Wiseman Khuzwayo
Business Report
April 11, 2007

Johannesburg: The Lesotho appeal court has not only upheld the bribery and corruption conviction of a third multinational contracting firm involved in the Lesotho Highlands Water Project (LHWP), but has increased its fine.

Lahmeyer International, the biggest engineering consulting group in Germany, was convicted of bribing Masupha Sole, the chief executive of the Lesotho Highlands Development Authority, the agency that was responsible for the construction of the Katse and Mohale dams.

Lahmeyer was earlier found guilty by the high court of paying Sole a sum of R2.3 million in bribes and was fined R10.5 million.

The company appealed against the judgment. The appeal court not only confirmed the conviction but increased the fine to R12 million.

Sole was sentenced to 15 years in prison for accepting bribes, reduced to 12 years on appeal.

Acres International, a Canadian engineering and construction company, still owes the impoverished kingdom of Lesotho R13 million in fines for bribing Sole. The company wants to pay the fine in instalments but the Lesotho government has refused.

Schneider Electric, a French electrical company that merged with Spie Batignolles in 1995, pleaded guilty to giving R16 million to Sole as a bribe and was fined R10 million.

Italy’s Impregilo, which led the consortium that built the Katse dam, is next to be prosecuted.

In his judgment, Judge Jan Steyn said the evidence placed before the court painted a picture of bribery on a massive scale, not only by Lahmeyer.

“It is therefore incumbent on this court and those who can contribute to combating practices of this kind to do what we can within our mandates and to act resolutely in this respect,” said Steyn.

He added that it was incumbent on international funding agencies to use sanctions when contraventions occurred.

The LHWP was funded by the World Bank, the EU and others.

Guido Penzhorn, the prosecutor in all these cases, recently told a conference how difficult it was to prosecute a case of bribery.

“Clearly once you involve yourself in the murky world of bribery it is not open to you to simply opt out whenever you like . . . this simply illustrates the insidious nature of the crime of bribery.

“There is a wall of silence that is very difficult to penetrate. Everyone who is in a position to talk cannot do so because someone else in turn has something on him,” Penzhorn said.