Tuesday, January 18

The group claims the ‘crisis’ was manufactured in EOH


A group claiming to be former employees and shareholders under the name Save EOH, all of whom have chosen to remain anonymous, claims that CEO Stephen van Coller gave false testimony to the Zondo Commission of Inquiry about the arrest allegations. state and orchestrated a crisis that resulted in the group’s market value more than halved to R6.8 billion from R16.4 billion when it was incorporated three years ago.

Most of this value has been lost to pensioners through pension funds, according to the group.

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The once ‘great power’ employed 11,500 people, but has since reduced it to 5,500, which has “affected the livelihoods of thousands of people, destroyed careers and caused immeasurable pain and suffering,” says a statement from Save EOH press issued. last week on Thursday.

He asks that Van Coller resign, alleging that he committed perjury on the Zondo Commission and due to his “poor performance” since becoming CEO.

Assets sold at gift prices

The group says that some 60 companies, including the company’s so-called crown jewels, have been removed for a fraction of their value, causing part of the rand 6 billion market capitalization loss.

This included Construction Computer Software (CCS), an SA-owned company that is reportedly among the best in the world in its field, with customers in 50 countries. It was sold to a German company for 25% of its market value, says Save EOH, noting that it has submitted its evidence to the Zondo Commission.

The group regrets the continued drop in EOH’s share price from around R40 when Van Coller hit around R7 today.

He also questions why EOH spent R245 million with the ENSafrica law firm, the result of which appears to have been aimed at “simply defaming EOH, purging members of the management and board, while pushing [Van Coller’s] image as a great leader, a great CEO and a ‘fighter against corruption’ ”, says Save EOH.

R500m in consultants

In addition, the group questions the fruits of another R 190 million spent on consultants.

“Van Coller artificially created a major crisis in EOH when there was none and then promoted himself as the white knight who saves it,” the Save EOH statement states.

The CEO is alleged to have promoted himself and in the process defamed EOH.

Read: Can EOH become the example of the radical change of the crisis?

The group says this is evident in some 1,700 newspaper articles about the company since Van Coller took over the top job.

Earlier this year, EOH filed civil lawsuits against former CEO Asher Bohbot, former CFO (and late) John King, and two other executives for a combined R6.4 billion for governance failures when they led the company. .

The charges against King and Bohbot include late payment, breach of fiduciary duties and breach of contract.

As Moneyweb previously reported, other former directors are also facing charges following an ENSafrica investigation in 2019 that uncovered evidence of widespread wrongdoing at EOH. This came after Microsoft ended its relationship with the TI group over a shady contract with the Department of Defense.

Read: Former EOH CFO John King Dies Amid Rand 1.7 Billion Damages Lawsuit

The evidence presented to the Zondo Commission, and outlined by ENSafrica’s forensic unit, paints a damning picture of a company involved in corrupt public sector tenders, with suspicious transactions worth approximately 1.2 billion rand discovered at the public sector subsidiary of EOH, EOH Mthombo.

They brought in Van Coller to clean up EOH. The latest group results for the financial year to July 2021 show a change from R1.3 billion operating loss to R147 million operating profit.

A Save EOH spokesperson, who asked not to be named, said that none of the former Save EOH-affiliated employees are being pursued by the company for civil damages, so they are not motivated by revenge or financial gain.

The group also hired a lawyer, Hein Valentine, who did not provide further information on the identity of the group members.

“All I can say is that I am representing the group,” he told Moneyweb.

Save EOH has also questioned the need to restate the financial statements for the previous four years, which resulted in billions of rand of cancellations and made it impossible to do a proper analysis of the company’s performance.

‘Purge’

Van Coller is also accused by the group of using unfair labor practices “to purge management, board members and anyone else” who opposed him.

Read: A look at how EOH’s turnaround is going

In several presentationsVan Coller has spoken extensively about the culture of corruption he discovered in the organization and its various government failures.

When asked to respond to the claims of the Save EOH group, EOH issued the following response to Moneyweb.

“In June 2021, EOH filed civil lawsuits against several former EOH executives seeking total damages of around R6.4 billion. The EOH board decided to do this after extensive legal research. The charges filed include late payment, breach of fiduciary duties and breach of contract. More civil lawsuits against other people can follow as the process unfolds.

“The EOH board believes that the recently launched ‘Save EOH’ anonymous smear campaign, which brings malicious and frivolous allegations against EOH CEO Stephen Van Coller, is an attempt to retaliate against these civil actions and efforts to Stephen van Coller and his team to reverse the organizational situation, ”the statement read.

“The EOH board led by its chairman Andrew Mthembu fully supports the EOH executive team, including CEO Stephen Van Coller, and recognizes their significant accomplishments over the past three years. The EOH board considers this personal attack regrettable. ”

The EOH board said it “has no further comment on the matter.”

* Save EOH says its mission is “to prevent the demise of EOH Holding Limited” and to protect the rights and continued employment of the remaining 5,500 employees at the company. When asked why the members chose to remain anonymous and in doing so devalue their claims, the spokesperson says they will remain anonymous for now “due to fear of targeted harassment and other security concerns.”


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