JSE-listed construction group Stefanutti Stocks has broken its silence on allegations that it, along with other companies, made payments to a slush fund to enrich top Eskom officials.
The exposé of the alleged slush fund payment was published by Scorpio, a sister publication of the Daily Maverick, on Thursday.
It alleges that R75 million was paid by Stefanutti and three other companies, including the local subsidiary of multinational Tenova Takraf, to Babinatlou Business Services.
R50m ‘channelled’ to three people
Scorpio claims that after receiving payments from the contractors, Babinatlou channelled at least R50 million towards a Kusile Power Station contracts manager and two of his former Eskom colleagues.
Stefanutti Stocks said on Friday that it has engaged in an open and transparent manner with the Special Investigation Unit (SIU) and importantly, as part of its process of disclosure, has brought the payments made to Babinatlou to the attention of the SIU.
The group stressed that it takes its regulatory compliance obligations very seriously and hence its open approach to engagements with the SIU.
High school building project
It said payments totalling R2 million were, following a request from Babinatlou director Hudson Kgomoeswana, made as part of a Stefanutti Stocks corporate social investment initiative to fund the completion of a four-classroom block at Mokhine High School at Sekhukhune in the Limpopo Province.
The company highlighted a number of measures that it adopted to ensure that the monies “were indeed utilised for their intended purpose”.
These included establishing from the SA Revenue Service that Babinatlou was in good standing; securing a breakdown of the outstanding works required to complete the project; being sent photographs of the completed works; being invited to inspect the completed works; and engaging with the principal of the school, Mr MS Makgwale, who after completion of the school block, invited representatives from Stefanutti Stocks to attend the opening of the school.
The company stressed that at the time it was unaware that Babinatlou may have been utilised as a front for certain Eskom executives, or that Kgomoeswana may be linked to certain Eskom executives.
The group added that the payments to Babinatlou were made purely for the purpose indicated and not for any illicit purposes involving any Eskom executives and, to the extent Stefanutti Stocks has been able to ascertain, the monies the group paid were used for their intended purpose.
Allegations of payments into a slush fund designed to benefit Eskom executives are somewhat ironic, considering that Stefanutti refers to a “public sector power project” and unnamed loss-making contracts in its oil and gas and mechanical divisions as contributing to its operating loss of R973 million for the six months to August, from a R124.8 million profit in the previous corresponding period.
In an obvious reference to Eskom, Stefanutti said the client’s intractable approach on the public sector power project with respect to certification of applications for work done has led to an additional provision of R462 million being raised for potential unrecoverable measured works to completion.
This is in addition to the provision of R263 million raised in February this year.
Shares in Stefanutti Stocks plunged 58%, from 12c to 5c a share early on Thursday, after it released its financial results and Scorpio published its exposé.
It recovered to close unchanged at 12c. The share closed at the same level on Friday.