EOH rallies after saying it’s been cleared of wrongdoing


EOH rallies after saying it’s been cleared of wrongdoing

Published Date: 2017-10-26 | Source: Stephen Gunnion | Author: Stephen Gunnion

EOH rallies after saying it’s been cleared of wrongdoing

Yesterday's rally helped reverse a 40% slide in its share price this year

Shares in EOH rallied as much as 7.7% yesterday after it said investigative journalism unit amaBhungane had found no evidence of any wrongdoing on its part around its dealings with the SA Social Security Agency, SASSA.

Until yesterday, shares in the technology services company had toppled 40% year to date, in part due to negative publicity after an April article by amaBhungane alleged that the company had been involved in corruption linked to SASSA and after CEO and founder Asher Bohbot resigned unexpectedly. A subsequent article by Business Report repeated the allegations, leading to a further slide in the company's share price. EOH said the Business Report article was a regurgitation of amaBhungane's investigation with no new information and had failed to take into account EOH's repudiation of the original article. At the time, EOH said it had been a service provider to SASSA for eight years and all services were awarded on merit, after having undergone open and transparent tender processes, in compliance with the Public Finance Management Act.

Related article: EOH shares flip-flop on full-year results

In a statement on its website yesterday, EOH said it had engaged in a series of extensive interactions with amaBhungane. It said the process involved a detailed inquiry, lasting over six months with EOH responding to all questions put forward by amaBhungane and also making available various relevant supporting documentation. It said amaBhungane had subsequently confirmed that it found no evidence of any wrongdoing on the part of EOH.

Its shares retraced some of their gains to end 3.6% higher at R99.96.

Similar Stories