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ABB expects 'unfavorable outcome' from Eskom corruption probes


According to Market Intelligence, December 2022


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ABB expects 'unfavorable outcome' from Eskom corruption probes

Swiss industrial engineering company ABB Ltd. warned that it could face sanctions from U.S. and South African authorities over its dealings with Eskom Holdings SOC Ltd.

ABB said an internal investigation found potential suspect payments and other compliance concerns linked to some of its dealings with the South African utility company and added that it "self-reported" the findings to the U.S. Securities and Exchange Commission and the Department of Justice, as well as to various authorities in South Africa and other countries.

The company said it is fully cooperating with authorities who intend to or are already investigating the issue, while warning that there may be "an unfavorable outcome" from the probes. It added that it was currently unable to determine the possible financial impact of the regulatory matter.

In 2015, ABB secured a $160 million control and instrumentation contract from Eskom for its Kusile power plant project, Bloomberg News said in a report. Allegations of corruption involving Eskom executives guaranteeing future contracts in exchange for a favorable sub-contracting arrangement have led to inquiries from U.S. and South African investigators.

ABB disclosed the matter as it reported third-quarter attributable net income of US$515 million, down from US$603 million in the same period a year ago.