Group CFO Megan Pydigadu on SAFM
EOH has been hit by massive once-off impairments in the last financial year - one to the tune of some 2,2 billion rand. In addition, the company has suffered huge reputational damage as its governance levels have been called into question after a report showed that millions were used improperly. EOH Group Financial Director, Megan Pydigadu, speaks to SA FM about all of these issues.
Reasons behind losses:
There are various contributing factors to the revenue losses facing EOH. These include a weaker economy and the loss of customers due to reputational damage. Megan says major losses have incurred especially in the ICT space and hardware business as this is one of the easiest spaces for customers to exit.
Apart from this, there has been a high level of acquisitions that the company has made in the recent years – some of them unjustified. Another factor can be attributed to prior corruption where suspect payments to the value of 1,2 billion rand where found, in the form of bogus contracts, invalid work, over-billing customers, and the handing out of enterprise development loans with no intension of having these paid back.
Correcting the issues of the past:
In an effort to clean-up the business, a huge focus has been placed on implementing stricter governance and control structures along with tightening up our strategy going forward. We have also been engaging significantly with our customers in an effort to have their faith in us restored. We’ve had great strides in this regard as the majority of our clients who had previously blacklisted us, are now starting to revoke these and continuing business as usual with us.
Another aspect has been to engage with our banks to assess current debt and negotiate a way to halve this debt in the next year or two. We’re also in the process of selling-off non-core assets in order to restore funds.
With regards to the suspect payments, we have reported these to the Financial Intelligence Centre and have lodged 7 section 34 reports with this institute along with the South African Police Service where criminal investigations are now underway to bring in an effort to bring suspects of these crimes to book.