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#101 nosh

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Posted 18 February 2019 - 03:27 PM

also the 3 year advance payment bit,,," Ref flag to corruption"...

 

 

could be corruption  or:

 

Most companies i know  in the it industry pay it in advance in order to knock the variable fx rates out of equation....

Ya but it doesn't explain why EOH charged 3 times the amount (had DoD gone direct to Microsoft) and under delivered 5000 licences - if the allegations are true


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#102 nosh

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Posted 18 February 2019 - 03:25 PM

This was the real interesting bit for me as when I began ready I was wondering why the whistle blower went to the SEC. If this is true, then Microsoft SA will also be in trouble.

Yip, both complicit according to the article . Whistle blower stands to gain 10-30% of penalty amount


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#103 Polly

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Posted 18 February 2019 - 03:15 PM

also the 3 year advance payment bit,,," Ref flag to corruption"...

 

 

could be corruption  or:

 

Most companies i know  in the it industry pay it in advance in order to knock the variable fx rates out of equation....


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#104 Shi

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Posted 18 February 2019 - 02:46 PM

 

The deal was flagged to a compliance officer in Microsoft South Africa, but no action was taken by the company against EOH. The whistle-blower suggested no action was taken because EOH was helping Microsoft at the time with a large, $50-million-plus contract with the South African Police Service, which was said to be the biggest-ever such contract for the software company’s local subsidiary.

 

This was the real interesting bit for me as when I began ready I was wondering why the whistle blower went to the SEC. If this is true, then Microsoft SA will also be in trouble.

 


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#105 Polly

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Posted 18 February 2019 - 02:31 PM

Can the share holders sue for their money back?

on what grounds?


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#106 Polly

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Posted 18 February 2019 - 02:27 PM

doubled up @ 16.00...average now R17.75......target reduced from 24/25 to 19 /20


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#107 Polly

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Posted 18 February 2019 - 02:25 PM

Microsoft terminated longstanding partner agreements with JSE-listed technology services group EOH after an anonymous whistle-blower filed a complaint about alleged malfeasance involving a South African department of defence software procurement deal with the US Securities & Exchange Commission (SEC).

TechCentral has seen correspondence that corroborates this and spoken to well-placed sources who say the whistle-blower lodged the complaint with the SEC at the end of November 2018 under the US’s tough anti-graft legislation, the Foreign Corrupt Practices Act.

At the same time, the whistle-blower, through a firm of attorneys, wrote to Seattle, Washington-headquartered Microsoft’s board of directors, asking it to investigate the matter and take appropriate action, the correspondence shows.

The allegations centre on a contract, worth R120-million, awarded by the department of defence in 2016 to EOH Mthombo

The allegations centre on a contract, worth R120-million, awarded by the department of defence in 2016 to the EOH subsidiary, EOH Mthombo.

Following receipt of the letter, a Microsoft board committee, acting promptly on the allegations, hired Seattle law firm Perkins Coei to probe the matter. TechCentral can reveal that the whistle-blower’s complaint and the subsequent investigation by Perkins Coei led to an instruction by Microsoft to its South African subsidiary to terminate its agreements with EOH.

A spokeswoman for Microsoft South Africa said on Monday that the company is legally precluded from commenting further on the matter. However, she emphasised that the decision to end the agreements with EOH was “not taken lightly”. She firmly denied that the recent resignation of Microsoft South Africa MD Zoaib Hoosen was in any way related to the EOH developments or the department of defence contract.

Took fright

TechCentral reported last Monday evening that Microsoft terminated its Licensing Solution Provider and Microsoft Partner Network agreements with EOH Mthombo, leading to a 34% intraday collapse in the IT services group’s share price on Tuesday as investors took fright amid a lack of reasons supplied by both parties for the decision.

EOH has not said why Microsoft terminated the relationship with EOH Mthombo, while the software giant declined to provide reasons when contacted last week, citing confidentiality.

However, TechCentral can now reveal for the first time that Microsoft took the unusual step after the whistle-blower reported allegations of corruption in the software supply agreement between EOH Mthombo and the department of defence. The whistle-blower claimed the government department overpaid Mthombo to the tune of millions of dollars for Microsoft software licences.

stephen-van-coller-2156-1120-3.jpg

EOH Holdings CEO Stephen van Coller

The whistle-blower alleged that Microsoft was “complicit” in allowing EOH Mthombo to engage in a “corrupt” licensing transaction with the department of defence (DoD). Among key allegations are that:

  • The DoD concluded the deal indirectly through EOH, whereas it is typical for South African government agencies to procure software licences directly from Microsoft.
  • Though EOH Mthombo offered little by way of value-added services, it received a US$5-million margin, where EOH received $8.4-million for the deal and Microsoft $3.4-million. “EOH essentially made this massive sum for doing paperwork as a middleman for the deal,” the whistle-blower said in the letter to Microsoft’s board. EOH allegedly made more in profit from the deal than Microsoft made in revenue. “At the risk of stating the obvious, this amount of margin on a straight licensing deal was not just a red flag for corruption, but was a cannonball shot across (Microsoft) compliance’s bow that was ignored.”
  • EOH should have received between 1% and 3% of the amount owing for the supply of the software licences, or between $80 000 and $240 000, for related “advisory services”.
  • EOH Mthombo provided about 5 000 licences less than promised – 15 000 versus the promised 20 000 – to the DoD;
  • The DoD agreed to pay the three-year licence renewal to EOH upfront – “a red flag for corruption”. A former senior DoD official, whose name is known to TechCentral, is accused by the whistle-blower of pushing this payment through ahead of his retirement in 2017. There is, however, no direct evidence yet implicating the official in a corrupt act, and TechCentral has decided not to publish his name at this juncture.
  • The deal was flagged to a compliance officer in Microsoft South Africa, but no action was taken by the company against EOH. The whistle-blower suggested no action was taken because EOH was helping Microsoft at the time with a large, $50-million-plus contract with the South African Police Service, which was said to be the biggest-ever such contract for the software company’s local subsidiary.

Asked to comment on the allegations, EOH Holdings CEO Stephen van Coller said via a text message on Monday that he could confirm that EOH hired law firm ENSafrica last week to start reviewing all licensing contracts in the past five years with all public-sector entities.

“ENS was instructed to start with the Microsoft licensing contracts,” Van Coller said. “ENS is continuing with this review and giving us regular updates.”

The allegations, and a possible SEC probe, are potentially very serious for Microsoft. Approached for comment, specialist US attorneys Andy Rickman and Chris Connors told TechCentral that US-traded companies may face “significant penalties” — in some cases up to hundreds of millions of dollars — for violating the US Foreign Corrupt Practices Act.

US-traded companies may face significant penalties … for violating the US Foreign Corrupt Practices Act

“Whistle-blowers who report corruption relating to technology companies may receive 10-30% of the entire penalty levied upon the company by the US government, resulting in multimillion-dollar rewards,” they said in e-mailed comments. Rickman and Connors specialise in getting rewards for whistle-blowers who report corruption under a piece of legislation known as the Dodd-Frank Wall Street Reform and Consumer Protection Act.

On Friday, EOH “proactively initiated” an internal investigation into EOH Mthombo’s channel partner business unit.

In a detailed statement to shareholders, issued through the JSE’s stock exchange news service, EOH said it was working with Microsoft “to better understand the concerns and rationale for the action”.

‘Fruitful meeting’

“Following a recent fruitful meeting between EOH and Microsoft leadership, Microsoft has advised that it is taking the EOH proposals under consideration and further review,” EOH said.

It said EOH was “committed to ensuring ethical leadership throughout the group”.

Among other initiatives, it has retained the services of ENSafrica to “perform an independent, ongoing risk-based monitoring and oversight role in all the group’s major public-sector bids, contracts and engagements”. The law firm is also “overseeing EOH’s review of all material current public-sector contracts to ensure that governance relating to these contracts were adhered to”.

ENSafrica was also part of a “broadened review of large public-sector licensing agreements”, EOH said.

The group said it was “committed to zero tolerance to any impropriety and upholds the highest levels of governance and ethical conduct”.  — © 2019 NewsCentral Media


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#108 Shi

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Posted 18 February 2019 - 12:52 PM

 

"Microsoft has still not officially provided us any confirmation for the reasons for the notice" on 2019/02/18
versus:
"fruitful meeting between the EOH and Microsoft leadership" on 2019/02/15

 

 

Essentially the same thing


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“One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? she asked. Where do you want to go? was his response. I don't know, Alice answered. Then, said the cat, it doesn't matter.” - Lewis Carroll

#109 Tom

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Posted 18 February 2019 - 12:50 PM

"Microsoft has still not officially provided us any confirmation for the reasons for the notice" on 2019/02/18
versus:
"fruitful meeting between the EOH and Microsoft leadership" on 2019/02/15
 

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#110 Tom

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Posted 18 February 2019 - 12:45 PM

Can the share holders sue for their money back?


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#111 nosh

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Posted 18 February 2019 - 12:41 PM

Further Developments Related to Microsoft Contracts

EOH HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/014669/06)
Share code: EOH ISIN: ZAE000071072
(?EOH?)


FURTHER DEVELOPMENTS RELATED TO MICROSOFT CONTRACTS


There have been further developments in the media following our stakeholder communication issued on SENS
on the 15 February 2019 and as previously advised EOH focused ENS to look at all large historical licensing
contracts in the public sector vertical. Microsoft has still not officially provided us any confirmation for the
reasons for the notice. This matter is now sub judice. ENS continue to give us regular updates and we are
committed to swift and appropriate action.

Stephen van Coller reiterated ?I again encourage anyone who has evidence to please come forward so we
can root out any historical, unethical business practices both within EOH and the broader country. As part of
our current processes, ENS reviews about 8-10 bids per week?.

Shareholders will be advised of any further developments.


Johannesburg
18 February 2019

still not saying much . surely EOH can be held liable for not providing this mornings bombshell in last weeks SENS announcement?


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#112 Tom

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Posted 18 February 2019 - 12:38 PM

So what was the last SENS on 2019/02/15 about?


Edited by Tom, 18 February 2019 - 12:39 PM.

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#113 leo

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Posted 18 February 2019 - 12:36 PM

Made some lucky money. But I'm too scared
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#114 LiveInExcess

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Posted 18 February 2019 - 12:12 PM

Wow! Brave souls looking for a bounce....... This one is going to hurt.


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#115 Lionelza1

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Posted 18 February 2019 - 12:05 PM

What is happening here? Damn big down
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#116 Lionelza1

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Posted 18 February 2019 - 11:57 AM

Hahaha
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#117 DayTraderDad

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Posted 18 February 2019 - 11:57 AM

joker down 20% i see...eish

Haha this one will defiantly go to ZERO!!!


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#118 Lionelza1

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Posted 18 February 2019 - 11:57 AM

Eina!
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#119 Polly

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Posted 18 February 2019 - 11:51 AM

joker down 20% i see...eish


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#120 leo

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Posted 18 February 2019 - 11:50 AM

Getting hammered

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