South Africa former energy boss arrested for fraud over deal with Swiss group

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South Africa’s police Thursday arrested eight people, including a former director of the state energy utility, on corruption charges linked to a multimillion-dollar contract with a Swiss engineering giant, prosecutors said.

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The former CEO of struggling energy firm Eskom, Matshela Koko, was arrested alongside his wife and two stepdaughters and four other co-accused on charges of money laundering and fraud, they said.

They later appeared in court in Middleburg, northeast of Johannesburg.

The allegations arise from Eskom’s Kusile power station, east of Johannesburg, awarding $111 million in allegedly irregular contracts to Swiss engineering company Asea Brown Boveri (ABB), the National Prosecuting Authority said in a statement.

Eike Meuter, a spokesman for the Swiss firm, said: “ABB continues to cooperate fully with the authorities in South Africa on this matter and is continuing to work on the Kusile project in line with its existing contractual obligations.”

A damning report by an investigative panel this year found that the ex-CEO was implicated in “state capture,” or the pillaging and mismanagement of state-owned enterprises, during former president Jacob Zuma’s presidency from 2009 to 2018.

The graft probe recommended the former Eskom boss be investigated for corruption and fraud and named him “an integral component” of the strategy “to capture Eskom.”

President Cyril Ramaphosa on Sunday vowed to implement many of the investigators' recommendations, describing corruption as “an assault” on South African institutions.

In 2020, ABB issued a statement saying they had reached a settlement with Eskom and South Africa’s Special Investigating Unit through which they hoped to “mutually release each other from any and all claims associated” with the Kusile contract.

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