Eskom bribery: Multinational ABB to pay SA R2.5 billion for shady Kusile deal

ASEA Brown Boveri (ABB), a multinational engineering firm, has agreed to pay over R2.5 billion in punitive reparations to South Africa for “serious crimes” committed at Eskom during the State Capture era.

The National Prosecuting Authority (NPA) announced on Tuesday that its Investigating Directorate had reached an agreement with ABB. “This settlement represents a bold and innovative step towards accountability and justice for alleged offenders, particularly in the form of restitution for the serious crimes committed at Eskom during the state capture period,” the NPA said. 

ABB’s payment must be deposited into South Africa’s Criminal Asset Recovery Account within 60 days of the 1st of December. The money will be “be used as restitution for victims, and to assist in building South Africa’s capacity and resources in its ongoing fight against serious corruption.”

The R2.5 billion is in addition to the R1.6 billion ABB previously paid Eskom in 2020.

Arrests

In 2015, ABB received an R2 billion contract to install control and instrumentation (C&I) systems at the troubled Kusile power station. The station has experienced time delays, cost overruns in the billions of dollars, and design flaws, and problems at the station have frequently contributed to load shedding.

In October, a faulty exhaust vent installation resulted in ash particles building up inside a massive duct over nearly five years, causing a section of the pipe at Kusile to collapse.

ABB paid R549 million to Impulse International in 2016 and 2017 as a result of the Kusile deal, when former acting Eskom CEO Mathsela Koko’s stepdaughter, Koketso Aren (neé Choma), was a shareholder of Impulse.

Koko, his wife, Mosima, and his stepdaughters, Koketso and Thato Choma, as well as Thabo Mokwena, a former State Security Agency employee, Eskom’s former project manager for Kusile, Frans Sithole, lawyer and alleged Koko fixer Johannes Coetzee, and Koko associate Watson Seswai, were arrested in late October and appeared in the Middelburg Regional Court on charges of fraud, corruption, and They were all granted bail ranging from R70,000 to R300,000 and will return to court on March 23.

Markus Bruegmann and Sunil Vip, former ABB employees and German citizens who are also accused in the case, were not present in court.

Muhammed and Raeesa Mooidheen and Vernon and Aradhna Pillay, two former ABB employees and their wives, were arrested in July in connection with alleged kickbacks in exchange for inflated contracts awarded to Impulse. Both couples were granted bail after appearing in separate courts.

Cooperation

ABB announced in September that it had set aside $325 million (R6 billion) as a provision to cover costs associated with corruption investigations at the Kusile power station. At the time, it stated that it was fully cooperating with authorities and “hopes to reach a final settlement with them in the near term”

The NPA said on Thursday that ABB had “acknowledged liability and taken responsibility for the alleged criminal conduct of its employees involving contracts with Eskom”.

“As a result, ABB has been forthcoming in cooperating with law enforcement agencies conducting the investigations into such alleged conduct.”

As part of its ongoing investigation, the NPA stated that it also assisted in obtaining evidence and key witnesses.

“This settlement agreement was negotiated with partner countries, including the USA, Switzerland, Italy, and Germany. South Africa is getting the bulk of the settlement amount due to the nature of the crimes and the negative impact on South Africa and its people,” the NPA said. 

It did, however, point out that the settlement did not cover any ABB employees, directors, or contractors.

“The NPA will continue to pursue these criminal prosecutions, with the support of ABB who has committed to ongoing collaboration to ensure accountability for the crimes allegedly committed by its employees.”