Wiseman Khuzwayo
Business Report (South Africa)
September 12, 2004

Johannesburg: A Canadian international contracting company that is worth millions of rands has failed to pay a single cent of the R15 million it was fined a year ago by a Lesotho court for corruption.

The last financial statements for Acres International, for 2002, show the company had a consolidated income of R687 million.

Six months ago, a spokesperson for Acres told Business Report that the company was prepared to pay but was negotiating terms. The offer was rejected by Lesotho’s attorney-general, Fine Maeme, who insisted on a full payment.

This week, Maeme confirmed that Acres had not paid a single cent and said he was still waiting for the payment, in full. Acres has now been taken over by Hatch, another Canadian engineering conglomerate.

This week, Hatch spokesperson Tom Reid, speaking from its global corporate office in Mississauga, Canada, said Acres intended to pay the fine. He did not say when this would happen.

Acres was one of the multinationals contracted for the Lesotho Highlands Water Project (LHWP). It paid the project’s then chief executive, Masupha Sole, R3.62 million to ensure it won a contract.

The LHWP is partly funded by the World Bank. In June, the bank’s sanctions committee declared Acres ineligible to receive any new bank-financed contracts for three years because of the offence.

Meanwhile, the US senate foreign relations committee is holding hearings into corruption in projects funded by the World Bank.

And Impregilo, one of Italy’s biggest construction firms, is to be indicted on October 26 for corruption before the Lesotho high court.

Lesotho has set an international precedent in its vigour to prosecute multinationals that are thought to have been involved in giving bribes for the LHWP contracts.

Lahmeyer International, the biggest engineering consulting group in Germany, was fined R12 million for the offence.

French company Schneider Electric pleaded guilty and was fined R10 million.