Citizen Reporter
2 minute read
13 Sep 2017
10:45 am

McKinsey ignored warnings over Gupta-linked company Trillian – report

Citizen Reporter

In August, Eskom admitted it lied about payments of more than R1.5bn to Trillian and consultancy firm McKinsey.

Global management consulting firm McKinsey was reportedly warned of the risks associated with Gupta-linked company Trillian Capital Holdings four years ago, but ignored suspicions raised by its South African senior staff to secure a major contract with Eskom.

Reuters reported on Wednesday that two former McKinsey employees – who spoke to the news agency separately on condition of anonymity – contradicted the consultancy’s claim that it was only made aware of the Gupta links last year following a due diligence review in January 2016, which found that Trillian was unfit as the multinational’s local BEE partner.

The former employees said they had attended meetings in Johannesburg, where problems with Trillian had been discussed as far back as 2013.

Eskom admitted last month that Gupta-linked Trillian and McKinsey were paid R1.6 billion between April 2016 and February 2017 for joint consultancy work done in 2015 and 2016. This was after New York-based management consultancy firm Oliver Wyman raised suspicions about the payments and recommended a legal review.

The power utility initially claimed the payments were above board after the release of a damning report into Trillian by advocate Geoff Budlender.

Budlender was appointed by the former chairman of Trillian, Tokyo Sexwale, to investigate the company’s role in state capture. In his report, which was released in June, he found that Eskom paid Trillian R266 million for services without contracts in 2016.

Trillian is a financial services company in which Salim Essa, a close business associate of the Guptas, sold his controlling shares in June as pressure over allegations of state capture mounted.

The ex-McKinsey employees said they would have expected the concerns about Trillian to have been raised with McKinsey’s managers outside South Africa, but they were not sure if this happened.

Corruption Watch announced this week it would approach the US justice department with information allegedly linking McKinsey to corruption and bribery allegations at Eskom.

– Additional reporting African News Agency (ANA)


Brown extends Eskom’s deadline to come clean on Trillian to Friday