Legal firm was favoured – judge
Phambane must repay Lepelle millions in fees
Controversial law firm Phambane Mokone Inc (Phambane) has found itself in a spot of bother after the Limpopo High Court set aside several multimillion-rand contracts the firm had with Lepelle Northern Water Board (Lepelle).
The embattled Lepelle awarded three lucrative contracts between 2015 and 2019, and all three have been declared unlawful. Phambane was paid a cool R58-million for two debt collection services contracts and a further R5.7-million for a forensic investigation.
However, Phambane was not satisfied, it still declared a dispute with Lepelle, claiming the water entity still owed it a further R22-million.
Evidence accepted by the judge shows that Phambane was unfairly favoured at the expense of other firms.
Examples of how Phambane was favoured:
• First contract: On January 2015, Lepelle issued a request for quotation to firms of attorneys for the collection of debt owed to it by Mopani municipality. Phambane and three other firms responded to the bid. However, Phambane’s bid was late but was still accepted. The contract to collect R332-million owed was awarded to Phambane at a commission fee of 6.3%.
• Second contract: On December 2016, Lepelle again invited quotations to attorneys on its panel to tender for a debt collection tender. Again, this was for monies owed by Mopani. What made this tender peculiar was that it was done during the Christmas period. The tender to collect R377-million was again awarded to Phambane at an increased commission fee of 9%.
• Third contract: On March 2019, Lepelle issued a tender calling on prospective bidders to submit bids for the investigation of allegations of fraud and corruption levelled against its then chairperson. Phambane was handed the tender despite the National Treasury having told Lepelle not to proceed as the department of water and sanitation was already investigating the allegations.
Judge M Naude agreed with Lepelle that its former executives acted unlawfully.
“In the present case, public interest and the duty to protect the public purse far outweigh the interests of the first respondent [Phambane]. In my view, the first respondent cannot be regarded as an innocent tenderer given the fact that it is a legal firm of attorneys, which knows or ought to know the legal requirements for a lawful procurement and which were not complied with in this case,” the judgment reads in part.
The judgment means that Lepelle, a state-owned enterprise supplying bulk potable water in Limpopo, can now proceed to recoup millions of rand it paid to Phambane.
Judgment means Lepelle can recoup millions paid to Phambane