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ESR - Esorfranki Limited - Press release

Release Date: 01/11/2011 13:35:05      Code(s): ESR
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                     
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