EOH has announced the long-awaited findings of the ENSafrica investigation will be revealed in two weeks.
The JSE-listed ICT services company launched an internal investigation into its public sector contracts earlier this year after software giant Microsoft in February terminated its channel partner agreement with the company.
Microsoft’s decision was informed by a report by an anonymous whistle-blower who filed a complaint with the United States Securities and Exchange Commission about alleged malfeasance to do with a R120 million contract with the SA Department of Defence.
In an update to shareholders this morning, EOH said ENSafrica, which was mandated to conduct the investigation, had submitted its forensic report and recommendations to the board.
“ENSafrica has concluded the investigation commissioned by EOH into public sector contracts and the board has assessed the findings of the ENSafrica report and is engaging with the stakeholders concerned where appropriate. Relevant findings and associated actions will be made public on or about 16 July 2019,” read the Stock Exchange News Service (SENS) statement from EOH.
On 15 February, the group issued a SENS statement saying it had initiated an internal investigation, supported by law firm ENSafrica, into EOH Mthombo's Channel Partner business unit. ENS is part of "a broadened review of large public sector licensing agreements".
EOH said ENSafrica was to perform an independent, ongoing, risk-based, monitoring and oversight role in all the group's major public sector bids, contracts and engagements.
The company, which has had a tumultuous time in recent years, yesterday sold 70% of its Construction Computer Software (CCS) business to RIB Software for R444 million as part of a strategic partnership agreement with the German buyer.
“The transaction is in line with EOH’s investment strategy to assist its intellectual property and software-based businesses to expand internationally,” says EOH.
The CCS group is a provider of software solutions for the construction and engineering industries. Its flagship products are the Candy construction management software designed for estimation and control of projects, and BuildSmart, a fully integrated enterprise management system.
EOH said a big chunk (75%) of the CCS sale proceeds will be used to reduce debt, and the remainder of the proceeds will be used as working capital for EOH.
The EOH Group comprises 270 legal entities, employing approximately 12 500 people, of which 11 500 are in South Africa and over 1 000 internationally in majority-held subsidiaries.
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