Ruling by the Press Ombud
24 June 2017
This ruling is based on the written submissions of Ms Nicole Lee Gohari, on behalf of Trillian Capital Partners, and those of Carol Paton of the Business Day newspaper.
Trillian Capital Partners (TCP) is complaining about an article in Business Day of 26 April 2017, headlined GE accuses Eskom of rigging tender – Claims contract favoured Chinese company; Politically connected Trillian supported bid. The same story also appeared on its website, headlined GE claims Eskom favoured Trillian bid – General Electric claims contract favoured Chinese company and politically connected Trillian supported bid.
The latter article was revised soon after its publication. Its new headline read, GE claims Eskom favoured Chinese firm’s bid, with backing of Trillian – General Electric has gone to court to stop the utility implementing a contract with Dongfang.
Complaint
TCP complains that, construed together (headlines and articles), the reportage was devised to impel readers to wrongly conclude that Trillian was involved in improper conduct or corruption by assisting Eskom to rig the outcome of a tender awarded to the Chinese company Dongfang.
The company also complains that the reporter did not adequately reflect the content of its responses to his questions.
Clarification
The complainant mentions several times that the journalist quoted General Electric (GE) inaccurately. This may create the impression of that company also complaining to this office.
I asked Gohari for clarification.
She confirmed that Trillian was the only complainant in this matter, explaining that GE was mentioned as it appeared as if GE had asserted that Trillian had “rigged” the bid – which would raise doubts about TCP’s integrity. “Accordingly, on 3 May 2017 Stein Scop Attorneys wrote to General Electric’s attorneys of record, Fasken Martineau … to confirm whether it, or one of its representatives, made any [such] allegations… Martineau replied … that their client had not made the assertions in question,” she added.
My adjudication will reflect this situation.
The text
The first few sentences of the articles, penned by Stephan Hofstatter and Carol Paton, said:
“General Electric has accused Eskom of rigging a tender for building a new boiler at its Duvha power station in Mpumalanga to go to Chinese state-owned company Dongfang even though its bid was R1bn more expensive than that of its rivals.
“Documents seen by Business Day show Eskom’s decision to award the contract to Dongfang Electric Corporation came just eight days after politically connected advisory firm Trillian gave its submission the thumbs up in a last-minute risk assessment of bids submitted.
“Trillian’s majority shareholder, Salim Essa, is a close associate of the Gupta family, who have a cosy relationship with President Jacob Zuma.”
On 31 August 2016, Eskom reportedly issued a Request for Proposal (RFP) “for the manufacturing, factory acceptance testing, procurement, shipping and delivery to site, installation, testing and commissioning of a pulverized coal fired boiler as part of the return to service of unit 3 at Duvha Power Station” in Mpumalanga.
The complaint in more detail
Eskom ‘influenced’
TCP complains that the articles created the false impression that Trillian, described as a “politically connected advisory firm”, had improperly influenced Eskom’s decision to award the tender to Dongfang. (The company also complains that GE did not make the allegations in the headlines – a matter I address below.)
Gohari says on 31 August 2016, Eskom announced a request for proposal (RFP) concerning unit 3 of the Duvha Power Station, which had been damaged in March of that year. The RFP was issued once Eskom’s previous contract negotiations for the appointment of a supplier to rebuild the damaged boiler had been terminated (on 27 June 2016).
She adds that on 10 March 2017, following instructions from Eskom, Trillian submitted a high-level review of the competing bids to provide an initial risk assessment on the submissions.
The tender submissions under final review, shortlisted by Eskom (and not by Trillian), were GE, Murray and Roberts / Shanghai Electric, and Dongfang.
Trillian noted, says Gohari, that the variable cost components of the bids by GE and Murray and Roberts created a substantial cost-escalation risk to Eskom over the term of the project, while Dongfang’s bid was inclusive of all cost escalations. “In other words, while the bid price was higher, it posed a considerably smaller risk as far as cost escalation was concerned,” she explains.
Trillian also took into account various external risks associated with the project.
She adds, “… [the] bids submitted by both General Electric and Murray and Roberts … had higher variable costs. Dongfang’s bid, on the other hand, mitigated this risk by tendering a fixed cost, fully inclusive of all escalation, which, in turn, would minimize uncertainty and would render Eskom less vulnerable.”
Gohari says Trillian emphasised that it was unable to express an opinion in this regard. “This is indicative of the fact that Trillian did not at any juncture portray that the cost-benefit analysis that it had conducted for Eskom was conclusive or that it was a thorough investigation. Rather, it emphasised that it was based on certain un-interrogated assumptions and that, owing to time constraints, it was unable to express a fully informed or final view.”
The review, she submits, merely highlighted the risks associated with the various bids – Eskom retained the ultimate decision over the awarding of the tender.
Headlines
In general, Trillian complains that the headlines created a false, misleading and sensational bias in readers’ minds.
More specifically, TCP says that the:
· sub-headline of the first article created the impression that because Trillian was “politically connected” and “supported [the] bid”, Eskom rigged the tender;
· headline of the second article:
o created the false impression that Trillian bid for the tender (while it merely performed a review of coal-fired boiler tenders for Eskom);
o was not reflected in the body of the story – the only connection to Trillian was in reporting that the decision to award the contract to Dongfang came “just eight days after politically connected advisory firm Trillian gave its submissions the thumbs up in a last-minute risk assessment of bids submitted”;
· headline of the revised second article created the false impression that Trillian influenced and directed Eskom’s decision to award the contract to Dongfang.
Gohari says the headlines ascribed to GE allegations that cast a negative light on the reputation and integrity of Trillian.
Accordingly, Stein Scop Attorneys directed a letter to GE, asking it to confirm whether it, or one of its representatives, communicated this information to Business Day or to one of its reporters, and if so, to indicate the source of that false information.
GE’s attorneys of record, Fasken Martineau, denied any such assertions.
She submits that the journalists had not contacted GE for comment or verification of this allegation. In failing to do so, it failed to report truthfully and accurately.
She concludes, “No case can be made that the headlines are nevertheless reasonable. The headlines … create a false, grossly misleading and sensational bias in readers’ minds before they even begin to read the [articles].”
Not adequately reflecting TCP’s responses
TCP complains that Hofstatter did not adequately reflect the content of its responses to his questions.
Gohari argues that, consequently, the stories wrongly implied that Eskom’s decision to award the tender to Dongfang was as a result of the support and backing of “politically connected Trillian”.
She continues, “Construed together, those allegations are devised to impel readers to conclude that Trillian was involved in improper conduct or corruption through having assisted Eskom to rig the outcome of the tender. The impression of corruption the Articles create in readers’ minds is simply not the truth. The truth is that Trillian was not involved in the tender process and, furthermore, had no prior knowledge of or relationship with Dongfang. Mr Neethling (Trevor Neethling, Trillian’s media consultant) made it very clear in his response to Mr Hofstatter that Trillian was tasked to produce a ‘high-level cost-benefit analysis’ and that Trillian was not appointed to find a supplier to construct the Duvha boiler. The contents of the Articles are thus a clear distortion of the truth.”
She adds that the reportage has caused considerable harm to the reputation of Trillian, as the general reader would have accepted the abovementioned impressions, tainting her or his perception of the company.
Relief sought
Gohari says TCP seeks the publication of the following text on the front page of the newspaper, as well as in the news section on BD’s website:
“On 26 April, this newspaper published two articles online entitled ‘GE claims Eskom favoured Trillian bid’ and ‘GE claims Eskom favoured Chinese firm’s bid, with backing of Trillian’.
“In addition to the online publications, an article was published on the front page of Business Day newspaper, as well as online, entitled ‘GE accuses Eskom of Rigging Tender’.
“These articles were fundamentally unfair and contained a series of false allegations. General Electrics never made such accusations against Trillian. In fact, Trillian was not responsible for the bid being awarded to Chinese firm, Dongfang, but rather Trillian’s was merely tasked with producing a high-level cost-benefit analysis.
“There is nothing to indicate that Trillian had any influence over Eskom’s decision to award the bid to Dongfang and nothing to indicate that Trillian had any connection to Dongfang.
“The truth is that Trillian’s role was merely to provide Eskom a high-level cost-benefit analysis and never to provide Eskom with a directive of which company should be awarded the bid. Trillian even asserted in the relevant analysis that the document does ‘not profess to offer any opinion on the decision’.
“The Business Day apologises to Trillian Capital Partners.”
Business Day responds
GE’s affidavit
Paton says the articles were sourced from an affidavit lodged by GE in the Johannesburg High Court in April 2017, in which the company asked the court to set aside Eskom’s tender award for the Duvha boiler on the grounds that it was “impermissibly” and “unlawfully” awarded.
She states this affidavit set out in great detail the process that Eskom had outlined for the Duvha boiler tender, arguing that Eskom has violated its own processes in awarding the tender to Dongfang. Eskom had outlined a clear process whereby two top bids would be selected, followed by negotiations with the bidders.
The journalist submits, “The two shortlisted companies were GE and Murray and Roberts. Dongfang was not on the list but was awarded the tender.”
In addition, Paton says, Trillian’s report (to the acting GM of Eskom Group Sourcing, Mr Charles Kalima, dated 23 March, which provided “a high level review” of the various bids for the boiler) showed that “[prior] to Eskom making a decision on the boiler it requested Trillian to evaluate the bids. Immediately after receiving the report a decision was made to award the tender to Dongfang”.
Citing the GE document as saying that awarding the contract to Dongfang was “highly suspicious”, Paton comes to the conclusion that, “At the very least it gives rise to a reasonable apprehension of bias in favour of Dongfang Electric on the part of Eskom.”
‘Improperly influenced’
The article reads: “Documents seen by Business Day show Eskom’s decision to award the contract to Dongfang Electric Corporation came just eight days after politically connected advisory firm Trillian gave its submission the thumbs up in a last-minute risk assessment of bids submitted.”
Paton replies the article did not state that Trillian’s report “improperly influenced Eskom’s decision” – rather, it presented the chronology of Eskom’s decision-making on the Duvha tender. She argues, “Prior to receiving the Trillian report, Eskom had not made a decision on the tender, even though it was way over its own timelines for the process. Eight days after receiving the Trillian report a decision was made. The decision coincided with the Trillian recommendation.”
Headlines
First article
Paton says GE clearly believed that Eskom had rigged the tender – which constituted its motivation for taking the matter on review; its affidavit also made it clear GE believed Dongfang was favoured.
She argues it is common cause that Trillian is politically connected – a statement the company does not deny. “This assertion comes after a widely reported incident related to the firing of cabinet minister Nhlanhla Nene of which it is clear from documentary evidence that CEO of Trillian Eric Wood had prior knowledge. That Trillian supported Dongfang’s bid is clear from the 23 March report,” she states.
Second article
Paton says GE claimed that Eskom supported the Dongfang bid – which Trillian advised in its report as being the least risky.
However, she adds, as this was open to misinterpretation the headline was changed within three hours of going up on the internet – which means that this part of the complaint has been remedied.
Paton argues that, while GE did not directly accuse Eskom of rigging the tender, it was an accurate summation of its affidavit, which has been lodged for the explicit and only reason that GE suspects wrong-doing.
Not adequately reflecting TCP’s responses
Paton says the newspaper asked Eskom, Trillian and GE for comment. The latter declined to comment on the record, while Eskom and Trillian responded – “and their views were included in the article”.
She adds the articles did not claim, as Trillian makes out, that the company had been tasked to source the Duvha boiler, neither did they claim that Trillian evaluated the tenders as part of the formal tender process. “It shares Mr Neethling’s view that Trillian produced a report on the bids,” she says.
The reporter adds the articles stated that Trillian’s risk assessment gave Dongfang the thumbs-up. Out of the three bids Trillian evaluated, Dongfang was deemed to be the least risky. “This is clearly stated in its report,” she says.
Trillian replies
Citing the newspaper’s argument about GE’s affidavit and Eskom having outlined a clear process whereby two top bids would be selected, followed by negotiations with the bidders, Gohari argues that by its own admission, BD acknowledges that GE’s dispute lies against Eskom and not Trillian, in that it was Eskom that allegedly unlawfully awarded the tender to Dongfang.
She also notes that GE did not cite Trillian as a respondent in its application to court – in fact, its name is not even mentioned in the application. This, she argues, shows GE did not believe that Trillian had been involved in awarding the tender to Dongfang.
Instead, she submits, Eskom provided the names of the tenderers to Trillian for review – Trillian was not part of the tender process and was in no way privy to any formal contract negotiations between Eskom and any of the tenderers, nor was Trillian involved in the shortlisting of the suppliers.
Improperly influenced
Gohari says although the article did not directly state that Trillian’s report had improperly influenced Eskom’s decision, the reasonable reader would infer that the company had a role in the awarding of the tender to Dongfang in giving the “thumbs up” to Dongfang.
She adds that, in its review, Trillian made it clear that “this report serves to provide an initial high level overview on the competing bids….”, and that the review was based on “declarations as provided by Charles Kalima”.
Headlines
Second article
Gohari says although the headline of the second article was changed, it was done three hours after it was published – without an apology for the original wording. BD also did not state in the first and third articles that the headline had changed.
“Accordingly, many readers who read the online publications would have seen the second and third articles’ headlines and would have indeed misinterpreted the meaning of such headlines and inferred that Trillian was involved in corruption in rigging of the tender,” she argues.
Regarding the GE application, Gohari says it made no allegations that Eskom was in any way influenced by Trillian’s review, nor did GE even refer to that review. She says, “On its own account, General Electric states in papers in the application that “[a]t the very least it gives rise to a reasonable apprehension of bias in favour of Dongfang Electric on the part of Eskom.” [Gohari’s emphasis]
Moreover, in the letters exchanged between Stein Scop Attorneys Incorporated and Martineau (“TCP8” and “TCP9”), it is evident that GE did not make any of the allegations in question to Business Day or to any of its reporters, says Gohari.
‘Thumbs-up’
Gohari says that nowhere in its review did Trillian give Dongfang the “thumbs-up” (meaning an indication of satisfaction or approval).
She submits that Trillian took into account various factors when reviewing the three tender submissions by highlighting potential risk and benefit considerations.
“Notwithstanding the fact that Trillian noted that the bid price of Dongfang was higher, Trillian stated that it posed a considerably smaller risk as far as cost escalation was concerned.”
She adds that Trillian emphasised in its complaint that the review merely highlighted the risks associated with the various bids – Eskom retained the ultimate decision over the awarding of the tender.
Analysis
Influenced to award tender to Dongfang
The crux of the complaint is that the article created the false impression that Trillian was somehow responsible for Eskom’s decision to award the contract to Dongfang, or that it influenced Eskom in its decision. TCP’s basic argument is that Trillian was not asked for, and did not give a directive in this regard, but that it merely provided an analysis and did not even express an opinion on that.
I note Gohari’s assertion that GE denied making accusatory statements about Trillian. However, GE was free to complain to this office about that. I need to look at BD’s focus, namely GE’s court application, specifically the affidavit by GE’s head of sub-Saharan Africa, Mr George Njenga (on which, BD says, the story was based).
Citing this document, Paton correctly remarks that:
· GE asked the court to set aside Eskom’s tender award to Dongfang;
· GE argued that Eskom violated its own processes in this regard;
· Eskom’s RFP provided for the shortlisting of only two bidders, to be followed by negotiations with the bidders;
· The two companies on the shortlist were GE and Murray and Roberts; and
· Dongfang was not on the list, but was awarded the tender.
From this, Paton concludes it was reasonable to believe Eskom had been biased in favour of Dongfang. This may or may not be correct, but it falls outside Trillian’s complaint and therefore cannot form part of my adjudication – the complainant is not Eskom, but Trillian.
A careful reading of the Njenga document reveals that GE did not mention Trillian at all, and neither did it refer to any “analysis” (by TCP); I also note that Paton does not assert any such reference or inference either.
On the narrow basis of only that document, therefore, there was no justification for BD to link Trillian to Eskom’s decision to award the contract to Dongfang. To phrase it more carefully: While BD clearly based the rest of its article on the Njenga court document, it could not have done so with regards to Trillian.
This means the journalists had to have another reason for bringing Trillian into the picture.
I presume that is why Paton reverts to Trillian’s report (its “high level review” of the various bids for the boiler) to Eskom, from which she argues that prior to Eskom making a decision on the boiler, it requested Trillian to evaluate the bids – noting that immediately after receiving the report, Eskom awarded the tender to Dongfang.
This now puts TCP’s “initial high level overview” on the table.
In this document Trillian analysed three bidders (GE, M & R, and Dongfang). It follows that TCP did not choose the bidders – that was Eskom’s decision.
The overview started off with the following comparisons:
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GE |
M&R |
Dongfang |
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Bid price: R3 027 306340 Bid carries 25% fixed and 75% variable cost escalation risk to Eskom Bid has been modelled via Eskom CPA process
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Bid price: R3 299 784 042
Bid carries 10% fixed and 90% variable cost escalation risk to Eskom
Bid has been modelled via Eskom CPA process
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Bid price: $290 000 000 (R4 000 000 000)
Bid price is fixed with no escalations
Price to be secured in Rands by Eskom upon acceptance |
The focus of this information is (a) the bid and (b) escalation risks. Trillian did indeed emphasize that its report had been based on its considerations of external risks associated with the project, including currency volatility, inflation, delays and extensions to the project, and rate and resources increases.
It is now important to note the following quotes from the report:
· “The currency risk of the DF bid can be fully hedged out at inception, providing Eskom with a fixed price in ZAR at inception, whereas the GE and MR bids create substantial unhedged currency risk to Eskom over the life of the project as the variable costs become realized”;
· “In an environment where cost escalations are entirely borne by the purchaser of the project, the supplier is completely de-risked, transferring the full accountability of unexpected events onto the purchaser”;
· “By transferring all escalation costs to Eskom, the suppliers have in effect created a risk free environment with no consequence to themselves in the event of external events that affect the project”; and
· “Another consideration that cannot be ignored is the consequential effect of an open ended purchase on the fundability of a project. Should Eskom wish to raise funding for the Duvha project, funders will need to have an accurate assessment of the cost projections of the project in order to evaluate the funding requirements, the project risk and thereby the rates at which the project should be funded. The higher the perceived project cost risk, the higher the yield that funders will require to fund the project. This could impact the overall cost of funding of the Duvha project.”
The document ends with the following conclusion and disclaimer:
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Some observations on these quotes:
· It is true, as Gohari points out, that Trillian emphasised it was unable to express a fully informed or final opinion in this regard, and that it highlighted the risks associated with the various bids.
· However, it is not true that TCP “merely” highlighted the risks (as she argues) – the four quotations from its report, bulleted above, clearly show favour for Dongfang in that it was pointed out that the risk Eskom would be facing with that company would be much lower than with GE and M&R.
· This is in line with its conclusion, not quoted by Gohari, which stated:
o “Whilst this document is in no way a comprehensive review of the three bids, nor are we able to express an informed opinion, it is possible to make some informed decisions based upon the risks highlighted above” (emphasis added); and
o “It is apparent that there are a number of potential unquantifiable risks implicit in accepting an open ended bid with full escalation risk being borne by the project funder. A fixed cost project provides far greater certainty regarding commitment of cash flows, ability to hedge exposures and fundability of the project. Although the DF bid is dollar denominated, it is possible to hedge the entire dollar component thereby providing a Rand denominated fixed cost project.”
· Trillian also said in its conclusion, “The ultimate decision revolves around Eskom’s appetite to bear the risks as outlined above as opposed to eliminating the risks upfront and have a clear picture of the finance commitment. The financial consequences of a de facto market position cannot be ignored in this process” – but that spoke for itself. The fact that it was Eskom, and not Trillian, making the decision does not deter from the other fact, namely that Trillian did show favour for Dongfang (whether rightly or wrongly does not form part of this adjudication).
I am now in a position to focus on the ultimate question, namely whether the reportage was devised to impel readers to conclude that Trillian was involved in improper conduct or corruption by assisting Eskom to rig the outcome of the tender.
The main bone of contention in the story is the statement that Trillian gave the “thumbs up” to Dongfang in its review.
After Trillian underlined the importance of minimising risks, and after stating that GE’s and M&R’s bids created “substantial unhedged currency risk to Eskom”, as opposed to Dongfang (to mention but one example from the review), as well as the difficulties Eskom would face should it wish to raise funding for the project without an accurate assessment of the cost projections, it comes as no surprise that BD came to the same conclusion I did – that Trillian (notwithstanding the fact that it did not state such in so many words, that it inserted a disclaimer, and that it said it could not put forward its views), nevertheless intimated that Dongfang presented, by far, the lower risk.
And therefore…
I agree that the use of the phrase “thumbs up” was a little strong – but I do not believe it was strong enough to constitute a breach of the Code of Ethics and Conduct.
Moreover, the rest of the article adequately reflected the content of GE’s affidavit, as well as some of Trillian’s comments on this issue.
Having taken all of the above facts and arguments into account, I do not believe that the article(s) impelled readers to wrongly conclude that Trillian was involved in improper conduct or corruption by assisting Eskom to rig the outcome of a tender.
It is an established principle that a publication cannot be held liable for conclusions drawn by some readers if the statements complained about are factually correct.
Headlines
First article
The main headline stated, “GE accuses Eskom of rigging tender”. Given GE’s court application to set aside Eskom’s tender award to Dongfang, and especially given the reasons put forward in that application, I cannot blame BD for the statement in this headline.
There were two sub-headlines:
· Claims contract favoured Chinese company; and
· Politically connected Trillian supported bid.
I have already argued that the words “thumbs up” in the article did put some spin on this ball – but not to such an extent that it can be considered to be in breach of the Code. The same argument is valid with regard to the headlines – which goes for the use of the word “supported” as well.
There was no complaint about the words “politically connected”.
Second story; two headlines
The first headline (GE claims Eskom favoured Trillian bid – General Electric claims contract favoured Chinese company; Politically connected Trillian supported bid) was changed to the more acceptable, GE claims Eskom favoured Chinese firm’s bid, with backing of Trillian – General Electric has gone to court to stop the utility implementing a contract with Dongfang.
Again, the same argument goes for the second headline. I accept that BD changed the first headline, and leave it at that.
Not adequately reflecting TCP’s responses
The question is whether Hofstatter, who asked Trillian for comment, adequately reflected the content of TCP’s responses to his questions.
The relevant communication
On 24 April 2017, Hofstatter directed an e-mail message to Trillian’s media consultant, Mr Trevor Neethling of GRIT Communication, informing him that he was writing a story to be published in BD that week, about Eskom’s procurement of a new boiler for its Duvha power station. He stated that he had been “informed that Eskom had requested Trillian Capital Partners to evaluate the bids for the tender”. Therefore he had some questions for Trillian before the article was published.
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Hofstatter’s questions |
Neethling’s answers |
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No – TCP was tasked to produce a high-level cost-benefit analysis over a two-day period; and the company was not part of the tender-evaluation team (only Eskom could perform that role). |
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TCP was not appointed to find a supplier to construct the Duvha boiler; and the M&G did not produce such a document to the company.
|
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TCP intended to submit a proposal together with a Chinese company, Hypec. The tender was subsequently cancelled and TCP did not submit another proposal when the tender was re-issued; again, the M&G did not present TCP with such a document. |
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TCP had no knowledge of Dongfang and had no relationship with it. |
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TCP was not involved in a conflict of interest; and it did not source any of the suppliers to Eskom. |
Neethling also responded to follow-up questions, mostly dealing with possible Gupta connections, saying:
I have numbered the questions and answers to facilitate the adjudication.
My task, now, is to ascertain whether the story reflected the essence of Neethling’s responses.
It should be noted that a newspaper cannot be held to account for not reporting all responses – it is in the very nature of newsworthiness that journalists have to prioritize information according to public importance. Therefore, I am not checking whether Hofstatter reported all of Neethling’s responses – I am only interested in the question of whether he omitted material information.
Hofstatter did use the responses to questions 1, 3 and 6, but not those to questions 2, 4, 5, 7 and 8.
The response to question 2 was particularly important, as Hofstatter did mention the issue in the article – he reported the M&G article stating that TCP had been appointed by Eskom in 2016 to find a supplier to replace a broken boiler.
The question is not whether Eskom did or did not make this appointment, or whether the M&G did or did not report this matter correctly; the issue is that this particular reportage could have damaged TCP’s reputation – and therefore Hofstatter should have reported Neethling’s denial that the company had been appointed to find a supplier.
Answers 4 and 5 are closely linked to the previous issue, and should therefore also have been reported.
If Hofstatter had reported TCP’s denial that it had been appointed to find a supplier, an argument could have been made that the other answers were implied in the denial – but that did not happen.
The omission of the mentioned responses was unfair to Trillian, as it could have contributed to unnecessary tarnishing of its reputation.
I do not blame BD for not reporting answers 7 and 8, as the story mentioned the Guptas only in passing, and the gist of the story was not about the possible influence of that family on the main issues raised.
Conclusions
The time has come to tie all the loose ends together.
This adjudication is much more complicated than meets the eye – the fact that I am dismissing the complaints about the “thumbs up” statement in the article and about the headline stating that Trillian supported Dongfang’s bid, does not per definition exonerate BD in toto.
It happens from time to time that a story is unfair not so much in what it reports, but rather in what it omits. In this case, though, another factor also comes into play.
The story referred to an M&G article which stated that Trillian had been appointed to find a supplier to replace a defunct boiler. The importance of this reference cannot be over-emphasised – this sudden insertion put a whole new slant on the story. The implication, clearly, was that TCP might have identified Dongfang for the contract, and therefore also that it might have been involved in a conflict of interest.
Hence Hofstatter’s questions to Trillian in this regard.
Suddenly, it might have dawned on the reader that TCP’s support for Dongfang was not that innocent – there was a sting to the otherwise justifiable statements about Trillian having favoured Dongfang.
That is precisely the reason why Hofstatter should have recorded Trillian’s denials that it had been appointed by Eskom to find a supplier to replace a broken boiler, that it had any prior knowledge of or relationship with Dongfang and therefore did not identify that company for the job, and its denial that it had been involved in a conflict of interest (by evaluating a sort-listed bidder after sourcing the very same bidder).
Moreover, the sentence which raised the suspicion of corruption did not stand on its own – the reference to TCP’s majority shareholder, Mr Salim Essa, as having been a close associate of the Gupta family, planted another seed of suspicion.
Meanwhile, the reference to Trillian’s planned submission of a proposal with the Chinese firm Hypec cannot serve as mitigation, as it was clearly stated that this happened in a previous bidding round, and that that tender had been cancelled.
Dongfang was therefore still “in play”.
Please note: I am not for one moment saying that Trillian is innocent (or guilty, for that matter) – that falls squarely outside my mandate. The question, also, is not whether Hofstatter was justified to refer to the article in the M&G, or to Essa’s links with the Gupta family – of course he was.
The problem lies with the seeds of suspicion of corruption he sowed without recording Trillian’s explicit denials to this effect.
In other words, the final question of whether the omissions, as cited above, could have impelled readers to conclude that Trillian might have been involved in improper conduct or corruption should be answered in the affirmative.
Finding
Influenced to award tender to Dongfang
This part of the complaint is dismissed.
Headlines
This part of the complaint is dismissed.
Not adequately reflecting TCP’s responses
Hofstatter neglected to report Trillian’s denial that it had:
· been appointed by Eskom to find a supplier to replace a broken boiler;
· any prior knowledge of or relationship with Dongfang and therefore did not identify that company for the job; and
· been involved in a conflict of interest (for evaluating a sort-listed bidder after sourcing that bidder).
The omissions represented information material to Trillian and they could unnecessarily have tarnished its reputation; therefore the omissions were in breach of the following sections of the Code of Ethics and Conduct:
· 1.1: “The media shall take care to report news … fairly”;
· 1.2: “News shall be presented in context and in a balanced manner, without any intentional or negligent departure from the facts whether by … material omissions …”; and
· 3.3: “The media shall exercise care and consideration in matters involving … reputation …”
Seriousness of breaches
Under the headline Hierarchy of sanctions, Section 8 of the Complaints Procedures distinguishes between minor breaches (Tier 1 – minor errors which do not change the thrust of the story), serious breaches (Tier 2), and serious misconduct (Tier 3).
The breaches of the Code of Ethics and Conduct as indicated above are all Tier 2 offences.
Sanction
Business Day is directed to apologise to Trillian Capital Partners for:
· neglecting to report its denial that it had:
o been appointed by Eskom to find a supplier to replace a broken boiler;
o any prior knowledge of or relationship with Dongfang, which implied that it had not identified that company for the contract;
o been involved in a conflict of interest (by evaluating a sort-listed bidder after sourcing that bidder); and
· in this process, creating the impression that Trillian might have been involved in improper conduct or corruption.
The text should:
· be published:
o on the same page as that used for the offending article;
o online, in the same space where the offending article was carried;
The headlines should contain the words “apology” or “apologises”, and “Trillian”.
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.
Johan Retief
Press Ombud