A company founded by politically-connected billionaire businessman Vivian Reddy has been accused of defrauding the government of more than R40m through bribery, corruption and the payment of kickbacks.

A News24 reports says it is alleged that Edison Power Gauteng pocketed R40m after colluding with a consulting engineer to inflate the cost of electrical work during the construction of the Mpumalanga High Court (Mbombela).

In 2013, Group Five subcontracted the company to install electrical work, including high-voltage distribution, lighting, standby power, fire systems, access controls and CCTV.

Reddy, a personal friend of former President Jacob Zuma, said the allegations were made in October last year. He denied personal involvement. He said he was just a shareholder and neither a director, nor involved in Edison Power's day-to-day operations. Records show that he stepped down as a director in March last year.

Details of the allegations are contained in an affidavit by Verlan Moodley, a former Edison Power Gauteng contracts manager who has become a state witness.

It is alleged that Group Five pocketed R950m for the project, which was initially estimated to cost R613m. The company finished construction in 2019, four years later than the original completion date. Edison, contracted at R50.7m, eventually pocketed R92.8m.

‘I should mention that Edison was paid an amount in excess of R108m on the Mbombela High Court project. However, the value of the project cannot be much more than R70m. These are approximate figures, but I think it would be fair to say that Edison was overpaid an amount of R40m, give or take one or two million rand.’

Moodley's affidavit is recorded in detail in the report online.

Full News24 report