Switzerland Slaps ABB on the Wrist With R75 Million Fine for Bribery at Eskom in South Africa

Google+ Pinterest LinkedIn Tumblr +
  • Switzerland’s attorney general has fined ABB four million Swiss francs (around R75 million) for bribery it engaged in during the construction of Kusile Coal Power Plant in South Africa.

The attorney-general stated that ABB admitted to not taking “all necessary and reasonable provisions” to prevent bribery payments to officials in South Africa.

“Various ABB employees set up from 2013 on a bribery scheme in order to obtain orders, through excessive payments to subcontractors, for the construction of a coal-fired power plant in South Africa,” the attorney general’s office said. “ABB South Africa received orders for a value of at least $200 million with bribery payments of at least 1.3 million Swiss francs,” they added.

The US justice department and Securities and Exchange Commission were also expected to resolve with ABB on Friday.

In South Africa, the National Prosecuting Authorty’s Investigating Directorate (ID) has finalised a comprehensive settlement agreement with ABB to pay over R2,5 billion in punitive reparations to South Africa. This settlement represents a bold and innovative step towards accountability and justice for alleged offenders, particularly in the form of restitution for the serious crimes committed at Eskom during the state capture period.

The payment must be made into South Africa’s Criminal Asset Recovery Account (CARA) within 60 days from 01 December 2022. This agreement was reached in line with Section 64(e) of the Prevention of Organised Crime Act (POCA). It is reflective of the NPA’s two-pronged strategy to deal with corruption through prosecuting perpetrators and recovering the stolen money. This punitive amount is in addition to the R1.56 billion that ABB paid to Eskom in 2020. Read more 

Related news: Eskom welcomes the arrest of former ABB employees in corruption case

ABB Ltd, an international company with a large South African footprint, was implicated in state capture  era corruption. ABB has acknowledged liability and taken responsibility for the alleged criminal conduct of its employees involving contracts with Eskom.  As a result, ABB has been forthcoming in cooperating with law enforcement agencies conducting the investigations into such alleged conduct. It has assisted the NPA’s ID to secure evidence and key witnesses which have formed an essential part of the NPA’s ongoing investigations into the company’s alleged offences. It will continue to do so as part of the agreement.

Pictured is Mr. Markus Bruegman. Bruegmann is accused 16 in a massive court case involving ABB and South Africa’s power utility, Eskom. Breugmann who was employed by ABB Group at the time, is said to be the person who first approached ex Eskom interim CEO, Matshela Koko, in 2013 with the purpose of establishing a corrupt relationship, according to the charge sheet. Image credit: Rock Tech Lithium

This settlement agreement was negotiated with partner countries, including the USA, Switzerland, Italy, and Germany. South Africa is getting the bulk of the settlement amount due to the nature of the crimes and the negative impact on South Africa and its people.

Pictured is former interim Eskom CEO, Mr Matshela Koko. Koko has been arrested along with his wife Mosima and his stepdaughter Koketso Choma on charges of fraud, corruption, and money laundering. Koko is accused of promising ABB R6.5bn in future contracts if it sub-contracted work on Kusile to Impulse International, a company partially owned by his stepdaughter. Image credit: Esa Alexander

The settlement has the immediate benefit of saving costs in the context of a protracted trial against the corporate entity (ABB Ltd), and securing funds upfront for the fiscus while ongoing criminal investigations into implicated persons continue.  The money, once paid into CARA, will be used as restitution for victims, and to assist in building South Africa’s capacity and resources in its ongoing fight against serious corruption.

Related news: Seven arrested with ex interim Eskom CEO, Matchela Koko, include his wife and step daughter

Author: Bryan Groenendaal


Leave A Reply

About Author

Green Building Africa promotes the need for net carbon zero buildings and cities in Africa. We are fiercely independent and encourage outlying thinkers to contribute to the #netcarbonzero movement. Climate change is upon us and now is the time to react in a more diverse and broader approach to sustainability in the built environment. We challenge architects, property developers, urban planners, renewable energy professionals and green building specialists. We also challenge the funding houses and regulators and the role they play in facilitating investment into green projects. Lastly, we explore and investigate new technology and real-time data to speed up the journey in realising a net carbon zero environment for our children.

Copyright Green Building Africa 2024.