ABB settles for R2.5 billion in South Africa corruption case

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ABB settles for R2.5 billion in South Africa corruption case
Credit: © Reuters.

SOUTH AFRICA - In a significant development in the ongoing corruption investigations surrounding South Africa's Kusile power station, engineering giant ABB (ST: ABB ) has agreed to pay over R2.5 billion in punitive reparations into the country's Criminal Asset Recovery Account. This settlement comes after the company admitted to inflating costs for an instrumentation system at the power station.

Today, the National Prosecuting Authority (NPA) and the Investigating Directorate (ID) found themselves under scrutiny from former Eskom executive Matshela Koko, who approached the Public Protector with grievances. Koko criticized the NPA for bypassing judicial oversight by allowing ABB to admit guilt and resolve fines without a court-sanctioned admission of guilt, which he argues contravenes Section 64(e) of the Prevention of Organised Crime Act (POCA). According to Koko, this section is intended to ease the burden on the criminal justice system by recording admissions of guilt for minor offenses without court proceedings, but it requires court sanctions for serious offenses that lead to criminal records.

The controversy stems from ABB's R2.2 billion contract with Eskom, which was allegedly secured through corrupt practices involving Koko. Despite ABB's settlement, the NPA has indicated that it could still pursue legal action against ABB South Africa as a corporate entity if the terms of the settlement are not honored. This warning was initially issued back in December 2022.

The payment by ABB marks a substantial recovery for South Africa's efforts to address corruption within its borders. However, Koko's challenge highlights ongoing concerns about due process and the proper application of legal frameworks in high-profile corruption cases.

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