Group Five wants R45m from govt
COLLUSION: WILL STILL OPPOSE COMPCOM REFERRAL
Business rescue practitioners believe its high court review application has a good chance of success.
Group Five Construction, the main operating subsidiary of Group Five Limited, is engaging with government and the Tirisano Construction Fund about the repayment of almost R45 million it paid in terms to the Voluntary Rebuilding Programme (VRP).
In terms of the VRP agreement, seven companies collectively agreed to contribute R1.5 billion for development projects and committed to promoting transformation and black participation and ownership in the sector.
This was to settle outstanding and potential civil claims by government entities related to collusive tendering and bid-rigging on government projects before the 2010 Fifa World Cup.
The Tirisano Trust is the socio-economic development fund to which the seven listed construction companies will collectively contribute the R1.5 billion over 12 years in terms of an agreement with government.
Group Five Limited and Group Five Construction are both in business rescue.
Group Five Construction paid its contribution of almost R45 million to the Tirisano Construction Fund before business rescue proceedings started.
The group’s business rescue practitioners revealed in Group Five Construction’s business rescue plan that they had investigated and taken legal advice on this issue.
Transactions ‘likely voidable’
They were advised that the conclusion of the agreement in October 2016, and all subsequent payments made in accordance, were “likely voidable transactions as contemplated in Section 141(2) (c)(i) of the Companies Act”.
The business rescue plan states: “The BRPs [business rescue practitioners] are presently engaging with the government and the Tirisano Construction Fund to procure repayment of the aforementioned amount, or such part thereof as may prove recoverable, coupled to a suitable release of Group Five Limited and the Company of any residual obligations under the settlement agreement.”
The BRPs also revealed they’d engaged with the Competition Commission hoping to achieve “an amicable all-inclusive resolution” of the various pending proceedings the commission had against Group Five Construction but “have had no success…”.
These proceedings are pending before the Competition Tribunal and relate to its alleged involvement in collusive practices flowing from World Cup stadia construction and the Senekal road construction project.
Charges of collusion
Regarding the road project, the commission has alleged there was collusive tendering between Group Five, Wilson Bayly Holmes-Ovcon Construction and Concor (Murray & Roberts subsidiary), on a tender to rehabilitate National Route 5, section 4.
The business rescue practitioners said coupled to the tribunal, Group Five Construction was waiting for judgment on the outcome of a high court review application it brought related to the commission’s investigation.
“The outcome of the review is anticipated to have a profound effect on the proceedings currently pending before the Competition Tribunal.”
The business rescue plan states that, based on independent legal advice regarding the company’s prospects in the various proceedings, the BRPs believe the company has good prospects of success in the review proceedings.
“However, should the review be unsuccessful, the company will persist in its defence of the proceedings before the Competition Tribunal, unless suitable settlement terms can be agreed with the Competition Commission.”