Full story behind Absa, Net1 still not told

Image: GCIS

No, it's far better that government departments use your hard-earned cash on full-page advertisements, cunningly disguised as actual news.

You might have noticed last week's full-page advertorials in the Sunday Times, City Press and Independent, designed to masquerade as real news, entitled Absa and AllPay lose bid. Giant pictures of Social Development Minister Bathabile Dlamini adorned the page, above captions saying Vindicated.

The subject of this ad is a major issue involving one of the country's largest tenders, worth R10bn, to distribute social grants to 15m South Africans.

The tender started an almighty spat between Absa's subsidiary AllPay (which lost) and Net1 (which won).

Net1, led by charismatic businessman Serge Belamant and listed on Nasdaq and the JSE, is said to have done nasty things to win the tender.

This was after the earlier welfare tender was cancelled in 2009 when one of the judges, Norman Arendse, said he was approached by Gideon Sam in 2007, saying Net1 had an open chequebook for adjudicators.

Then in August, the High Court ruled the tender illegal because of various problems, saying the lowering of AllPay's scores was "unfair and irrational" and seemingly done for an "ulterior purpose".

Despite that, the court refused to scrap the tender as it would prejudice the beneficiaries, who needed the cash to survive.

So Absa appealed to the Supreme Court of Appeal to have it scrapped.

Last week Judge Robert Nugent threw out Absa's request, flaying the bank for evoking "suspicion of corruption and dishonesty by innuendo and suggestion, but without ever making the accusation directly".

So, why last week's media blitz from Dlamini? And why didn't she place giant adverts in the press when the High Court ruled the tender "illegal and invalid" in August?

Certainly, it's not as if this is the last word. Absa may yet go to the Constitutional Court. And, for Net1, there is a US Federal Bureau of Investigation probe into the bribery claims.

Worth looking into

But, most notably, other issues raised by AllPay warrant a second glance.

These relate to an affidavit submitted late, detailing a conversation about "serious dishonesty" in the tender with John Tsalamandris, an employee of the SA Social Security Agency (SASSA), which decided the tender. Tsalamandris was the secretary of one of the bid committees, so he knows a thing or two.

Tsalamandris met Roedolf Kay, the head of the SA Older Persons Forum, at a Spur in Cape Town in March last year, and told him how the tender was "just so blatantly dirty". Kay recorded the conversation and the transcript, submitted to court, makes shocking reading.

In it, Tsalamandris details how AllPay's scores were lowered, how people connived to exclude AllPay and how key people "took money" in cash.

Kay eventually filed an affidavit about the conversation, but crucially Tsalamandris himself did not as he was already a witness for his employer, SASSA.

He also seemed to fear for his safety.

The Supreme Court dismissed Kay's evidence, saying it "carries no weight at all and would not be admissible even if it had been deposed to by Tsalamandris himself".

This is partly because some of the things he said were not "within his personal knowledge" or were simply "inferences" he made.

Now, perhaps it is true that Tsalamandris's views on bribes were hearsay. But there are other parts that he seems to know personally, such as where he says he was told to "do a letter backdated to July for something they call "regularising".

Perhaps it wasn't the place of the Supreme Court to make that inquiry. But if the government has "adopted a zero-tolerance approach against those who deliberately defraud our system", as Dlamini's adverts said, surely you should probe Tsalamandris's claims deeper?

Surely, taxpayers' money would be better spent on finding out if tender documents are routinely backdated rather than spending it on glossy full-page ads discussing opposition to corruption?

Source: Business Times via I-Net Bridge