McKinsey, Trillian were to grab R10bn from Eskom
The commission of inquiry into state capture has heard that Global consulting company McKinsey & Company, alongside Trillian Capital, wanted to swindle R10 billion from Eskom. Trillian’s former CEO of Trillian Management Consulting, a subsidiary of the company, Bianca Goodson appeared before the commission on Thursday.
Goodson told the commission McKinsey and Trillian projected they would make R10 billion for their work at Eskom, even though Eskom could do the work in-house. Trillian was three months old at the time and Goodson was the only employee in its subsidiary.
“I thought it was ridiculous, when I put my Trillian hat on and forgot about McKinsey, because it was a global company. It did not make sense how Trillian could make R5 billion in three years when it was just three months old and did not have the requisite experience.”
“For consulting, this was shocking, to say the least,” Goodson testified at the State Capture Commission on Thursday.
“As a start-up company, Trillian making this kind of money over three years was bewildering.”
Goodson said working with McKinsey, which had included Trillian in its contract with Eskom to turn the company around and stop load shedding, was difficult.
She said McKinsey did not involve Trillian much in decision-making and shot down all her suggestions, including when she questioned how the company would turn Eskom around if they did not have the correct skills and people on the ground.
“I escalated this to Mr Salim Essa (Trillian’s major shareholder) and in a meeting, he said if McKinsey doesn’t play the ball they would replace them because he still wanted his R5 million,” added Goodson. She also added that this was during the tenure of former president Jacob Zuma.
She said in several meetings with the McKinsey team she was told not to worry about all the issues she was raising because she would still get paid.
Trillian and McKinsey were eventually paid R1.6 billion, McKinsey has repaid R1 billion and Eskom is still trying to get the R600 million owed by Trillian.
A court has ordered Trillian to repay its share. Eskom has sought to have Trillian liquidated to recover the funds.
Two E-Gateway employees from India and the United Arab Emirates came to work on the project and TMC agreed to pay the company a “ludicrous” 70% of revenue from its power generation workstream, said Goodson.
“For me, that was an exorbitant amount of money for two people. It meant that their charge-out rate per hour was something close to like, I don’t know, half-a-million per hour considering how many hours they worked,” she testified.