Aveng, Stefanutti Stocks also face summons

Cape Town in R428m claim

LISTED construction groups Aveng and Stefanutti Stocks have been included in the more than R428 million civil damages claim lodged against Wilson Bayly Holmes-Ovcon (WBHO) by the City of Cape Town for colluding on the tender for the construction of the Green Point Stadium for the 2010 Fifa World Cup.

The City of Cape Town confirmed to Business Report last month that it had lodged the claim against WBHO in the high court in December.

Ian Neilson, the City of Cape Town’s mayoral committee member for finance, subsequently confirmed the summons was issued against WBHO Construction, Stefanutti Stocks and Aveng jointly and severally for R429 474 878, alternatively R428 757 001, together with interest on the amount.

Neilsen said the quantum was determined through an assessment of the financial circumstances of the matter by a panel of expert economists, auditors and other professionals. But he said the exact method of quantification was still privileged at this point.

WBHO was in a joint venture with Murray & Roberts (M&R) when bidding for the tender and then won the tender. The project was completed in November 2009.

WBHO, Stefanutti Stocks and Aveng each made admissions related to the Green Point Stadium in the settlement agreements they reached with the Competition Commission in terms of the fast-track settlement process. M&R is not included in the City of Cape Town’s civil damages claim.

Ed Jardim, the group communications executive at M&R, said it was aware of the civil action instituted by the City of Cape Town against WBHO, but indicated the city had not taken any legal action against M&R.

“We have not been cited as we did not collude on the stadium. We had an ‘open book’ negotiation with the City of Cape Town and our proposed margin and revenue for the project was shared with the client,” he said.

Kobus Verster, the chief executive of Aveng, confirmed on Friday the group had received a summons from the City of Cape Town regarding Green Point Stadium in December, but stressed Aveng did not construct the stadium.

Stefanutti Stocks failed to respond to a request for comment.

Louwtjie Nel, WBHO’s chief executive, told Business Report last month they believed the City of Cape Town did not suffer any damage and the company had given notice of its intention to defend the claim.

“Obviously it’s a very sensitive case, but we’re very confident of our case. We don’t think shareholders should be concerned about it and that is why we have not made any provision for it,” he said.

WBHO mentioned the claim last month when it published its financial results for the six months to December, but Aveng did not mention it specifically.

In comment under the heading “Claims and legal disputes in the ordinary course of business” in Aveng’s financial results announcement, it said: “The group is, from time to time, involved in various claims and legal proceedings arising in the ordinary course of business. The board does not believe that adverse decisions in any pending proceedings or claims against the group will have a material adverse effect on the financial condition or future operations of the group.

“Provision is made for all liabilities which are expected to materialise and contingent liabilities are disclosed when outflows are possible.”