Ruling by the Press Ombud
23 June 2016
This ruling is based on the written submissions of Ms Hielien Venter in her capacity as senior legal counsel to Aecom (a tender-implementing agent), and those of the editor of the Cape Times newspaper, Aneez Salie.
Aecom is complaining about two articles in Cape Times of 29 April and 2 May 2016 respectively, headlined Bid to liquidate tender agency – Aecom faces liquidation the same way Filcon did, and Aecom refutes construction firm’s claims.
Complaint
Aecom complains that the first article:
· falsely suggested that it was factually insolvent;
· falsely left the distinct impression that Aecom was involved in fraud and tender irregularities; and
· neglected to include its comment, as contained in an answering affidavit.
It also complains that the second story perpetuated the mistakes made in the first one.
The texts
Both articles were written by Carlo Petersen.
The first one said that a local construction company, Good Hope Construction (GHC), had filed an application in the Gauteng High Court seeking a final court order to liquidate Aecom – “one of the City’s main tender-implementing Agents” – for mismanagement and failure to pay R8 million.
This reportedly came after Aecom contracted GHC to refurbish City-owned flats in Manenberg, but failed to pay GHC after the City cancelled its contract with Aecom in August last year.
The story cited some of the content of GHC’s founding affidavit.
Petersen added that Aecom had employed Filcon Projects in 2014, and that Filcon filed for business rescue after facing more than ten liquidation applications dating back to 2010. “Aecom faces liquidation the same way Falcon did in 2014 when it was declared insolvent after being linked to fraud and tender irregularities.”
In the second article Petersen reported that Aecom had “hit back” at GHC, rubbishing its claims that Aecom had failed to pay for work done.
He wrote that Aecom chief executive Alex Du Plessis Le Grange had disputed GHC’s claim in an answering affidavit, saying his company would oppose the application for its liquidation.
The journalist quoted Le Grange as saying that Aecom owed GHC R6 225 537.18, not R7 896 242.18.
Le Grange reportedly said that the contract work had not been completed, and that the contract still existed, adding, “GHC is, therefore, not entitled to recover any of the retention monies from Aecom.
The reporter stated, “Aecom faces liquidation the same way Filcon did in 2014, when it was declared insolvent after being linked to fraud and tender irregularities in a R400 million provincial housing project.”
The arguments
Venter says the purpose of the first article apparently was to inform the public that Good Hope Construction (GHC) had launched an application for Aecom’s liquidation. However, it took the matter further “in a manner not in accordance with the Press Code”.
She says in this story it was recognized that the liquidation application was brought against Aecom on the grounds that it had been unable to pay its debts in terms of certain provisions of the Companies Act – and yet, the report also suggested that Aecom was in fact insolvent, meaning that its liabilities had exceeded its assets (called “factual insolvency”).
She argues that there is a significant legal and practical distinction between “commercial insolvency” and “factual insolvency”. This story, when read as a whole, “tends to blur this critical distinction…”
Venter notes that Aecom, in its answering affidavit, disputed the allegation that some debt was due. This document was signed on 2 February 2016 (almost two months prior to the publication of the first story) and yet, the story did not refer these Aecom responses.
Moreover, the story left the distinct impression that Aecom was involved in fraud and tender irregularities – it suggested that the liquidation proceedings brought against Aecom were analogous to those of Filcon (which had been linked to fraud and tender irregularities).
“This insinuation is then taken further by the reference to ‘mismanagement’ by AECOM … and the description of AECOM as ‘the city’s main tender implementing agents’.” Venter adds that the caption had the same effect.
In conclusion, Venter says the liquidation attempt launched by GHC was founded on a single allegation, namely that Aecom was unable to pay debts allegedly due (an allegation disputed by Aecom).
She says the journalist coloured his story so as to unfairly associate the Aecom liquidation application with the scandal which surrounded Filcon’s liquidation. “The language used … is designed simply to charge the atmosphere for an ulterior motive. It is simply not an accurate reflection of the surrounding factual circumstances or the allegations contained in the relevant court papers.”
Regarding the second article, Venter says that although it presented extracts from Aecom’s answering affidavit “it reiterates the false association with the Filcon liquidation leaving the reader with an inaccurate and misleading understanding of the surrounding factual circumstances”. Therefore, the second story did “little to correct the scurrilous and vexatious comments made” in the first article.
Salie replies that the stories were largely based on court papers (summonses and affidavits of the parties involved in the matter) and this was done truthfully, accurately and fairly.
He adds that the:
· Cape Times presented the news in context and in a balanced manner as both articles contained information widely published throughout the country;
· newspaper gave Aecom a chance to respond and have its view published (in respect of the first article) – it published a second article from Aecom’s perspective, “remaining true to the facts of the story, after receiving AECOM's answering affidavit to the matter”; and
· matter was in the public interest as it involved companies responsible for the maintenance and construction of people’s homes.
Analysis
It is problematic that the editor did not specifically address the complaint – instead, he confined himself to general statements. That is not helpful.
Be that as it may, my first question is whether the articles had falsely suggested that Aecom was factually insolvent.
I respectfully disagree with the company in this regard. The text in dispute consistently made it clear that there was an application for liquidation, which implied that Aecom had not been liquidated at the time of publication. There is nothing in that story which suggested otherwise.
This was also reflected in both the headline and the sub-headline.
The question whether the story linked Aecom to fraud and tender irregularities is slightly more complex. I quote the relevant sentence: “Aecom faces liquidation the same way Filcon did in 2014 when it was declared insolvent after being linked to fraud and tender irregularities.”
When read in isolation, one can interpret this in more than one way – one can either say the sentence merely stated that Aecom also faced liquidation (as Filcon did) and maintain it did not say anything more than that, or one can submit that it linked Aecom to fraud and tender irregularities (with which Filcon was linked).
Such a sentence is problematic, for the reason given above – especially the words “the same way”.
In order to come to a meaningful finding, one should therefore continue reading to determine the context – which one of these two interpretations does the context support?
The rest of the story continued as follows:
· Aecom contracted H&I and GHC;
· H&I hired construction company Robdyl, owned by former gang boss Rashied Staggie’s right hand man Rollen “Watson” Olince, as a security provider;
· The move sparked a massive gang war, further delaying the project;
· Cape Town’s mayoral committee member responsible for human settlements, Benedicta van Minnen, instructed Aecom to “remedy the breach” as Robdyl was not a registered security company;
· Van Minnen said the City refused a claim from Aecom for additional time and expenses to complete the project despite its assurance that Robdyl’s services had been terminated; and
· She said, “In terms of Aecom and the City, the City cancelled the contract with Aecom during August 2015 after it refused to return to site to continue work on the project in Manenberg.”
From this, there is nothing to support the claim that the story accused Aecom of fraud and tender irregularities – Aecom had not hired Robdyl, and there is no reference or even a suggestion to the effect that the former had been involved in anything illegal.
I agree, though, that the sentence in dispute was clumsy because it could be interpreted in more than one way and the words “the same way” could have led to a misinterpretation (if read in isolation).
It is true that the first story did not refer to Aecom’s answering affidavit – but the second one did, and quite extensively so.
The complaint was submitted as one, and I have treated it as such. Therefore, given that the second story did make up for the lapse in the first one (in which Aecom’s answering affidavit did not feature), I can only come to one conclusion.
Finding
The complaint is dismissed.
Appeal
Our 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