Technology company EOH said on Friday that it will report losses for the year to July partly as a result of the R1.2bn irregular payments at one of its subsidiaries.
A forensic report by law firm ENSafrica, which was appointed by EOH before CEO Stephen van Coller joined the company, flagged “suspicious transactions” totalling R1.2bn between 2014 and 2017. EOH said these numbers now include the current potential impact of the findings of the ENSafrica forensic investigation related to suspicious payments.EOH said on Thursday that it will press criminal charges against employees implicated in corruption following the investigation.
EOH said there is some disagreement between the company and its auditors as to the timing of the impairments and whether they constitute prior-year restatements.In a separate announcement, EOH said Lebashe Investment Group, which had previously agreed to invest R1bn in the technology group in exchange for equity, had chosen not proceed with the third round of investment. So far, Lebashe has invested R750m over two funding rounds, resulting in it owning 29% of EOH’s stock.
“Lebashe took a conscious decision to allow EOH to establish a new independent board of directors without representation from Lebashe until after the conclusion of the ENSafrica investigation and the determination of the impact thereof,” EOH said.
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