October 10, 2017 / 10:32 AM / a year ago

UPDATE 1-McKinsey calls for court to decide if $117 million S.African deal illegal

(Adds quotes, Eskom response, details)

JOHANNESBURG, Oct 10 (Reuters) - McKinsey called for a South African high court to rule if a 1.6 billion rand ($117 million) contract with state utility Eskom was illegal, and agreed to repay its fees if the deal was found to be unlawful, the global consultancy said on Tuesday.

Eskom had given McKinsey and its local partner Trillian, another consultancy, until Tuesday to repay the fees earned for a ‘turnaround programme’ conducted between January-July 2016 that the utility says was illegal.

McKinsey said it would repay the money but only if a court found the contract was unlawful.

“We will support a review by the High Court of the validity of the turnaround programme contract. We invite Eskom and Trillian to submit themselves to this process too,” McKinsey said in a statement.

“McKinsey will pay back the fee in full if the Court determines Eskom acted unlawfully,” adding that it was solely Eskom’s responsibility to ensure the contract met regulations.

An Eskom spokesman said the utility’s legal representatives were dealing with the matter directly with McKinsey and they could not make any further comment.

Trillian did not immediately respond to a request for comment.

Trillian was until recently controlled by the Gupta family, friends of President Jacob Zuma who are accused of inappropriately influencing the issuing of state contracts. ($1 = 13.6881 rand) ($1 = 13.6935 rand) (Reporting by Joe Brock, editing by Louise Heavens and Giles Elgood)

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