Avis ready to reveal its Bosasa relations at #StateCaptureInquiry
Politics / 11 February 2019, 11:17am / Ayanda Mdluli
Johannesburg - Avis Fleet, a subsidiary of JSE-listed Barloworld Group, appears to have benefited in billions of rand from its close proximity to Gavin Watson’s Bosasa Group between 2005 and 2017.
Independent Media has established that Bosasa was awarded a year-long maintenance lease contract by the Department of Transport in 2005 valued at R2billion.
Bosasa then partnered with Avis to form a company called Phakisa World. That contract, according to sources close to the saga, has been running for close to 12 years.
Both Bosasa and Avis are alleged to have been paid as much as R8bn during this period.
It is yet unclear if Watson had a role in assisting Avis secure the City of Joburg tender in 2011 to manage the organisation’s fleet.
The 2011 fleet management contract was scheduled for five years but ended up running for seven years, which saw Avis pocketing R2bn.
When pressed for comment, Barloworld confirmed that it had done business with Bosasa but claimed to have severed ties with the company when its illicit dealings with government officials started surfacing.
The company said it had appointed Norton Rose Fulbright law firm to conduct a full forensic investigation into the relationship between Phakisaworld Fleet Solutions, Avis Fleet and Bosasa.
In 2005, the National Department of Transport published a request for a proposal for a five-year end to end fleet solution that would incorporate an ad hoc rental service to the government.
According to information from Barloworld, the parties, seeking to strengthen their BEE credentials, the management of Zeda Car Leasing at the time decided on a joint venture with Bosasa through its subsidiary, Phakisa Fleet Solutions (Pty) Ltd.
The joint-venture agreement resulted in the formation of a special purpose vehicle (SPV) known as Phavisworld Fleet Solutions, which was later renamed Phakisaworld Fleet Solutions.
Through this vehicle, the SPV could meet the bid specification of a 50% BEE shareholding. Zeda Car Leasing held the balance of the 50% equity in the joint venture.”
Phakisaworld Fleet Solutions was then awarded the tender.
According to Albert Geldenhuys, chief executive of Avis Fleet, with the growing negative reputational profile of Bosasa and its subsidiaries, coupled with the many challenges within the SPV, both parties agreed to sever ties.
“Following exit negotiations, a buyout was agreed in 2012, giving Zeda Car Leasing total control of the SPV,” explained Geldenhuys.
“Since the dissolution of the joint venture, neither Zeda Car Leasing nor any of its subsidiaries has had a relationship with the Bosasa Group or any of its directors.”
Angelo Agrizzi, the former chief operations officer of Bosasa, detailed during his testimony at the Zondo Commission that the company had paid bribes to government officials to ensure that it secured lucrative contracts dating back to the early 2000s.
Avis has since revealed that it is willing to testify at the Zondo Commission to deliver evidence.
Responding to questions, Geldenhuys added: “Following evidence delivered to Deputy Chief Justice Zondo about the corrupt practices of the Bosasa group, the leadership of Barloworld has appointed the Norton Rose Fulbright law firm to conduct a full forensic investigation into the relationship between Phakisaworld Fleet Solutions, a subsidiary of Zeda Car Leasing (Pty) Ltd, trading as Avis Fleet, and Bosasa’s Phakisa Fleet Solutions (Pty) Ltd. Furthermore, in the interest of transparency the management of Barloworld is prepared to testify before the Zondo Commission to deliver evidence collected during the investigation as and when required.”
The Department of Transport was given four days to respond to queries. It committed to responding early this week.