EOH has released provisional reviewed financial results and reports back on the investigation into R1,2-billion of suspicious activity.
The group has announced an enhanced King IV compliant board and new executive leadership.
The group has also defined its strategic focus of the short-term and continues to refine and assess its portfolio, according to a statement pasted on SENS this morning.
It has embarked upon a fit-for-purpose capital structure, and made progress towards reducing leverage.
Continuing revenue for the year ended 31 July 2019 is posted at R11 791-million, with normalised EBITDA of R792-million. The group has reduced its gross debt by approximately R500-million to R3 167-million; and reports a net asset value of R1 957-million.
“The past 12 months have been very difficult for EOH,” says CEO Stephen van Coller. “We have spent extensive time focusing on cleaning up the business both from a governance and financial perspective as well as understanding the group’s strategic capabilities.
“I have been impressed by the spirit of my colleagues who have worked tirelessly during this challenging period. While there is much still to do, the path is much clearer.
“In the short-term we will focus on continuing to deleverage our balance sheet while implementing governance changes and over the longer term we remain steadfast in a vision of a more synergised and focused offering that is well positioned to take advantage of the next wave of change in the ICT industry.”
He points out that, in July 2019, EOH reported that suspicious transaction to the value of R1,2-billion had been identified.
The ENSafrica team has made significant progress on the investigation and has completed almost 80% of its investigation into the R1,2-billion identified suspect payments.
This amount has since been modified to R935-million and includes transactions with no evidence of valid contracts being in place or where no work was done, valued at R665-million; R90-million of loans written off and overbilling valued at approximately R180-million.
The ENSafrica investigation team have also been able to confirm the key modus operandi that was utilised by the main perpetrators to commit wrongdoing at EOH which involved enterprise development ED partners and intermediaries.
EOH has suspended payments to and blacklisted 50 ED business partners implicated in suspect payments, some of whom have initiated legal challenges against the company.
Further investigation has confirmed that the main perpetrators of wrongdoing are confined primarily to a small group of individuals in the public sector team, according to Van Coller.
Apart from this type of wrongdoing, the investigation has also identified various opportunistic incidents of fraud and theft to the prejudice of EOH. This has resulted in the company initiating disciplinary measures which has led to the termination of employment relationships with a number of individuals.
Based on further information identified from ongoing whistle-blower reports and the ongoing investigation, the ENSafrica team has assisted EOH in making further reports to the authorities in line with its statutory reporting obligations, the company states.
“We have provided extensive information to the Hawks and the FIC and we are supporting and cooperating with the authorities,” according to the statement. “EOH is actively pursuing criminal charges as a complainant against various individuals implicated in wrongdoing. The investigation team is working closely with the authorities to ensure that they are able to identify illicit money flows.”