Flash Briefing: SA engineers tell Cubans ‘we don’t need you’; Eskom fraud; Steinhoff Poland IPO; Bitcoin

Written on 04/25/2021
Jackie Cameron

  • South African prosecutors said they are seeking the extradition of a British national who’s been implicated in a fraudulent deal with the state power company, reports Bloomberg. Michael Lomas appeared in the Westminster Magistrates Court on Thursday, was granted bail of 100,000 pounds ($138,880) and submitted additional surety of 250,000 pounds, the National Prosecuting Authority’s investigating directorate said in an emailed statement. He’s due to return to court on May 20. Lomas’s arrest and court appearance emanated from months of talks with the UK authorities about a fraud and corruption case relating to Eskom Holdings SOC Ltd.’s payment of R745 million ($52 million) to Tubular Construction Projects, which worked on its new Kusile power plant, according to the directorate. An escalation clause in the contract exposed the utility to a R1.4 billion liability, it said. Lomas has been indicted together with four suspects, including two former Eskom executives, who were arrested in December 2019 and are next due to appear in court on June 1. The UK courts will decide whether Lomas has a case to answer in South Africa.
  • The government awarded tenders to the state-backed Biologicals Vaccines Institute of Southern Africa Ltd. and Imperial Logistics Ltd. to import an unspecified quantity of doses, the Department of Health said in a document on its website. DSV Healthcare Ltd. was contracted to store and distribute the doses countrywide, says Bloomberg. On April 26, Biovac will handle delivery of South Africa’s first batch of one million Johnson & Johnson shots being produced locally by Aspen Pharmacare Holdings Ltd., Chief Executive Officer Morena Makhoana said by phone. In addition, the organization will also manage imports from Pfizer Inc., Makhoana said. The quantities that Biovac and Imperial will import will be announced by the Department of Health, he said. The government ordered 30 million of the two-dose vaccine developed by Pfizer and BioNTech SE, which in addition to the J&J shots should be sufficient to inoculate more than two thirds of the nation’s 60 million population to achieve herd immunity.
  • Steinhoff’s discount retailer Pepco Group said on Friday it would open its first Pepco branded store in Spain this month and 10 more by September, stepping up its expansion ahead of an expected initial public offering (IPO) this year, says Bloomberg. The group, which also trades as Poundland in the United Kingdom and Dealz in Europe, is part of South African conglomerate Steinhoff, which is still battling the fallout of a 2017 accounting scandal. Steinhoff said on Monday it had decided to seek necessary consent from its financial creditors for a listing of Pepco Group. That decision came in the wake of reports last week that Pepco would list its shares in Warsaw rather than London, in what could become Poland’s biggest IPO this year. With its entry into Spain Pepco will trade from 2,200 stores in 14 countries, with the overall group, including the Poundland and Dealz brands, trading in 16 countries across Europe and more than 3,200 stores in total.
  • In other Steinhoff news, an ex-Deloitte LLP partner is facing disciplinary action in the Netherlands for an improper audit of Steinhoff International Holdings NV prior to the South African retailer’s near-collapse more than three years ago, says Bloomberg. The Dutch Authority for the Financial Markets accuses Patrick Seinstra of failing “to obtain sufficient and appropriate audit evidence from the annual accounts,” according to papers from the hearing. Deloitte refused to sign off on Steinhoff’s accounts in late 2017, leading to the resignation of then Chief Executive Officer Markus Jooste and a share price slump. The firm had been auditing Steinhoff for years, initially in South Africa and then from Europe after the company moved its primary listing to Germany. In the probe that followed the scandal, PwC uncovered €6.5bn ($7.8bn) of irregular transactions between Steinhoff and eight firms between 2009 and 2017.
  • Bitcoin headed for its worst week in more than a year as a proposed capital-gains tax increase for wealthy Americans intensified the volatility whiplashing the world’s largest cryptocurrency, says Bloomberg. A fresh bout of selling on Friday drove Bitcoin down as much as 7.9% to about $47,525 as it continued to take out key technical levels. Wall Street analysts warn of further losses for the notoriously volatile currency that hit a record high of $64,870 on April 14 ahead of Coinbase Global’s listing, before succumbing to an unexplained weekend swoon. This week’s 22% rout marks the worst period for Bitcoin since March 2020. Even digital currencies that have managed to eke out gains over the past few days, like Ether and the satirical Dogecoin, tumbled on Friday as the crypto space turned into a sea of red. For more on whether you should be investing in cryptocurrencies, the risks, rewards and pitfalls, visit the BizNews Youtube channel to watch the latest BizNews Finance Friday webinar.
  • Labour union Solidarity has sent a list of more than 120 “competent and willing” engineers to Lindiwe Sisulu, Minister of Human Settlements, Water and Sanitation who can easily replace the 24 Cuban engineers who will cost millions, reports MyBroadband.co.za. This comes after Minister Sisulu welcomed the arrival of 24 Cuban engineers in South Africa earlier this week who have been brought to the country to address the ongoing water crisis. The use of these engineers forms part of a 2014 bilateral agreement between South Africa and Cuba on co-operation in water resource management and water supply. “The highly qualified Cuban specialists will assist as advisors at provincial and local levels across the country, sharing their vast skills in the areas of mechanical, electrical and civil engineering, as well as project management,” the Department stated. The announcement was met with backlash from political parties like Herman Mashaba’s ActionSA, who claimed that locally trained and unemployed engineers were being ignored.

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