Security company loses first round in tender war against state-capture linked company

The Western Cape High Court has dismissed Part A of an application to interdict a state-capture-connected company’s controversial contract with the province’s Infrastructure Department. The company, Royal Security, which is linked to Durban businessperson Roy Moodley, received a R282 million security contract from the department. The company was among those flagged in the State Capture Commission’s report.

Seal Security, a rival bidder that failed to win the two-year security services contract at properties owned by the provincial government, made allegations of serious irregularities in the tender process. In Part A of its application, Seal Security wanted the department interdicted from appointing Royal Security while in Part B of its application, which is still to be decided upon, it wanted the court to set aside the tender decision to appoint Royal Security as the successful bidder.

In its court arguments, Seal Security alleged that Royal Security did not have the adequate resources at its Cape Town offices to render the services it had tendered for. Until a ruling is made on Part B, the status quo remains, and Royal Security will continue providing security services. Infrastructure MEC Tertuis Simmers told the Cape Argus his department could not comment on the ruling. “Due to the matter not being finalised and Part B still to be heard before the court, we cannot give comment on the sub-judice matter.”

The issue of the tender was brought up in the provincial legislature by opposition MPLs following the publication of a Daily Maverick article about it. The MPLs wanted to know why the province was doing business with companies allegedly involved in crime and corruption. Following the uproar in the House, Premier Alan Winde said: “We cannot be in a position where government tenders are being used to launder dirty money.

“But simultaneously, we are a government that respects and promotes the rule of law, and that means that we all have the right to be treated as innocent until proven guilty.” Winde, however, promised to contact the National Prosecuting Authority, the Justice Ministry, the National Treasury and the SAPS about the revelation that a business linked to state capture won a tender from his administration.

ActionSA provincial chairperson Michelle Wasserman said she would write to the National Treasury to blacklist all businesses and individuals implicated in state capture after the issue emerged. Wasserman said: “We beseech the National Treasury to blacklist any company that stands accused of profiteering from state capture activities.”

She said the party would monitor the province in this regard and ensure that no companies implicated in state capture can benefit from government tenders.