Afrirent vs Sunday World


Wed, Sep 9, 2020

Finding

Complaint 7954

Date of article: 26 May, 2020

Headline: Afrirent ‘dodgy’ deal back in focus

Author:  Aubrey Mothombeni

Page:  7

Online:  Yes

Particulars

This finding is based on a written complaint from Afrirent’s legal representative Mr Carlo Messina from Messina Inc, a written response from Sunday World editor Makhudu Sefara, and a response to that from Mr Messina. It is also based on documents provided by Mr Sefara, including an official  communication from National Treasury, as well as previous news stories on the subject of Afrirent’s contract with the City of Johannesburg.

Complaint

Mr Messina, on behalf of the firm Afrirent, which was contracted by the City of Johannesburg to provide a fleet service, complains of an article in the Sunday World headlined “Afrirent ‘dodgy’ deal back in focus” on the grounds that it had caused the company “significant reputational damage”, was not truthful, and that the company was afforded no right of reply.

Specifically, Mr Messina charges that the following clauses of the Press Code have been transgressed:

  1. take care to report news truthfully, accurately and fairly;

1.2 present news in context and in a balanced manner, without any intentional or negligent departure from the facts whether by distortion, exaggeration or misrepresentation, material omissions, or summarization;

1.3 present only what may reasonably be true as fact; opinions, allegations, rumours or suppositions shall be presented clearly as such;

1.7 verify the accuracy of doubtful information, if practicable; if not, this shall be stated;

1.8 seek, if practicable, the views of the subject of critical reportage in advance of publication, except when they might be prevented from reporting, or evidence destroyed, or sources intimidated. Such a subject should be afforded reasonable time to respond; if unable to obtain comment, this shall be stated.

  1. Text

1.1 The story appeared under the headline “Afrirent ‘dodgy’ deal back in focus.” It also featured a picture of former Johannesburg mayor, the then Democratic Alliance’s Herman Mashaba.

1.2 The intro to the story read: “National Treasury director-general Dondo Mogajane has instructed City of Joburg (CoJ) mayor Geoff Makhubo to cancel a R1.2-billion fleet contract awarded to Afrirent.”

1.3 It cites Mr Mogajane saying that the tender was irregular and did not comply with National Treasury norms and standards. He also instructed the CoJ to commission a forensic investigation into the tender “within 30 days.”

1.4 It reports that the fleet tender “was mired in controversy after allegations surfaced that the appointed company, Afrirent, had links with the DA’s governing partner in the City of Joburg, the EFF.”

1.5 The article cites a letter from Mr Mogajane to Johannesburg mayor Mr Makhubo saying that a Treasury review had shown “several anomalies relating to the contract”, one of which was that although the initial procurement plan was costed at R2.2 million “the project had ended up ballooning to R1.2-billion”.

1.6 The CoJ had decided to participate in an existing contract between the Mogale City local municipality (MCLM) and Afrirent but this was not yet signed at the time the CoJ contract was signed, according to the letter. The CoJ contract was signed on 13 July, 2018, just three days after it had sent a letter to Mogale City. 

1.7 The Treasury letter also pointed out that the CoJ contract was worth R1.4 billion, while the one with Mogale City, which was for 168 vehicles, was worth R111-million. The scope of the Johannesburg contract was much larger – requiring 2732 vehicles, including hatchback cars from Afrirent, which Mogale City did not have in its specification. “Therefore, CoJ acquired items that were not part of the contract.”

1.8 It quoted former Johannesburg mayor Herman Mashaba as saying “nothing untoward” was found in the contract by the City’s forensic investigations unit. “The final report released in June last year dismissed any notion that there was political interference in the awarding of a contract to Afrirent,” he said.

1.9 It quotes the current mayor’s spokesperson, Mlimandlela Ndamase, saying he had responded to the Treasury director-general and that “investigations are under way.’

  1. Arguments

Mr Carlo Messina for Afrirent

2.1 Mr Messina, on behalf of Afrirent, argues that “it has not been decided by any legislative body or court or any other forum” that the contract was irregularly awarded.

2.2 He also says a forensic investigation has already been concluded and it “absolves” Afrirent from any wrongdoing.

2.3 The article has caused the company “significant reputational damage.”

It was published without “any actual finding” and Afrirent believes it is the victim of a “hidden agenda”.

2.4 The company objects in particular to the word “dodgy” used in the headline. The Oxford dictionary defines it as “dishonest” or “unreliable”. Mr Messina writes: “Our client is neither.

“A reasonable person reading the headline may conclude that Afrirent acted dishonestly. Also, the word has negative connotations and implies that our client benefited from a contract which is smeared with those connotations. This is incorrect.”

2.5 It also objects to the phrase that cites other news reports that Afrirent has “links with the DA’s governing partner in the City of Johannesburg, the EFF.”

At the time, Afrirent denied these allegations. The Sunday World did not reflect these “historic denials”, nor did the newspaper contact Afrirent for comment.

Mr Messina says Afrirent is “not associated with any political party, nor has it received benefits from any political party.”

2.6 The clauses of the Press Code the company charges have been transgressed are listed above. With regards to clause 1.8, the right of reply, he says the newspaper “asserted that our client was dodgy or involved in a dodgy contract”. It also published allegations that the company was “linked to the EFF without affording our client the opportunity to comment.”

“No efforts were made, and no reasons were provided in the article as to why this was the case. A right of reply would have allowed our client the opportunity to give its side of the story so that the reader has a balanced view.”

This “falsity prejudices out client’s good name and reputation.”

2.7 Mr Messina asks that the Sunday World be ordered to apologise and give the company a right of reply.

Mr Makhudu Sefara for Sunday World

2.8 Mr Sefara replies that the newspaper did not report that a legislative body had said the contract was “dodgy.. nor is such a requirement for anything to be considered dodgy.”

The contract was declared “dodgy” by the National Treasury, and this was “widely reported” in the media. The story focused on an “injunction to the City of Johannesburg to cancel [the contract] it and subject those involved to a proper forensic investigation.”

2.9 Moreover, Johannesburg’s executive mayor, Geoff Makhubo “has publicly commented about the city’s fleet controversy, noting it has been “a hotbed of corruption and malfeasance.” Two senior officials have been suspended because of their involvement in the award of the contract.

2.10 The Director General of the National Treasury notes in his letter “that established supply chain policies were, in the awarding of this contract, not followed.”

The city had used Regulation 32 to enter into the contract with Afrirent. This regulation is a deviation from normal procurement, and in this case allowed a

“a municipality to use a similar contract in place in one municipality to enter into another contract without the burden of a new competitive process with a firm/company already vetted to supply similar services.”

The DG noted that the contract relied on by the CoJ to award the R1.2 billion tender to Afrirent was not yet in place in Mogale municipality and secondly, that the “terms and scope of the two contracts are miles apart. So the basis of the contract is, well, dodgy.”

2.11 In any event, writes Mr Sefara, the paper did not refer to the company as dodgy but rather the contract. A reasonable reader would understand the difference between the two.

2.12 Referring to the “forensic investigation” that Afrirent cites that absolves it from “any wrongdoing”, Mr Sefara says: “What Afrirent doesn’t mention is that this purported clearance was done by a Department of the City of Johannesburg. Put differently, a complaint about the dodgy contract awarded by the COJ was investigated by the COJ which, unsurprisingly, found no wrong! This would be laughable if no public funds were involved here.”

2.13 With respect to the complaint about the paragraph that refers to the tender being “mired in controversy after allegations surfaced that the appointed company, Afrirent, had links with the DA’s governing partner in the City of Joburg, the EFF”, Mr Sefara says the focus of their story was the letter from the National Treasury. This paragraph provided the “context”.

“The complainant can’t deny the association with the EFF generated public interest. The Sunday World did not express an opinion about the existence of the controversy, except that there was controversy – which is a fact. What is also a fact is that Afrirent paid R500 000 to a company (labelled a front by Amabhungane) headed by a relative of the leader of the EFF shortly before Afrirent was awarded the contract by the City of Johannesburg”. [1]

Mr Sefara says this was not mentioned in their story as it was not “our story.”

2.14 Although Afrirent says it has “refuted” these claims, it has “only said that the payments to the EFF leader’s relative was unrelated to their bidding at the COJ and therefore the timing was a coincidence.”

Even if this is so, he argues, what makes a general reference to the mere existence of the controversy objectionable, especially where no view is expressed about whether the coincidence is to be believed or not?”

2.15 Afrirent’s denial that it has received benefits from any political party is immaterial. It is using the Ombud’s office “to help it deny a claim that was not made in Sunday World. And where this claim is not made, why must Afrirent be given an opportunity to deny in the Sunday World claims that may have been made elsewhere?”

2.16 Mr Sefara asks for the complaint to be dismissed.

Further arguments

2.17 In response, Mr Messina argues that the Sunday World had not provided a reasonable explanation for the use of the word “dodgy”. This word does not appear in the letter from the Treasury or “any other correspondence” which entitles it to use the word.

2.18 “More importantly,” though, the complaint also focuses on the fact that Afrirent was not “afforded an opportunity to comment on the story and no reasons were provided in the article as to why this was the case.”

The newspaper has not dealt with this aspect of the complaint at all.

In terms of Clause 1.8, which requires newspapers to contact the subjects of adverse coverage for comment, the only exceptions are “if the media is prevented from reporting or if the media is unable to obtain the subjects comments.”

In this case, these exceptions do not apply. Afrirent “was at all times available for comment” and should have been afforded the opportunity with a reasonable time to respond.”

  1. Analysis

3.1 The article in contention focused mainly on a letter from the DG of the National Treasury, Mr Dondo Mogajane, to the Mayor of the City of Johannesburg, Mr Geoff Makhubo.

3.2 This letter was provided to the Ombudsman by Mr Sefara. Its subject matter was the contract that was the subject of the article.

3.3 Among other things it said:

  • The project was included in the 2017/18 procurement plan of the city. It was estimated then to cost approximately R2 267 billion but its actual cost was   R1 255 billion indicating that “no research or analysis” was conducted.
  • There was no evidence that the Bid Specification Committee drafted the specifications on the project – no minutes were submitted to the Treasury.
  • The City of Johannesburg decided to participate in the Mogale municipality contract because its own contract for leasing vehicles was cancelled on May 18, 2018 “due to a material defect in the specification”. No reasons were given as to why this was not corrected so the tender could be re-advertised.
  • The Mogale municipality required 168 vehicles; however the CoJ required      2 732 vehicles from Afrirent meaning a “huge difference in scope” of the contract. The CoJ also rented hatchbacks, which were not part of the Mogale City contract.
  • The CoJ participated in a R100 million contract of Mogale City, whereas its own costing was for approximately R1.2 billion.
  • There was no signed contract between Mogale City and Afrirent at the time the CoJ decided to participate in the contract.
  • There were various differences between the Mogale City contract and the CoJ contract with Afrirent, including the fact that Mogale City would take ownership of the vehicles at the end of the contract.
  • Treasury advised that the contract between CoJ and Afrirent be cancelled and that a forensic investigation be conducted into it.

3.4 The Sunday World article in the main reflected the tenor of this letter. The letter is an official document from the National Treasury, which is effectively the guardian and overseer of public money.

This was thus a legitimate focus and in the public interest.

3.5 The representative for Afrirent complained about the use of the word “dodgy” in the headline.

Mr Sefara points out that it was used in relation to the contract rather than to the company.

The letter from National Treasury, outlined above, shows that indeed the contract was so questionable that it called for a forensic audit into it. It provided details of the aspects that called for scrutiny.

In the light of the letter, and also because the word “dodgy” was used in inverted commas, clearly attributing the idea to a source, the headline is reflective of the set of facts portrayed in the article.

3.6 Afrirent’s representatives also claim the article transgresses the clauses that call for truthfulness and accuracy in reporting.

As pointed out above, the article focused mainly on the facts contained in an official letter from the National Treasury to a major municipality that concerned public expenditure.

Moreover, the article – and the letter – focuses more keenly on the conduct of the City of Johannesburg than on Afrirent, so I cannot see unjustifiable reputational damage to the company in the reportage.

3.7 As far as the complaint about the contextual paragraph referencing Afrirent's purported “links” with the Democratic Alliance’s governing partner in the city, the EFF is concerned, the editor points out that this had been reported in depth in other articles.[2]

3.8 In fact, a lengthy investigative article by Amabhungane reports that: “Financial records show that as the rain was about to fall for Afrirent, it transferred R500 000 in two tranches to a company fronted by Julius Malema’s cousin but used it as a “slush fund” for the EFF and Malema.”

That article quoted Afrirent’s response in some detail: “Afrirent, however, stated via its lawyer that it had contracted Mahuna [the company in question] ‘to provide training and logistics for the delivery and implementation’ of a contract it, Afrirent, had won from the department of rural development and land reform to supply tractors and farming equipment in Limpopo.”

Afrirent provided evidence of its contracts with the department and Mahuna, saying “payments made by Afrirent to Mahuna were strictly in terms of this contract”.

Afrirent also said it “was unaware that the CEO of Mahuna was related to Mr Julius Malema and denies in the strongest terms that any monies paid by it to Mahuna … were a kickback to the EFF and/or Mr Malema”.

3.9 Mr Sefara points out that the Sunday World article did not go into these allegations in any detail, except insofar as to say it was “was mired in controversy after allegations surfaced that the appointed company, Afrirent, had links with the DA’s governing partner in the City of Joburg, the EFF.”

3.10 He argues this provided some “context” to the story”. As it had been investigated and reported in at least two publications, there is nothing untoward about this. The focus of the Sunday World article was primarily the letter from the National Treasury and this is reported on in some depth.

3.11 On the last complaint that Afrirent was not afforded an opportunity to comment: the main focus of the article was the conduct of the City of Johannesburg under the leadership of Herman Mashaba.

3.12 The paper afforded Mr Mashaba an opportunity to comment as well as the spokesperson of his successor Mr Makhubo.

3.13 However, as Afrirent was an important part of the equation of the “dodgy” contract, it is surprising that the newspaper did not approach the company, particularly as Treasury had recommended that the contract be subject to forensic investigation.

3.14 The respondent did not initially respond to the complainant’s point that its views were not sought before publication, as was pointed out by Afrirent’s lawyer. However, when asked to specifically respond to this issue, Mr Sefara submitted that Clause 1.8 does not apply to this particular news report.

3.15 He says the story focused on the views of the National Treasury about the conduct of the City of Johannesburg in awarding the contract. The DG of the Treasury did not accuse Afrirent of violating public finance management regulations. His concern was that the CoJ did not follow “established rules and procedures” when awarding the contract. Thus the subject of “critical reportage” was the city, rather than Afrirent.

Mr Sefara says the report was about “a government review of its own processes”. If Afrirent’s name had been “dented elsewhere” in reports about the contract, it should not use the Sunday World to “publicly deny…claims not directly published in our newspaper…Consequently, Afrirent’s view that it should have been heard is grossly misplaced.”

3.16 However, even if the focus was a letter from the Treasury to the CoJ, the story nonetheless concerns Afrirent as the company with whom the city contracted.

3.17 Certainly, it was at least the tangential subject of “critical reportage”. Inasmuch as the City of Johannesburg, and Mr Mashaba were afforded a right of reply, so too should Afrirent have been afforded such an opportunity.

Finding

I find the Sunday World has transgressed clause 1.8 of the Press Code. It should apologise to Afrirent for not affording it the right of reply and offer it the opportunity to comment in a reply of not more than 200 words.

The comment should be approved by the Ombudsman and be delivered to myself and the newspaper not more than seven days after the deadline for leave to appeal has passed.

The rest of the complaint is dismissed.

Sanction

Sunday World  should apologise to Afrirent for not approaching it for comment prior to publication. It should also offer it the right of reply, subject to the conditions set out above.

The apology should:

  • be published at the earliest opportunity on all the newspaper’s platforms, after the time for an application for leave to appeal has lapsed or, in the event of such an application, after that ruling;
  • refer to the complaint that was lodged with this office;
  • end with the sentence, “Visit www.presscouncil.org.za for the full finding”;
  • be published with the logo of the Press Council (attached); and
  • be prepared by the publication and be approved by me.

Appeal

The Complaints Procedures lay down that within seven working days of receipt of this decision, either party may apply for leave to appeal to the Chairperson of the SA Press Appeals Panel, Judge Bernard Ngoepe, fully setting out the grounds of appeal. He can be contacted at Khanyim@ombudsman.org.za.

Pippa Green

Press Ombudsman

September 8, 2020


[2] See the Amabhungane article cited above and https://mg.co.za/article/2020-02-21-behind-joburgs-dirty-tenders/?amp