Tenova SpA, a unit of the Italian billionaire Paolo Rocca’s Techint Group, has appointed legal and forensic-accountancy firms to assess its dealings with South Africa’s Eskom Holdings after identifying payments that caused the company “concern.”
A contract between the mining and manufacturing-services provider and state-owned Eskom is one of a number of agreements that are being scrutinised by South Africa’s Special Investigating Unit. Tenova was hired in 2010 to carry out work on Eskom’s Kusile power plant, which it handled through a division called Tenova Mining and Minerals South Africa.
“In 2018, group internal audit processes identified certain payments made by TMMSA within the context of the Kusile project as a potential source of concern,” Tenova said in an emailed response to questions. The company has reported its findings to South African authorities and hired ENSafrica, the continent’s largest law firm, and accountants at Crowe Financial to help with investigations.
Eskom, a utility that supplies almost all of South Africa’s electricity, has been beset by corruption scandals that have played a part in saddling the company with about R454 billion ($27 billion) in debt. The group can’t meet its operating costs and poor plant maintenance has resulted in regular nationwide power cuts, stalling the economy.
In 2010, Tenova and Eskom signed a R962 million contract with an expected duration of just over six years, according to documents submitted by Eskom to state investigators. A decade and three modifications later, the work still hasn’t been completed and is estimated to cost R1.9 billion.
“All the revisions made to the scope and price of the contract with Eskom were legitimate,” Tenova said.
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