Johannesburg - Top law firm Edward Nathan Sonnenbergs (ENS) has denied it advised EOH to round-trip R140 million.
EOH finds itself in the middle of a Hawks probe into the interaction between EOH and its subsidiary, Mehleketo, in the days prior to ENS launching liquidation proceedings against Mehleketo.
In November last year, The Star broke the story of EOH’s suspicious conduct. In the week before, ENS, which advised EOH, applied for the liquidation of Mehleketo, EOH paid R140m to Mehleketo, and Mehleketo paid the money back immediately.
When Stephen van Coller, CEO of EOH, was asked about this, he said it was a balance sheet consolidation of intercompany loans, and that the series of transfers were proceeded with after receiving legal advice from EOH’s lawyers, ENSAfrica.
Van Coller also said that “EOH and its subsidiaries’ conduct was at all times informed by both expert legal advice and in accordance with internationally accepted accounting practices”.
Since Van Coller took the helm, EOH has paid ENS R200m in fees. Paul Winer, an ENS partner, told The Star that “ENS provided EOH with preliminary and principled advice and support on the liquidation of Mehleketo”, but denied ENS was aware of, or advised EOH about the R140m that flowed from EOH to Mehleketo and back to EOH between November 13 and 15, 2019, less than a week before the liquidation.
The Star previously reported that the Hawks had engaged the chairperson of EOH, Andrew Mthembu, to assist them in criminal investigations relating to the flow of the R140m.
A whistle-blower inside EOH informed The Star that EOH had briefed ENSAfrica to represent them.
“We were surprised that ENS agreed to represent EOH in the criminal investigation. It’s their advice that is the subject of the Hawks investigation. The panic inside EOH is whether our auditors are going to be approached by the Hawks for co-operation in the investigation.”
The Star has confirmed that the Hawks intend approaching ENS and the auditors PWC for an explanation on the flow of the R140m.
Although EOH called it a balance sheet clean-up, Johannesburg attorney Ian Small-Smith has pointed out previously that his concern about EOH’s version is that in their March 2020 financials they reported the receipt of the funds as income on the disposal of a subsidiary.
The Star