On Tuesday 3 December 2013 Sekunjalo Investments Ltd laid a criminal charge at the Caledon Square police station in Cape Town, against the Sunday Times newspaper, its publishers, the editor Phylicia Oppelt and one of its journalists, Bobby Jordan.

The charge arises from an article which appeared in the Sunday Times on Sunday, 1 December 2013, quoting extensively from a draft provisional report by the Public Protector on an investigation conducted by her into the award of a tender by the Department of Agriculture, Forestry and Fisheries for the management of its fleet of patrol and research vessels.

The contents of the Public Protector's draft provisional report are confidential and protected against disclosure in terms of section 7(2) of the Public Protector Act 23 of 1994, until the Public Protector releases her final report

Section 11(1) of the Public Protector Act provides that any person who contravenes section 7(2) shall be guilty of an offence.

The Sunday Times reported extensively on the findings by the Public Protector which the newspaper said the Public Protector is due to announce on Thursday.

This constitutes a flagrant contravention of Act 23 of 1994.

One finding in particular concerns Sekunjalo, to wit "that the contract award process showed evidence of collusive tendering and/or bid rigging by the Sekunjalo consortium."

Inasmuch as this finding is now out in the public domain, and assuming that will indeed be reflected in the final report of the Public Protector, Sekunjalo is constrained to respond publicly.

Presumably the finding is made with reference to "collusive tendering" mentioned in section 4(1)(b)(iii) of the Competition Act 89 of 1998.

Sekunjalo denies that it engaged in collusive tendering and/or bid rigging.

Collusive tendering occurs when two or more parties in a competitive relationship agree to tender in such a manner that competition between them for that tender is eliminated, rather than to submit independent competitive bids. The outcome of collusive tendering is that the customer pays an artificially high price.

A tender process is designed to foster competition between bidders to achieve a competitive outcome.

In order to conceal that there is no true competitive interaction between bidders, collusive tendering occurs in a clandestine manner.

The bids by the four bidding entities in the Sekunjalo / Premier Fishing stable contain none of these traits. They made no secret about their affiliation whatsoever.

Moreover, a firm cannot collude with itself. Section 4(5) of the Competition Act provides that section 4(1) does not apply to constituent firms within a single economic entity, such as between a company, its wholly owned subsidiary, or any combination of them, as was the case in this instance.

Where Sekunjalo Investments Limited and Premier Fishing (Pty) Ltd bid separately in two consortiums, those consortiums were put together with the aim of developing value added product offerings which neither Sekunjalo Investments nor Premier Fishing could achieve independently. Furthermore, the consortiums included parties who were important for the Department's public interest objectives.

Each of the four bidders submitted separate and distinct economic models and modes of delivery for the provision of services.

If one has regard to the detailed historical bid documents of these separate entities, it is apparent that the modules differed substantially and offered the Department a variety of options from which it could choose the most apposite one.

The finding is misplaced.

Sekunjalo deplores the unauthorised publication by the Sunday Times. It has not been afforded an opportunity to examine the premise upon which the Public Protector allegedly arrived at the finding. It is for this very reason that the Public Protector Act 23 of 1994 makes it a criminal offence to disclose any information of this nature before the Public Protector releases her final and official report.

Note to editors: Sekunjalo will not respond to further queries until the Public Protector releases her final and official report.

Statement issued by Sekunjalo Investments Ltd, December 3 2013 (updated December 4 2013)

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