IT group EOH sued for R136 million by liquidators of former subsidiary

EOH head Stephen van Coller.

EOH head Stephen van Coller. LERATO MADUNA

  • IT group EOH is being sued for R136 million by the liquidators appointed to settle the claims of one of its former subsidiaries.  
  • The liquidators say that EOH companies colluded to keep funds out of the hands of creditors.
  • EOH has “vehemently” denied it did anything wrong, saying all transactions were legitimate.

IT group EOH is being sued by the liquidators of one of its former subsidiaries, who allege it defrauded its creditors of over R136 million.

The joint liquidators for Mehleketo Resourcing, Cloete Murray and Ralph Luchtman, lodged the civil claim in the Johannesburg High Court last month.

In court papers, they argue they are owed R136 million by various companies in the EOH stable.

Mehleketo Resourcing was placed into liquidation in November 2019. According to Murray and Luchtman, some companies in the EOH stable entered into a “collusive scheme” shortly before Mehleketo was liquidated to release them from their indebtedness.

They claim that EOH companies shuffled money between companies so that four companies in the EOH stable – EOH Consulting, EOH Mthombo, EOH Microsoft and 2Identify, would not be liable as debtors once Mehleketo was wound up.

EOH, which is opposing the application, has denied any liability for the claims in the summons.

“EOH is confident of its ability to defend the claims contained in the summons, and in the merits of its defence,” it said on Friday. “EOH vehemently denies all averments alluding to a collusive scheme. EOH, at all times, acted on expert advice and in accordance with ethical business practises.”

The IT group, which was rocked by a corruption scandal in 2019, said that the transactions were legitimate.

“[The] transactions that form the subject matter of the summons, were undertaken, at all times in compliance with both expert legal and financial advice and in accordance with internationally accepted accounting practices and ethical practices.”

As Fin24 previously reported EOH’s past deals with state departments featured prominently during State Capture Inquiry hearings.

In its final report, the inquiry praised EOH for cooperating with the commission and taking proactive measures to remedy past acts of corruption.

“There is no other company that has been of greater assistance to the commission in relation to investigations of historical wrongdoing within its ranks,” the report read.

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