South Africa- Johanneburg - 24 October 2019 - Chief Executive Mteto Nyati at the Altron released their interim results for the six months ended August 31 2019 on October 24. Picture:Nokuthula Mbatha/African News Agency(ANA)
South Africa- Johanneburg - 24 October 2019 - Chief Executive Mteto Nyati at the Altron released their interim results for the six months ended August 31 2019 on October 24. Picture:Nokuthula Mbatha/African News Agency(ANA)

Altron vindicated as subsidiary and Thobela Telecoms receive favourable ruling

By Sandile Mchunu Time of article published Oct 6, 2020

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DURBAN - JSE-listed technology group Allied Electronics Corporation (Altron) felt vindicated yesterday after its subsidiary and Thobela Telecoms received a favourable ruling from the Supreme Court of Appeal (SCA).

The SCA overturned the July 2019 finding by the Gauteng High Court in Pretoria that set aside the awarding of a broadband contract to Thobela Telecoms on the grounds that internal processes were not followed by the city in awarding the contract to Thobela Telecoms in 2015.

Thobela Telecoms is a special purpose vehicle in which Altron Nexus was a minority shareholder.

A full bench of the court found that the City of Tshwane’s application to have the contract award set aside had been erroneously granted by the lower court.

Altron chief executive Mteto Nyati said Altron was studying the judgment in terms of the way forward, but said the company had been vindicated.

“Neither Altron nor its subsidiaries will countenance any corrupt dealings. We are pleased that the court has ruled in our favour. Any possible maladministration or mismanagement of Altron Nexus was quite correctly never an issue. The city and its officials were solely to blame for its predicament,” Nyati said.

Altron Nexus was involved as the primary network designer and architect, supplier of broadband equipment and related services.

The dispute between Thobela Telecoms and the city halted the contract after the city alleged that the tender award process was unlawful due to internal processes and procedures at the city not being correctly followed.

The project was later put on hold by the city, pending the outcome of the court case.

Judge Visvanathan Ponnan pointed out the city had sought to review its own decisions, because it had not complied with its own rules, “misinterpreted certain statutory prescripts and maladministered its own tender process in respect of the appointment of a service provider for a municipal broadband network project”.

He said the city delayed unreasonably in bringing the initial matter to court and “blew hot and cold”, insisting the execution of the project be sped up, while also considering a legal appeal.

After the 2019 ruling, Nyati said the project had between R40million and R60m estimated exposure to its business.

However, Nyati said they saw this judgment as a victory for companies that obey the law and are ethical and transparent.

Altron said under the terms of the contract, Thobela would build, operate and, at the end of 18 years, transfer a 1500km fibre optic broadband network, which would provide internet access to the city’s underserviced areas.

Ponnan said the city, under both previous and current administration, had sat back for a protracted period, leaving the appellants financially exposed.

BUSINESS REPORT

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