Dovepire dodges blacklisting bullet

The Insurance Sector Education and Training Authority’s (Inseta’s) bid to have the National Treasury blacklist property firm Dovepire from getting state tenders for a period of 10 years on allegations of tender irregularities has failed — for now.

Inseta, whose mandate is to grow the pool and quality of critical and scarce skills within the insurance sector, had written to Dovepire, its landlord, to make representations to show cause why it should not be blacklisted or restricted by the Treasury from conducting business with an organ of state for a period not exceeding 10 years. 

This action followed a forensic investigation conducted by Inseta to determine the tender process for the lease agreement after the contract was flagged by the auditor-general.

Inseta has been Dovepire’s tenant since 2013 at its property in Empire Road, Parktown, Johannesburg under various leases.

In 2018, Dovepire and Inseta concluded a new written lease agreement which began in March and terminated on March 31 2020. In terms of the 2018 lease agreement, Inseta was given an option to renew the agreement for a further period of 24 calendar months on the same terms, at a rental agreed to by both parties. If Inseta wished to exercise this option, it was required to furnish Dovepire with written notice of at least six calendar months before the expiry of the lease period.

Inseta did not exercise the renewal option, but indicated to Dovepire that it would issue a new tender for a five-year lease. On March 26 2020, the parties concluded a written lease agreement pursuant to a public tender process relating to the very same premises as those governed by the 2018 lease agreement.

The lease agreement was for a period of five years. However, in December 2021, Inseta wrote to Dovepire and informed it had launched an investigation to probe allegations against an “employee or other role player of fraud, corruption, favouritism, unfair or irregular practices or failure to comply with the policy and take appropriate steps against such employee or role­ player when justified”.

It further advised that the process might lead it to cancel a contract awarded to a “person if the person concerned committed any corrupt or fraudulent act during the bidding process.”

The Inseta probe concluded that the tender process was intended to create a false legal basis to award a new five-year lease agreement to Dovepire so that it would remain in the same premises.

Inseta said based on its investigation, it had come to the conclusion that it was in law entitled to cancel the lease agreement and gave Dovepire  12 months’ notice to cancel the lease agreement.

Dovepire in a letter dated December 13 2021 wrote back to Inseta and rejected the repudiation of the 2020 lease agreement and denied all allegations of wrongdoing during the tender process.  The company also hit out at threats to blacklist it. Dovepire approached the court for relief after the parties could not find each other.

Judge Maletsatsi Mahalelo on Wednesday ruled in Dovepire’s favour, granting it an interim interdict until the finalisation of the main case where Dovepire is expected to seek permanent relief.

“I am satisfied that if the interim relief is not granted, the applicant [Dovepire] stands to suffer irreparable harm. The applicant has spent a significant amount of time and money and gone to great lengths to implement the 2020 lease agreement. If the applicant is not granted interim relief, it will suffer irreparable harm not only through lost income, but also through the reputational damage that it will undoubtedly suffer by being endorsed on the register of tender defaulters,” the judgment reads.

“The harm that would be suffered by the applicant by being named on the register is manifest and would certainly materially affect its ability to earn an income as a commercial property lessor. For the respondent to suggest otherwise, is disingenuous.”

khumalok@businesslive.co.za