Wednesday, January 19

New evidence in Cape Town’s R429.47m civil damages lawsuit against construction companies


New evidence emerged in the City of Cape Town’s 429.47 million rand civil damages lawsuit against construction groups WBHO, Aveng and Stefanutti Stocks related to bid rigging and collusion at Green Point Stadium, now called Cape Town Stadium.

Cape Town City spokesman Luthando Tyhalibongo said on Monday that the arbitration was established from September 27 to October 8 this year and ran from the scheduled start date to October 5.

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Read: New Twist in R429m Civil Damage Lawsuit Against Construction Companies

Tyhalibongo said that only a few of the witnesses have completed their tests, and as a result, the arbitration was postponed by agreement between the parties.

“The arbitration was postponed because new evidence was provided to the City and the parties requested time to consider the evidence,” he said.

Without details

Tyhalibongo did not disclose the nature of the new evidence or comment on the importance of the new evidence to the outcome of the arbitration.

But he reiterated that Cape Town trusts his claims while emphasizing that it “does not have the freedom to comment on the merits.”

Tyhalibongo also confirmed that there have been no amendments to the City of Cape Town’s claim against Aveng, WBHO and Stefanutti Stocks.

He said the arbitration was postponed to July 2022 as this is the earliest date that all parties are available.

“The parties agreed to set aside seven and a half weeks in July / August 2022 to ensure that there is sufficient time for the matter to be heard in its entirety during the next session,” he said.

Tyhalibongo said that some of the witnesses from the city of Cape Town have given testimony, and that more will follow, but maintained that they are not free to reveal the identity of the witnesses.

Say

Stefanutti Stocks CEO Russell Crawford confirmed late last month, when the company released its interim financial results for the six months to the end of August 2021, that the arbitration hearing began, but was subsequently postponed and postponed until July 2022 “at the request of the City of Cape Town. ”.

“The group remains confident that it can defend this claim,” Crawford added.

WBHO previously told Moneyweb that it did not believe the city of Cape Town had suffered any harm and that it would be defending the claim, while Aveng did not respond to a request for comment.

The civil damages lawsuit was filed in 2015 and originated in the admissions made by the construction companies in the accelerated resolution process of the construction of the Competition Commission.

At the time, the City of Cape Town’s civil damages lawsuit was the first filed after the completion of the expedited resolution process for the commission’s construction.

This process resulted in the Competition Court in 2013 confirming the conciliation agreements reached between the commission and 15 construction companies, including seven publicly traded companies, in terms of which they collectively agreed to pay fines totaling R1. 46 billion for manipulation of bids and collusive tenders.

Collusion

Green Point Stadium was one of the projects listed by WBHO and Stefanutti in an agreement that was confirmed by the court.

Both companies admitted that they had reached an agreement with Group Five in December 2006 to provide a hedge price for this project to ensure that Group Five did not win the tender.

Stefanutti Stocks admitted to receiving a hedge price from WBHO to ensure that it could submit a non-competitive bid and to ensure that WBHO was awarded the tender.

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The tender was awarded to the Murray & Roberts / WBHO joint venture and the project was completed in December 2009.

M&R previously said the group had not been cited in the civil damages lawsuit because it did not collude on the project.

The group said it had an open book negotiation with the city of Cape Town and that the margin and revenue proposed for the project were shared with the client.

Group Five, which is in business rescue and whose listing on the JSE has been canceled, has not joined the claim or the procedure.

The City of Cape Town’s civil damages lawsuit against the three construction companies was set to be heard in Gauteng North High Court in early 2020, but the parties subsequently agreed to refer the matter to arbitration.


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