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The Supreme Court of Appeal has overturned a finding by the Gauteng High Court in Pretoria that set aside the awarding of a broadband contract to Thobela Telecoms, a special purpose vehicle in which Altron Nexus was a minority shareholder. Altron Nexus is a subsidiary of JSE-listed Altron Group.

In the judgment handed down on Monday, a full bench of judges found the City of Tshwane’s (CoT) application to have the contract award set aside had been erroneously granted by the lower court. The judgment, written by Judge of Appeal Visvanathan Ponnan, set aside the previous ruling, and upheld the appeal by Altron and Thobela, and Absa Bank as funders, with costs, including those of two counsel.

The matter relates to a dispute between Thobela Telecoms and CoT over the City’s allegations that the tender award process was unlawful due to internal processes and procedures at the CoT not being correctly followed. The project was later put on hold by CoT, pending the outcome of the court case.

Responding to the ruling, Altron Chief Executive Mteto Nyati said Altron was studying the judgment in terms of the way forward. He added that 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 mal-administration or mismanagement of Altron Nexus was quite correctly never an issue. The City and its officials were solely to blame for its predicament.”

The financial model, provided solution, and government regulations were investigated ahead of the awarding of the contract.

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”.

The judge pointed out that 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.

Under the terms of the contract, Thobela would build, operate and – at the end of 18 years – transfer a 1 500km 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.

“We see this judgment as a victory for companies who obey the rule of the law and are ethical and transparent. It is also a win for marginalised people, who were set to initially benefit from broadband,” Nyati concluded.

Issued by Altron Nexus