Trillian Management Consulting and its sole director, Eric Wood, say Eskom's efforts to liquidate the firm to recoup nearly R600-million are "frivolous", "vexatious", and not urgent, in light of the company's financial woes and a pending appeal.

Wood will on Wednesday argue that Eskom cannot ask a court to hold him in contempt of court and fine him R1-million, or sentence him to 30 days in jail, because Eskom cannot launch contempt proceedings following a "money judgment". 

The dispute arises from a contract between consultancy firm McKinsey and Eskom, where McKinsey was supposed to develop a turnaround plan for the embattled state-owned power utility. Trillian was appointed as a subcontractor to McKinsey, allegedly without a valid contract in place, and paid nearly R600-million for its work. But Eskom says Trillian never completed any billable work.

Trillian was also tainted by State capture allegations via its links to Salim Essa, a known associate of the Gupta brothers, who worked for the firm.

Pay back the money

McKinsey settled with Eskom in July 2018, agreeing to pay back nearly R1-billion and admitting it overcharged the parastatal. Eskom went to court in June 2019 in an effort to get Trillian to pay back the money. That order was granted in October, when the Pretoria High Court dismissed Trillian's appeal. 

But Trillian did not pay back the money, and Eskom again approached the Pretoria High Court on an urgent basis in January. The power utility now wants Trillian to be liquidated so it can recoup the funds. It also wants Wood held personally liable for Trillian’s failure to comply with the order, and either be jailed for 30 days or fined R1-million. 

In court papers, Eskom CEO Andre de Ruyter says Trillian, through Wood, must be held accountable “for its blatant and contemptuous failure to comply with… the order.”

Arguments will be heard on Wednesday. 

Trillian and Wood will also bring a counter-application on Wednesday, requesting that, in the event that the court finds that the October order means Trillian can be liquidated, it be stayed pending an appeal to the Supreme Court of Appeal (SCA).

Urgency

Trillian and Wood were denied leave to appeal the October order by the high court last year. Wood also reveals in court papers that he applied to the SCA to appeal the October “money judgment” in December 2019, and that a decision by the SCA is “imminent”.

Wood and Trillian say in court papers that there is no urgency in the current matter, as Eskom waited four months since the October order to approach the court for relief.

Eskom’s wishes cannot be granted while that SCA decision is outstanding, says Wood, and there is no reason why Eskom cannot wait for that matter to be resolved.

Eskom, meanwhile, will argue that the October order still stands even if Wood and Trillian attempted to appeal it at a later stage.

But Wood says that Eskom hasn’t shown why it cannot wait for the outcome of the application for leave to appeal before the SCA.

Broke

In any event, Wood says, Trillian maintains that it does not have the money to pay back Eskom. Trillian has always said that it cannot pay the power utility as per the money judgment, Wood says, and so it would be pointless to try to force it to do so now because its financial position has not changed.

In Eskom’s court papers, de Ruyter notes that Trillian is dormant, it stopped trading in 2017, and there is no prospect of it doing business in the future. Eskom says the only way it can recoup the monies owed to it is to have Trillian liquidated.

But Trillian points the court to the SCA appeal again, saying it would be unfair to liquidate the firm with the appeal still pending.

Frivolous and vexatious

Wood and Trillian cannot be held in contempt of court, Wood argues, because a money judgment is not susceptible to contempt proceedings.

“Indeed this relief and the liquidation relief are so far off the mark that the application can be characterized as frivolous and vexatious,” he argues.

But if Eskom is right, Wood says, and the advice he and Trillian have received is wrong, the fact that they have not complied with the orders is not because of any “willful or contemptuous conduct”.

Wood says he has acted in good faith throughout the matter.