The South African Post Office (SAPO) has been cleared of all wrongdoing by the Supreme Court of Appeal (SCA), in relation to a bungled tender in 2002.
The post office was sued for R60 million in damages by Brian de Lacy and Barry Beadon.
According to the SAPO, the tender was for a biometric payment system, which would help facilitate the handing out of pensions and grants in the North-West Province.
The post office had called for requests for proposals by late 2001 and awarded the contract to the Kumo consortium, for an undisclosed amount, out of a shortlist of three bidders. The contract was later scrapped when SAPO reviewed its tender process.
“We stopped the tender because we felt that the technology was not relevant for us at the time,” says SAPO spokesman Lungile Lose. “One of the losing bidders, Cornastone e-Commerce Services, ceded the rights it had to De Lacy and Beadon, who were members of the consortium.”
De Lacy and Beadon made an initial claim of R514 million, which was later reduced to R60 million by the Pretoria High Court, in December 2007. The two claimants were suing to recover profit they expected to make had Cornastone been awarded the contract.
According to media reports, Cornastone had drafted the biometric payment system requirements which SAPO had used as a basis for the solution, which would have been rolled out in the North-West and then to the rest of SA.
De Lacy and Beadon stated SAPO's tender process had been flawed and it had wrongfully used the confidential information about the technology, which entitled them to damages. The Pretoria High Court upheld the claim and ordered SAPO to pay R60 million.
A SAPO statement says the High Court dismissed the other two claims for profits, had the payment system been deployed in the rest of SA, and the alleged utilisation and misappropriation of their technology.
SAPO filed an appeal with the SCA, in January 2008, which was followed by a cross-appeal by De Lacy and Beadon in February. The SCA set aside the Pretoria High Court's ruling and substituted it with an order dismissing De Lacy and Beadon's claim with costs.
“We feel vindicated and relieved by this judgement,” says Lose. “We are convinced that how we handled the tender was right and this means that we can now focus on the business.”
Appeal Court judge Robert Nugent exonerated SAPO, and said De Lacy and Beadon would have a case if they could prove SAPO acted fraudulently in awarding the tender to the Kumo consortium.
“I can find no evidence of manipulation or dishonesty on the part of any of the members of the SAPO's review panels. The evidence also does not disclose dishonest manipulation in the course of the deliberations of and reporting by the evaluation committee, nor on the part of the tender board,” he found.
Legal woes
The post office has been entangled in legal woes for a while and is yet to resolve a R1 billion lawsuit which is pending against it.
SAPO is being sued by Nasasa Mobile, a joint venture (JV) between the National Stokvel Association of SA and Glocell, for R1.3 billion, over a deal which would have given the JV exclusive rights to sell cellphones and airtime in Glocell's 2 500 outlets around the country.
The deal was scrapped by SAPO CEO Motshoanetsi Lefoka, and Nasasa Mobile began legal proceedings to claim damages. Lose says the matter is still sub judice and declined to comment further, except to say SAPO was still consulting its lawyers over the way forward.
Similarly, former SAPO CEO Maanda Manyatshe is suing the post office for R200 million. SAPO's former CEO Khutso Mampeule's allegations of corruption caused Manyatshe to resign as head of network operator MTN's local operations.
The allegations in 2006 led to criminal charges being brought against Manyatshe, who was then MTN's MD. The charges stemmed from a Mail & Guardian interview with Mampeule.
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