You are currently viewing our desktop site, do you want to download our app instead?
Moneyweb Android App Moneyweb iOS App Moneyweb Mobile Web App

NEW SENS search and JSE share prices

More about the app

EOH plunges 12% on ‘unfounded’ Sassa report

Technology group says Sassa contract was awarded to it on merit.
Picture: Shutterstock

Technology group EOH’s share price tumbled more than 12% at one point on Tuesday as investors took fright at the resurfacing of corruption allegations involving a contract with welfare agency Sassa.

The share regained some composure in the early afternoon after EOH issued a statement to shareholders “strongly repudiating false and unfounded insinuations” published in Business Report, a newspaper owned by Independent Group.

The article in question appears to largely be a rehash of allegations in a story written by amaBhungane and published by the Daily Maverick early this year. 

“The Business Report article has relied on the original article for its information, with no new information provided,” EOH said in a strongly worded statement.

“At the time of publication of the original article, EOH publicly responded and repudiated the content, which was based on false and unfounded insinuations. EOH’s repudiation of the original article and full response was published by the media outlet the following day,” it said.

“The Business Report article has ignored EOH’s repudiation response to the original article. As with the original article, this latest article is also based on unfounded insinuations and allegations relating to EOH.”

In the statement, EOH said it has been a service provider to Sassa for eight years and is “proud of its track record and quality, depth of skills and expertise it provides”.

‘Considering all options’

“All services provided to Sassa were awarded on merit, after having undergone open and transparent tender processes, in compliance with the Public Finance Management Act.”

EOH said it is “considering all options available for recourse and corrective action in respect of any harm caused to EOH and its stakeholders”.

EOH’s share price has come under considerable pressure this year, driven lower not only by the weaker economic outlook, but also concerns over the recent retirement of founding CEO Asher Bohbot, who left at the end of June.

Read: EOH CEO Asher Bohbot to step down

The counter has lost almost a third of its value since the beginning of the year and was trading on Tuesday afternoon at a trailing price-to-earnings multiple of just 15, well below its historic levels.

This article was first published on TechCentral. To access the original, please click here.

VIDEOS

COMMENTS   7

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.

SUBSCRIBE NOW SIGN IN

Where’s there smoke there’s fire goes the old adage-
How did EoH manage to get so many government contracts – there is nothing special about this company! What comes to mind is obviously the “Gupta Connection”, SAP and Bohbot the “owner/founder and CEO” as well as one of the richest men in the country – who most probably put together all these billion rand deals with government/gupta, because no government deal/tender gets the nod if Atul is not behind it. (that being so obvious). Whats now coming to light is the level of Corporate Corruption in this country. So the Gupta’s are not the only baddies south of the equator – feel sorry for the investors of this company as it was very often promoted as a soon to be blue chip tech giant.
I wonder how they will spin this?

They got tons and tons of private company customers as well, and own a well diversified portfolio of businesses (that one credit bureau for example). Their government business isn’t that big a part of their overall business.

I don’t think this is a question around the mix of their customer base, but, more about whether they tendered and won the award fairly and without 3rd party interventions. If they won the contract unsullied then well and good but if there was undue influence from the 3rd party then their governance stinks

How do you win a contract in sefrica without going through the Gupta’s ? SAP had to pay, but, eoh does not. Sorry for you, no R100mil, no kontrak.

@bubby23 – Interesting that there are big shorts on EOH stock every time the “Smoke” is published. Someone shorted 150 000 shares right before this article was published making about R2 million profit. I wonder who knew that an old article with old info would be re-published on that particular day… Read the article – Not even she has the guts to claim a Gupta connection, yet she puts the name in the heading, to make people (like you) think there is a Gupta connection. And make you repeat it. And make you believe it. The more people believe, the further the share price falls, the more money “someone” makes… Well done – keep on spreading the rumours!

EOH,just like SAP are captured by Guptas. I just can’t understand that in every corrupt deal, an Indian is involved.

You were misled by the article’s heading – read the article (it;s on IOL if they haven’t pulled it yet), I dare you… No Gupta’s involved. She used the heading (and some old, already refuted information with some insinuations) to get EOH share price to drop – There were 150 000 shorts of the stock right before the article was published – someone made a lot of money on a very inaccurate article… Ask yourself who knew the article was coming?

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
BTC / USD

Podcasts

INSIDER SUBSCRIPTION APP VIDEOS RADIO / LISTEN LIVE SHOP OFFERS WEBINARS NEWSLETTERS TRENDING

Follow us:

Search Articles:
Click a Company: