals]… was a anatomy for its acceptance.”
The one-page certificate he is apropos is beneath than 100 words continued and declared that whoever active it would bind Eskom to acquire both the “scope” and “budget” of Deloitte’s unsolicited proposals.
Although this makes a apology of the Public Accounts Administration Act, National Treasury’s convenance agenda on the use of consultants, Eskom’s own accretion rules and breadth 217 of the Constitution, Eskom admiral active three of the chiffon one-page contracts.
This is additionally breadth Deloitte has essentially afflicted its adventure from what Bam told us in 2018 about demography projects on “at risk”, underlined.
“At the time, it is not the case that Eskom was affairs all able casework through an RFP [request for proposals],” Pillay, the Deloitte Consulting Africa managing director, told us during our contempo three-hour interview.
He explained: “So, what happens is we appoint for archetype Anoj, the CFO… on a angle and as had been done before, our angle has an accepting breadth at the back… and Anoj afresh signs that, basically adage ‘I acquire your angle and Eskom is authoritative a charge to you that we are activity to be application with you.’”
On the Accounts RMO activity (budget: R34.7-million), Singh active a 50-word contract, but bootless to complete any added capacity or alike ample in his name. On the MYPD activity (budget: R15-million), Singh alone active beneath the words “accepted and agree”.
Despite this, Pillay told us that Deloitte advised these affairs binding.
“It absolutely was the arrangement of behaviour of the admiral – and it was above not aloof Anoj but above-mentioned – that if you gave them that angle and they active that, we did acquire that as a charge by Eskom, and that that actuality knew what they were doing, and that they were activity to cross the processes on their ancillary in adjustment to get a PO [purchase order] and a arrangement accustomed with us.”
Pillay told us that in anniversary instance Eskom asked the close to alpha assignment on the projects immediately.
In accounting answers, Deloitte said that in one instance it had mobilised a aggregation of consultants on Eskom’s instructions afterwards Maya Bhana, the accepted administrator in Singh’s office, “verbally accepted” the proposal.
Pillay told us at addition point in the account that “there was a array of an acknowledgment that there was some action they were now activity to chase and … they will exercise judgement about how they accustomed your proposals”.
“We acquire now asked Eskom to accelerate us the appointment of ascendancy of the CFO … [and added executives] because these individuals and their predecessors presented themselves in a way that they could affirmation that document,” said Pillay.
We conveyed all of this to Eskom, which responded in an email loaded with absurd contempt: “The Eskom appointment of ascendancy has never dealt with exact contracts. Maya Bhana was a [general administrator in Singh’s office] and her [delegation of authority] would not acquiesce her to acquire proposals on account of Eskom…
“Deloitte as a agglomeration accumulated aborigine is apprenticed by the Constitution and it is not absolved from… the accretion and accumulation alternation administration behavior of Eskom. It is additionally allowable to conduct its business ethically.”
Bhana agreed, adage in a WhatsApp: “Eskom action does not acquiesce for exact acceptances. So I would not acquire accustomed exact approval, or accepting of a angle afterwards afterward a accretion process. Deloitte has formed for Eskom for abounding years and should acquire the accretion process.”
Given how starkly Deloitte’s latest adaptation ancient from Bam’s in 2018, we asked Deloitte if it was now abnegation what its own arch controlling had told us at the time. Deloitte acknowledged admonition Murray Dicks told us that Bam was alone anecdotic the accustomed accretion process, but that in 2016, Deloitte believed there was a antecedent that accustomed Eskom in some affairs to acquire unsolicited proposals afterwards an RFQ.
“We accordingly abide to altercation that, as at 2016, we knew that an RFQ was bounden in the accident of Eskom accepting an unsolicited proposal,” Dicks told us in a aftereffect letter, which included some appropriate edits of Bam’s aboriginal response.
“Our acknowledgment to amaBhungane in April 2018 was able beneath a bound borderline to acknowledge to a array of questions. It was based on interviews with key agents and relied on their bond of events… We now acquire far bigger accuracy and compassionate of the amount and arrangement of contest than we did in April 2018.”
But we are not talking about hiring a breadth for R10,000, but affairs account hundreds of millions of rands in a awful aggressive industry breadth advancing black-owned firms are generally bound out by the big, all-embracing behemoths. In fact, Eskom had a plan to antidote this, but Deloitte acutely would try to bypass that too.
The console in the works
By June 2016, Eskom was in the final stages of establishing a console of 27 pre-approved consulting firms to bid on absolutely this affectionate of work. Nine spots would be accustomed to the big players like Deloitte, McKinsey and Bain, but addition 18 would be aloof for local, black-owned firms.
The purpose of the console was to “contribute to a fair administration of assignment amid consultants; and accommodate ‘greater governance’ in their appointment”, Mabuza told the court.
Deloitte knew the console was imminent; annal appearance that on 31 May 2016, Eskom arrive Deloitte to a affair to accommodate alternate ante for assignment on the panel. But instead of waiting, Deloitte delivered addition three unsolicited proposals over the abutting week.
“[W]ere we aggravating to capsize the panel? The acknowledgment is ‘no’,” said Pillay.
Treasury has afresh warned government and state-owned entities about alarming millions on consultants. Afore hiring a consultant, they should do a needs assay to accomplish abiding that the job cannot be done in-house.
But aback Sean Maritz, Eskom’s then-chief admonition officer, accustomed Deloitte’s angle to apparatus an SAP Hana activity two canicule later, he waited aloof one day afore acknowledging the project, forth with its R37.2-million amount tag.
That was on a Friday. On the Monday, Maritz accustomed addition unsolicited angle from Deloitte, this time to authorize an RMO for the IT administration for R19.7-million. Again, he waited aloof one day afore signing Deloitte’s accepting form.
In acknowledgment to questions, Maritz told us: “No assignment can be paid for if there is not a arrangement number.”
He would not animadversion on why he active the accepting forms, or whether he advised them binding, saying: “I am not in a position to acknowledgment on annihilation accompanying to Eskom accretion action because I am not in their application currently.”
Bam declared both these projects as “critical” to Eskom, but the bearding Eskom agent who emailed us disagreed and declared both the SAP Hana and IT RMO projects as “imposed on … the IT analysis by Anoj”, and, in their view, “disastrous projects aimed artlessly at looting”.
Pillay said: “We did not appoint ourselves on Eskom by affirmation that this affair was burning and it was not urgent. And we were absolutely not aggravating to assignment breadth there was no need.”
By 13 June 2016, as Eskom was finalising the console of account providers, Deloitte had teams deployed on all bristles consulting projects that it had brought to Eskom unsolicited.
“Anoj comes aback to us and says, ‘Now that you are on the panel, we are now activity to use the framework of the console in adjustment to get your arrangement for the assignment you’ve already started on and for the affairs and the abstracts I’ve signed,’” Pillay explained.
We asked Deloitte whether this set off anxiety bells. Afterwards all, the console was advised to acquiesce altered firms to attempt for work. But Deloitte told us: “It was cryptic how the console would be used.”
Unfazed, Deloitte kept ploughing assets into the bristles projects. Remember those 35,850 hours? Over the abutting 10 weeks, Deloitte ramped up their teams and began hiring subcontractors.
The off-the-record meetings
Pillay told us the aboriginal affirmation of agitation emerged in a one-on-one affair with Singh on 29 August 2016. Pillay said it had been several weeks aback Deloitte had mobilised resources, but no arrangement was forthcoming.
“We acquire an centralized analysis and we say to the activity team: This is unacceptable … we cannot assignment at accident in this way. And I alarm for a affair with Anoj to be set up.”
Pillay goes to see Singh, alone: “I afresh say to him, ’Here’s a account of projects that our business is now alive with you on. We mobilised … this was done in acceptable faith. These affairs are not forthcoming. This is unacceptable.’”
Two canicule later, Eskom came aback with bad news: Deloitte would charge to go through a aggressive behest action to win the work.
“We afresh had a affair internally … and we said, ‘That is antic because he has now active our letter and he’s reneging. Now what are our options?’ So we said, ‘Firstly, he charge accomplish that he’s activity to pay us for the assignment we’ve done up to this point.’”
Pause actuality for a moment and accede this: Deloitte had no affairs above the scattering of half-completed one-pagers that Singh and Maritz had signed. Deloitte had taken no acknowledged admonition on whether these abstracts would angle up in court. And the bill Deloitte basic Eskom to pay was sitting at added than R50-million.
Despite this, Pillay told us that Singh promised Eskom would pay. We asked: Were any of these affairs recorded or minuted?
The acknowledgment was “no”: “[U]nfortunately, we don’t acquire this in autograph but we acquire centralized emails in the acknowledgment that is now actuality provided to us by our advance accomplice [Shamal Sivasanker], who says Eskom … will account acquittal for the assignment we acquire done so far, because we mobilised in acceptable acceptance at their request.”
We asked whether anyone from Deloitte beatific a aftereffect email acknowledging the rather amazing charge that Singh had allegedly made. The answer, again, was “no”.
Eskom told us it had no almanac of Singh, or anyone abroad accordant to pay Deloitte for assignment done, but added that it had called Singh as a acknowledging in the case to force him to put a adaptation beneath oath.
“Eskom is a victim of maladministration, artifice and bribery perpetrated by its above advisers and corporates. This is a accord amid a corruptor and a corruptee,” it told us recently.
When contacted, Singh would alone say that he was “not allotment of … any accretion aggregation that fabricated the accolade of any breakable at Eskom”.
The accusation that Eskom has put in cloister affirmation is that abaft the scenes, Singh’s aggregation was already adamantine at assignment ensuring that the abounding arrangement – and not aloof the aboriginal R50-million – would be delivered to Deloitte’s door.
“[H]ow Deloitte came to be awarded the two Task Orders paints a actual advancing and annoying accepted picture. It indicates the admeasurement to which processes and procedures at accompaniment institutions … can be manipulated so that pre-determined outcomes can be accomplished by corruption and abnormal use of ability by those in arch positions,” Mabuza told the cloister in his affidavit.
“But the account is alike scarier: it shows the admeasurement to which off the almanac affairs amid suppliers and advisers of organs of accompaniment can appearance adapted outcomes … to ensure that assertive tenders were awarded to a accurate tenderer.”
Later in the affidavit, he states: “The official breakable action that followed was artlessly a charade, to purportedly legitimise and sanitise the irregularities and improprieties.”
Three weeks afore the Singh-Pillay affair at the end August 2016, Eskom’s afresh arch of accumulation capital, Prish Govender, had fatigued up two centralized memos acknowledgment why Eskom bare to appoint consultants for two new projects.
Contained in the motivations were the bristles projects Deloitte was already alive on – a rather acute actuality that Govender acutely bootless to acknowledgment to anyone at Eskom.
Eskom’s affirmation and argumentative administration would afterwards abridge a report, account the abounding similarities amid Deloitte’s unsolicited proposals, the centralized action that Govender drew up and the RFQs that were eventually beatific out to the market, implying that the Deloitte proposals had finer been acclimated as a arrangement for the tender.
“[I]n effect, Mr Govender and Mr Singh acceptable Deloitte not alone to actuate the ambit of services, but additionally how they were to be characterised… I abide that it is difficult to accept of a action that could in actuality be beneath fair, equitable, cellophane or competitive,” Mabuza told the court.
On 8 September 2016, Eskom arrive a scattering of consulting firms to bid on two new consulting projects: Business Improvement Activity and the After-effects Administration Office.
The borderline was bound – aloof one anniversary – but the amount of putting calm a abundant angle was still significant. Consulting firms that we batten to put the amount at anywhere amid “tens of thousands” and R250,000.
What added bidders were not told was that they were behest adjoin Deloitte for assignment that, in some cases, Deloitte had already completed and for which it had been promised payment.
We put it to Pillay that Eskom admiral had a abnormal allurement to baddest Deloitte in adjustment to regularise the affairs it was already alive on. For example, Eskom could not accomplish acceptable on its declared affiance to pay Deloitte afterwards a contract, and alike admitting Deloitte delivered its aboriginal balance afore the behest closed, this went unpaid.
If Deloitte happened to win the contract, that botheration went away.
“Eskom’s appearance is that the RFP action was an reconsideration aimed at sanitising the base conduct that had already unfolded,” Eskom told us aftermost week.
We put it to Pillay that Eskom’s abortion to acknowledge any of this was a artifice on added bidders, but he disagreed.
“[O]ur attendance there was not a secret… the above players in the bazaar knew that,” Pillay insisted. Which may explain why so few of them agitated to compete. In the end, aloof three firms submitted bids for the Business Improvement Project: Deloitte and two empowerment players, Ariogenix and Durapi.
On the After-effects Administration Office, bristles firms submitted bids – Deloitte, McKinsey, Letsema, Ariogenix and Durapi – but McKinsey, Deloitte’s alone adversary from the “big player” panel, was disqualified, acutely for appointment abstracts afterwards the deadline.
When the array were counted, Deloitte had denticulate the accomplished on both contracts, but additionally presented prices up to bristles times college than its competitors.
Normally, companies that canyon the abstruse beginning in a breakable are advised on amount (a account out of 90) and BEE (a account out of 10). That did not appear in this case. Instead, Eskom agents that evaluated the bids were told to avoid price.
This was a allowance to Deloitte, which outscored its competitors primarily in one category: “Proposal affair ambit requirements”. Considering that Eskom’s RFQ was based on projects Deloitte had conceived of and partly executed, this was hardly surprising.
“Did we anticipate that there was a achievability that we could lose? Yes,” said Pillay.
“[I]n hindsight, if you say, ‘Did we acquire an advantage because we were the incumbent?’ the acknowledgment is ‘yes’.”
But this is little alleviation to the abate industry players: “I’ve got to pay salaries at the end of the ages and you achievement that there’s a fair adventitious that if you put in [a proposal] that you will win,” one of them told us. “So if you’re bushing out a accomplished agglomeration of fig leaves [and] it’s sewn up, you’re activity to go broke and bodies are activity to lose their jobs.”
“Deloitte… seems to be actual excessive.”
When Sanjith Rampath, a arch administrator at Eskom and one of the bid evaluators, delivered his scores, he included a warning: “The one breadth that needs to be addressed is the costing from Deloitte, which seems to be actual excessive.”
Deloitte’s prices – R79.1-million and R88.8-million – were almost bristles times college than the added bidders, which bid amid R9.1-million and R16-million for anniversary allotment of work.
But there is no adumbration that this was allotment of the discussions aback an Eskom board headed by Govender met a few canicule afterwards and awarded the affairs to Deloitte.
Instead, the acumen for abnegation the added bidders was “inadequate ability loading”, which agency that Eskom did not feel that the added bidders had put advanced abundant consultants for the project.
It is accessible that Deloitte artlessly had the best butt of how abounding bodies it appropriate to assassinate these projects – Eskom’s own estimates, absolute in Govender’s centralized motivation, were R91-million and R86-million for anniversary allotment of work.
But it is additionally accessible that Eskom relied on the prices in Deloitte’s unsolicited proposals to set the bar. Pillay conceded that this may be so, but afresh fatigued Deloitte’s position that Eskom accustomed amount for money and that Deloitte’s announcement – based on estimates of 35,850 hours initially and over 128,000 hours by the end of the activity – was fair.
“When you attending at the capacity that we are ambidextrous with actuality – we’re ambidextrous with an MYPD 4 submission, this is a abstruse allotment of work; we’re ambidextrous with an analytics allotment of assignment application an SAP belvedere to advice them with amount abridgement and optimising their business… The capacity that we were ambidextrous with, they were affection of business, abstruse issues. They were not… arguable action capacity that were aggravating to debauchee the state.”
He afterwards added: “I do feel we were led bottomward a aisle by Eskom, and we approved to abet and do the best that we could.”
The altercation Deloitte has put advanced is that alike if the affairs were awarded irregularly, Eskom got amount for money and accordingly Deloitte should not be affected to pay aback the money.
“The apple is in a actual altered abode today. Aback you attending at what was accident in 2016; our ambiance is very, actual different. In hindsight, aback you attending at it, you ambition you had done things differently, but the catechism is, ‘Did we add value?’ and I anticipate we did. And what was our intent? Was our absorbed to go and bamboozle and accomplishment Eskom? Definitely not,” Pillay told us.
Into black waters
“[B]ased on the admonition that is now at hand, assertive inferences are irresistible,” Mabuza wrote in his October affidavit. “Mr Singh had bent by aboriginal 2016 that Deloitte was to be the adopted Consulting firm” on assertive projects at Eskom.
The question, if Mabuza is right, is why?
This is breadth we had to abandon from the assurance of documentary affirmation and attack into the black amnion of bearding and arcane sources. But it is additionally actuality breadth we begin actuality afterwards actuality who insisted that Deloitte’s affairs formed allotment of a accompaniment abduction play. DM
Part 2 advancing soon.
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