EXCLUSIVE: Edison Power goes after its senior executives for fraud
Edison Power Group, one of South Africa’s largest electrical companies of which well-known Durban businessman Vivian Reddy is a shareholder, was allegedly defrauded for over R150m by some of the organisation's top brass. Picture: Nqobile Mbonambi/African News Agency(ANA)
By Ayanda Mdluli
Jul 9, 2021
Durban - Edison Power Group, one of South Africa’s largest electrical companies of which well known Durban businessman Vivian Reddy is a shareholder, was allegedly defrauded for over R150 million by some of the organisation's top brass.
An investigation by the Daily News has established that the company had opened charges of fraud, corruption and embezzlement against key senior employees and an executive director whose names are known to the publication.
Information obtained by the newspaper suggests that the investigation commenced after a whistle-blower had sent information to Edison power shareholders back in 2019.
The Daily News has been able to establish that the year and a half long forensic investigation has since been handed over to the Hawks Serious Commercial Crimes Unit in Germiston, Johannesburg.
In a response to questions, the Hawks said cases of fraud were opened and registered for further investigation by the Serious Commercial Crimes Unit.
Captain Ndivhuwo Mulamu, the communications officer of the Hawks, said investigations were at an advanced stage.
"Once completed, the dockets will be transferred to NPA for a decision," she said.
Edison Power Group has been involved in several prominent projects in and around Gauteng, which included the FNB Stadium, OR Tambo International Airport, Monte Casino, Sun City, Mpumalanga High Court, Sandton City and the Sandton Convention Centre.
Responding to questions from the Daily News, the company's non-executive director Ethen Singh confirmed the matter and revealed that he was overseeing the recovery of the assets.
He further confirmed that the group estimates that over R150m could have been siphoned out of the company.
"However, that could increase substantially as the investigation progresses. The modus operandi of the senior management fingered involves collusion with suppliers, sub-contractors and payment to ghost service providers and ghost suppliers of materials. It included ghost workers and overpayment of bonuses, and illegal increases were granted," he said.
He further explained that some members of management created their own sub-contracting companies and awarded contracts to themselves.
"Our investigations discovered that homes in exclusive estates were paid for by company funds for a staffer. Another employee bought a restaurant in an upmarket area with the proceeds of crime. Even school fees were paid illegally, via the company," he said.
He further revealed how the lifestyle audits of some employees showed them living well beyond their means, and in some cases, owning multiple properties.
"Arrests are expected to be made soon," he said.
When approached for comment, Reddy expressed his great disappointment that persons that were employed in positions of trust defrauded the business by abusing their senior positions of influence .
“I hope that justice will prevail and those found guilty will face the wrath of the law.”
He stated that shareholders invested in companies and were trusted by the CEO, Board and executive management to protect the investment and to ensure that shareholders get value, but in this case, they worked for their own value via alleged fraudulent activities.
"Given the great negative, devastating impact on businesses caused by the pandemic, acts of fraud worsens the situation and could cause businesses to collapse," he added.
Daily News
By Ayanda Mdluli
Jul 9, 2021Durban - Edison Power Group, one of South Africa’s largest electrical companies of which well known Durban businessman Vivian Reddy is a shareholder, was allegedly defrauded for over R150 million by some of the organisation's top brass.
An investigation by the Daily News has established that the company had opened charges of fraud, corruption and embezzlement against key senior employees and an executive director whose names are known to the publication.
Information obtained by the newspaper suggests that the investigation commenced after a whistle-blower had sent information to Edison power shareholders back in 2019.
The Daily News has been able to establish that the year and a half long forensic investigation has since been handed over to the Hawks Serious Commercial Crimes Unit in Germiston, Johannesburg.
In a response to questions, the Hawks said cases of fraud were opened and registered for further investigation by the Serious Commercial Crimes Unit.
Captain Ndivhuwo Mulamu, the communications officer of the Hawks, said investigations were at an advanced stage.
"Once completed, the dockets will be transferred to NPA for a decision," she said.
Edison Power Group has been involved in several prominent projects in and around Gauteng, which included the FNB Stadium, OR Tambo International Airport, Monte Casino, Sun City, Mpumalanga High Court, Sandton City and the Sandton Convention Centre.
Responding to questions from the Daily News, the company's non-executive director Ethen Singh confirmed the matter and revealed that he was overseeing the recovery of the assets.
He further confirmed that the group estimates that over R150m could have been siphoned out of the company.
"However, that could increase substantially as the investigation progresses. The modus operandi of the senior management fingered involves collusion with suppliers, sub-contractors and payment to ghost service providers and ghost suppliers of materials. It included ghost workers and overpayment of bonuses, and illegal increases were granted," he said.
He further explained that some members of management created their own sub-contracting companies and awarded contracts to themselves.
"Our investigations discovered that homes in exclusive estates were paid for by company funds for a staffer. Another employee bought a restaurant in an upmarket area with the proceeds of crime. Even school fees were paid illegally, via the company," he said.
He further revealed how the lifestyle audits of some employees showed them living well beyond their means, and in some cases, owning multiple properties.
"Arrests are expected to be made soon," he said.
When approached for comment, Reddy expressed his great disappointment that persons that were employed in positions of trust defrauded the business by abusing their senior positions of influence .
“I hope that justice will prevail and those found guilty will face the wrath of the law.”
He stated that shareholders invested in companies and were trusted by the CEO, Board and executive management to protect the investment and to ensure that shareholders get value, but in this case, they worked for their own value via alleged fraudulent activities.
"Given the great negative, devastating impact on businesses caused by the pandemic, acts of fraud worsens the situation and could cause businesses to collapse," he added.
Daily News
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