Minister of International Relations & Co-operation Dr Naledi Pandor has lost a court bid to protect her department from incurring wasteful and fruitless expenditure stemming from a multimillion-rand land acquisition deal in New York.

The Mercury reports Pandor had approached the High Court with a view to extricate the department from a contract it entered into with Simeka Group (Pty) Ltd, which formed a joint venture with Gupta-linked Regiments Capital.

In court papers, Pandor is cited as the first applicant, while her DG and the department were named as the first and second respondents, respectively.

Other respondents were Simeka-Regiments Joint Venture, Lamascene (Pty) Ltd and Serendipity Investments SA LLC.

Regiments exited the project after the department raised concerns regarding corruption allegations involving the company in October 2017.

The companies were contracted to design, construct, operate, maintain and finance suitable offices and accommodation for a diplomatic mission in Manhattan, New York City.

The Mercury report notes the successful bidder was essentially required to identify and procure land in New York for accommodation and offices for South African diplomats.

‘The bidder would also have to design and develop the facilities as per the specifications of the department, maintain the property and act as the landlord,’ said the court papers.

The legal move by Pandor also sought to nullify the awarding of the tender and to have companies involved in the project repay an amount of $9m (about R130.68m) already disbursed by the department.

It emerged in court papers that in correspondence in October 2017, the National Treasury advised the department that the appointment of Simeka was an irregularity.

Full report in The Mercury (subscription needed)

The court blasted the department for delays in launching its bid to review its decision on the tender awarding, says a Pretoria News report.

‘The conduct of the department is unacceptable. This is apparent from the fact that the National Treasury, on 26 January 2018, actually placed the department on terms to take action in light of the irregularity they had determined. The department, in my view, was dogmatic when it did not heed the advice of the irregularity provided on 16 October 2017. In fact, it proceeded ahead as though the pronouncement by the National Treasury had not been made and that the department was correct in awarding the tender to Simeka,’ the court said.

It found that the department ‘has failed to be open, responsive, forthright and accountable, as a state organ ought to be, which seeks a self-review’.

‘In reality, what the department sought of this self-review was redemption from the stance that in awarding the tender to Simeka resulted in fruitless and wasteful expenditure. Thus, in my view, the only avenue opened to the department to avoid a fruitless and wasteful declaration was to seek the form of a self-review,’ the court said.

The department’s assertion that there were undertones of corruption on the part of Simeka due to its links with Regiments were said to be unsubstantiated.

‘Lastly, it is evident Simeka is the innocent party, having complied with its obligations in good faith. Simeka is now at the short end of the stick, due to the department seeking to avoid a declaration that it is responsible for fruitless and wasteful expenditure,’ the court said.

Full Pretoria News report