14 June 2024 | 01:43 AM

The Trillian playbook: How Oliver Wyman nearly got ensnared

Key Takeaways

International consulting firm Oliver Wyman believes this is a non-story. Yes, they explored a partnership with Trillian, now notorious for its Gupta links, but it never resulted in a contract being signed or money flowing. End of story. We don’t believe it’s that simple. The two-month flirtation between Oliver Wyman and Trillian shows how political connections are prized assets to ‘open the taps’ on lucrative consulting contracts with the state and this was a game Oliver Wyman was willing to play.

Dubai in December 2015 was a hive of activity.

As the Guptas hosted ministers, officials and influencers at the luxury Oberoi hotel, their closest business partner Salim Essa started pitching his new consulting business Trillian to international firms that are headquartered in the desert metropolis.

That some of the officials paying their respects to the Guptas would later be targeted for lucrative consulting contracts by Trillian and its partners was a merely a coincidence according to minister Des van Rooyen who was one such visitor.

Oliver Wyman is a $1.8-billion-a-year consulting firm with offices in more than 60 countries, including in Dubai. According to Oliver Wyman, two of their senior partners were introduced to Essa in Dubai by one of his business associates Hamza Farooqui.

Farooqui has since emerged as a player in team-Gupta, partnering with Essa in the failed bid to buy Habib bank. According to the #Guptaleaks he was also set to be used as the vehicle for a Bell Pottinger project, later aborted, to smear former deputy finance minister Mcebisi Jonas.

Oliver Wyman was not to know that, but other red flags were obvious.

The Red Flags

Trillian was still being set up and had almost no staff, but Essa came with powerful political connections: as a shareholder in numerous Gupta companies he counted the Gupta brothers and the president’s son Duduzane Zuma as his closest allies.

According to someone briefed about the Dubai introduction, Essa openly boasted to Oliver Wyman about how politically connected Trillian was.

The company took the bait.

In January, three partners from Oliver Wyman flew out to South Africa for a series of meetings with key decision-makers at Eskom, Transnet and the department of co-operative governance and traditional affairs (Cogta) – all organised of course by Trillian who, according to at least one official, presented themselves as Oliver Wyman’s black empowerment partner.

Four-day finance minister Des van Rooyen was shifted to the Cogta ministry in December 2015. File Photo: GCIS

By that time the four-day finance minister Des van Rooyen had been abruptly shifted to the Cogta ministry, along with “advisor” Mohammed Bobat, who was parachuted in from Regiments Capital – yet there is evidence that he was still taking direction from his former boss, Eric Wood, who had now become the chief executive of Trillian.

Whistleblower Bianca Goodson, the short-lived chief executive of Trillian’s management consulting division, had an inside view. Her whistleblower statement is revealing.

“In the first week of January 2016, I received a call… saying that we will be working at Cogta and supporting Bobat.

“I found the instruction strange as Trillian Management Consulting (TMC) at that point in time, only had two full time employees…”

“On 11 January 2016, Wood invited my COO and me to attend a dinner with Garry Pita [the chief financial officer at Transnet], Hamza Farooqui and two directors from Oliver Wyman Dubai to discuss potential work for Oliver Wyman with [Trillian] as the supplier development partner at Transnet.”

Trillian had also been able to set up meetings for the Oliver Wyman partners with Anoj Singh, the Eskom chief financial officer, and with minister Van Rooyen himself.

Goodson says she was instructed to prepare a presentation on the newly-formed Trillian for the meeting with Van Rooyen.

“I was instructed to present capabilities for an organisation [i.e. Trillian] that had no prior history and for work not yet identified as a need. Regardless, the minister appeared satisfied with our presentation… The [Oliver Wyman] directors were most impressed at [Trillian’s] ability to secure work.”

Anoj Singh (File Photo, EWN)

Cogta and Transnet confirmed that the meetings with Oliver Wyman and Trillian took place but stressed that this was standard practice and by no means meant that Oliver Wyman or Trillian was guaranteed a contract.

The gate-keepers

Trillian made it clear to Oliver Wyman that it was the gate-keeper, despite having little infrastructure and no official mandate from any of the state-owned entities it claimed to represent.

In a 15 January 2016 email to the Oliver Wyman partners shortly after their return to Dubai Goodson wrote: “Similarly to how we conducted the introduction meetings with Cogta, Transnet and Eskom, Trillian will lead the communications with their clients, as the mandate resides with us… Trillian’s relationship with our clients is such that I manage our clients directly and in turn, will work with our partners (Oliver Wyman) to identify and hopefully, realize potential opportunities.”

Trillian denies this characterisation, saying: “Trillian has never held itself out to be a gatekeeper of any institutions.”

The Oliver Wyman partners agreed to work through Trillian and shortly afterwards sent a detailed proposal, outlining a massive two-year project for Cogta to turn around South Africa’s 266 municipalities.

As the partners emphasised in a 16 January email: “The Minister is recently appointed, needs to make his mark, is in a hurry and on top of this municipal elections are coming up. There is no better time to put a consulting proposition in front of him.”

The initial proposal was for a five-week diagnostic review of Cogta’s Back2Basics programme for municipalities. The consultants’ proposed fee would be roughly R12-million.

However, correspondence shows that this would merely be an introduction to the much bigger, two-year dive into every municipality; from what amaBhungane has been able to establish, the proposed fees for this project would easily have topped R1-billion.

Trillian promised to smooth the way.

“Should the client accept the proposal … [t]he fee paid in this regard will be shared (on an agreed basis) with Trillian who as well as facilitating the process will partner with [Oliver Wyman] as a supplier development partner,” Clive Angel, a then-director and member of Trillian’s early management team, told Oliver Wyman in a February 2016.

Angel denies that he was ever an authorised representative of Trillian, saying his company merely provided start-up services to Trillian.

Angel added that since Trillian “conducted no business with Oliver Wyman or Cogta, all of the allegations we put to him were “irrelevant”.

A draft Oliver Wyman proposal shows that Trillian’s fee for “facilitating the process” and helping Oliver Wyman meet its supplier development targets would be at least a 35 percent of the contract.

“We will get one chance only to make the right impression that could lead us in securing opportunities within Cogta. For that, the timelines and expected process should be driven via the existing relationships with Minster and his office,” Goodson, at the time the CEO of Trillian Management Consulting, told Oliver Wyman.

One of the existing relationships that Trillian could clearly count on was with Wood’s former colleague Bobat.

The insider

Bobat, who appeared at Van Rooyen’s side just days after resigning from Regiments, denies that he had any relationship with Wood or the newly-formed Trillian from that point on.

Two former chief executives of Trillian and a trail of evidence contradict him.

According to Goodson: “[Clive] Angel informed me that [Trillian] would be working with Bobat at (initially) Treasury and later, Cogta… Angel informed me that Bobat would pass information onto me, that I will have to pass onto [Oliver Wyman consultants Maarten] De Wit and [Bernhard] Hartmann.”

Angel denies ever making this statement, and says: “Bobat … was not and … has never been an employee or consultant of any nature to Trillian.”

Starting in January 2016, emails bounced back and forth between Bobat (using his private Gmail address) and Trillian, asking for feedback and advice on Oliver Wyman’s draft proposal for Cogta.

On February 13, Bobat sent Trillian his comments on the draft proposal.

His comments included everything from the design of the proposal to advice that Trillian’s logo should not be on the front page of the proposals and rather included as “the empowerment partner on the transaction”.

Oliver Wyman should also “insert more faces of the darker shade – the profiles are too male orientated (not a single female or black face),” Bobat advised.

Trillian immediately passed on Bobat’s comments to Oliver Wyman and the proposed changes were made.

Bobat confirms he reviewed Oliver Wyman’s proposal, but says he simply asked for Trillian’s status as the empowerment partner to be made clear, and that his request for more black faces was in line with “government’s transformation agenda”, albeit that the faces added were those of foreign consultants.

Bobat declined to comment on whether he had told the department about this potential conflict of interest, but did tell us that he stopped engaging with Trillian when it became clear that Cogta would have to pay for the five-week diagnostic project.

The deal-breaker

The suggestion that Cogta wasn’t interested in Oliver Wyman’s five-week diagnostic unless it came at no cost contains half a grain of truth.

Emails show that Trillian pushed Oliver Wyman to adopt the same “at risk” payment structure that was poised to reap astonishing rewards for Trillian and McKinsey at Eskom.

Instead of being paid an hourly rate, which is capped by treasury, Eskom had agreed to pay a percentage of any “savings” the consultants identified.

Goodson told Oliver Wyman via email that when Trillian had discussed the question of fees, the feeling was: “If there is a cost to this work, we will have to go through a formal tendering process which is not preferred.”

Instead Goodson recommended that the five-week project be treated as a “working capital investment” with the objective of getting the go-ahead for a “gain share” or at risk model for the “implementation phase” where the consultants would be put in charge of turnings around all 266 municipalities.

Angel reiterated the point, saying Oliver Wyman and Trillian should see the five-week diagnostic as “an opportunity to get into the client’s space” and to gather the information they needed to “compile an unsolicited proposal” for the much larger implementation phase of the project – potentially a two-year project with fees in excess of R1-billion.

Oliver Wyman refused to budge, and following a meeting with Essa in Dubai told Angel: “Please align with Salim. We should be good to go for a paid assignment.”

Everything looked on track until, in early March and without warning, Oliver Wyman pulled the plug on the Cogta project.

The break up

There is evidence that it was this “at risk” approach, combined with a healthy cynicism about the general ungovernability of local government, that caused Oliver Wyman to eventually reject Trillian’s advances, at least on the Cogta project.

However, the Cogta project wasn’t the only contract Oliver Wyman was eyeing – they were also in the final stages of finalising a “cultural change” proposal at Eskom, a year-long project aimed at overhauling Eskom’s corporate culture, which Oliver Wyman described as “politicised, technocratic and bureaucratic”.

Trillian would once again be included as the supplier development partner.

On March 3, Oliver Wyman told Trillian: “I think we have a very strong proposal; let’s get it in front of the client.”

But after Oliver Wyman turned down the Cogta project, the firm appears to have fallen out of favour with Trillian, who went looking for another partner.

The new partner

Emails show that just two weeks later, Trillian shopped the Oliver Wyman projects for Eskom and Cogta to a rival consulting firm, Bain & Company.

Bain confirmed that Trillian approached them, saying: “We met them a number of times, we were trying to understand what value they were providing… We did a due diligence internally and (informally) externally and we decided it was not a partner we wanted to work with.”

Asked why, Bain said: “They were not providing us with the documentation we were asking them for. That lack of information coupled with the informal message we were getting from the market made us understand that[?].

“The message [from the market] was not to touch – because of who they were and the practices they were putting in place.”

Bain also said that no figures were discussed with Trillian, but added: “Seeing the numbers now – $100-million – makes it look even worse.”

Trillian would only say: “Trillian had discussions with a number of potential partners including Oliver Wyman and Bain & Co. To date no work has been conducted by Trillian with either Oliver Wyman or Bain.”

In a written statement, Cogta said that it “did not commission Oliver Wyman and/ or Trillian to perform any work during the minister’s tenure.”

Oliver Wyman has tried to downplay its two-month-long flirtation with Trillian, calling it “exploratory” and saying that the reason it called off any of the envisaged projects with Trillian was because of “governance concerns”.

“Oliver Wyman governance mechanisms trigger two approval processes,” Oliver Wyman told us.

“The first is to assess the credentials of the [black economic empowerment] partner, including the terms of a proposed collaboration or partnership.

“The second is to assess the suitability of the potential client, including the appropriateness of risk sharing arrangements given the nature of the client and project, as well as compliance with procurement laws and procedures,” Oliver Wyman said in a statement.

“Not one of the opportunities that were explored with [Trillian] passed all [Oliver Wyman’s] governance tests. [Oliver Wyman’s] governance processes accordingly led to the rejection of any contracts/partnerships that were explored with [Trillian].”

Ironically, the company did get work thanks to Trillian – albeit indirectly.

In November 2016, Eskom contracted Oliver Wyman to review rival consulting firm McKinsey and Trillian’s controversial “at risk” work for the power utility.

The report it produced was damning and appears to have played a significant role in Eskom’s decision to demand repayment of R1.6-billion it had paid to McKinsey and Trillian.

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Susan Comrie and Ankit Paliwal, Input Editor at IANS in India

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