ESR - Esorfranki Limited - Press release ESORFRANKI LIMITED (Incorporated in the Republic of South Africa) (Registration number: 1994/000732/06) JSE code: ESR ISIN: ZAE000133369 ("Esorfranki" or "the group") PRESS RELEASE Further to previous announcements and press coverage in respect of the contested award to Esorfranki Pipelines (Pty) Limited (a division of Esorfranki) in joint venture with Cycad Pipelines (Pty) Limited ("the joint venture") of the Western Aqueduct project by e-Thekwini Municipality following an open tender process ("the contract"), Esorfranki wishes to clarify the impact for the group of the wording of the Honourable Madam Justice D Pillay`s judgment handed down on 25 October 2011 ("the judgment"), with specific reference to the possibility of "corruption" in the tender process: Two applications were made in the KwaZulu-Natal High Court ("the Court") by two alternative tender participants, citing e-Thekwini Municipality as the first respondent, for the setting aside of the contract. It was common cause between all parties that the tender notice issued by the e-Thekwini Municipality conflicted with section 2(1)(b) of the Preferential Procurement Policy Framework Act, Act 5 of 2000. The Court found that this non-compliance of the original tender notice was fundamental and could not be cured. The Court therefore made an order that the contract be set aside on the basis of this legal contravention. In the judgment reference was made in passing to the possibility that "corruption" in the tender process could not be ruled out. Esorfranki is gravely concerned at the potential implication for the group and stresses that the remarks made by the Court in the judgment relating to "corruption" have no bearing on the conduct of the joint venture and the joint venture accordingly distances itself from these remarks. Guided by independent legal opinion, Esorfranki confirms that no allegation was made in any of the applicants` papers in this regard, the applicants` case was not premised on any suggestion of "corruption" and the question of "corruption" was not raised in argument by the applicants` counsel or by the Court in hearing this argument. The first respondent, together with Esorfranki Pipelines and Cycad Pipelines, has applied for leave to appeal against the whole of the judgment and order for costs. Germiston 1 November 2011 Date: 01/11/2011 13:35:04 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.