Court pours water on Canadian firm’s appeal

Wiseman Khuzwayo
Business Report
August 17, 2003

Johannesburg: A Canadian engineering company, which was convicted of corruption in the Lesotho Highlands Water Project, has lost its appeal but had its fine reduced in Lesotho’s highest court.

Acres International paid bribes of about C$681 000 (R3.6 million) to the water project’s former chief executive, Masupha Sole, to ensure it won contracts in the construction of the Katse Dam.

Acres paid Sole C$493 000 between June 1991 and January 1998, and another C$188 000 between January 1991 and April 1991.

The company was fined R22 million, but this was reduced to R15 million on appeal.

Part of the court judgment read: “The fact of the conviction demonstrates to those who do business in developing countries that they do not have a licence to buy favour from governments by making corrupt payments to persons in authority. If they do so, they will be vigorously prosecuted and they will be severely punished if convicted.”

Sole was sentenced to 18 years in jail for receiving more than R7.5 million from international contractors and consultants from the US, Britain, Canada, France and Germany.

More trials involving companies in the project were expected, according to the prosecutor, Durban advocate Guido Penzhorn.

Firms likely to be prosecuted include the Highlands Water Venture consortium consisting of Impregilo of Italy, Hochtief of Germany, Bouygues of France and Basil Read of South Africa, which allegedly paid Sole $350 000 between 1991 and 1998 before being awarded the Katse Dam contract.

The Lesotho Highlands Project consortium, which includes LTA-Grinaker from South Africa and Alston of the UK, are alleged to have bribed Sole with R6.6 million. Five of the firms in the two consortia shortlisted for the R7 billion Gautrain Rapid Rail Link have ties with firms accused of bribery in the Lesotho project.

The Gauteng government has said it would not hesitate to axe the companies from the tender process if they were found guilty of bribery.

Categories: Africa, Lesotho, Odious Debts

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