Fresh legal battle over lottery

The war over the licence to operate the national lottery is set to return to the courts after Trade and Industry Minister Rob Davies signed another contract with the winning bidder, Ithuba.

The R400 million-a-year contract has been the subject of a tug-of-war between Davies and Gidani, which operated the lottery until it was awarded to Ithuba last year. It took a different turn on Friday when Davies concluded a new agreement with Ithuba, which Gidani has vowed to take to court claiming it is “unfair and invalid”.

Gidani claimed victory after the High Court in Pretoria set aside Davies’s decision to issue the licence to Ithuba, a move the company has said validated its claims that the contract was not fairly awarded.

However, the court refused to set aside Davies’s decision to select Ithuba as the preferred bidder, which saw the minister and the company entering into new negotiations for the licence.

In Gidani’s view, the minister was obligated to start negotiating with Gidani after the licence to Ithuba was set aside, as Gidani had been chosen as the reserve applicant.

Davies announced on Friday that he had signed a renegotiated licence with Ithuba after a court challenge by the losing bidder, Gidani, forced the two parties back to the negotiation table.

But Gidani told Independent Newspapers on Friday that it “will not take this lying down”, and was already talking to its legal team. According to Gidani, the company first heard about the matter when they received media queries from journalists.

“As Gidani we are very disappointed that this has happened, and we will not take it lying down. We were not aware of any discussions between the minister and Ithuba.

“The minister committed an illegal act last year. To repeat it again this year does not make it right. It is unfair that they went ahead to renegotiate the licence, and we will definitely be going to court.

“That we are taking the matter to court is a certainty,” said Gidani corporate executive for legal, Dawid Muller.

According to Muller, Davies was supposed to start negotiations with Gidani as the reserve applicant, as negotiations with Ithuba had clearly failed to meet all the requirements.

Ithuba chief executive Charmaine Mabuza said the outcome of the negotiation period reconfirmed that the bidding process had been a fair and transparent one.

“As Ithuba we believe that this is once again testament to the fact that our bid was exemplary, and has passed the scrutiny of even the highest courts in the land.

“We would like to assure players that as Ithuba looks ahead, further efforts will be geared towards ensuring that its operations are highly responsive to the needs of the retailers and players.

“With this legal process now behind us, we look forward to focusing fully on providing the people of South Africa with an enhanced and reinvigorated National Lottery that we can all be very proud of,” she said.

Davies’s spokesman Sidwell Medupi said Davies considered the High Court judgment, and chose to negotiate with Ithuba, as the preferred bidder, on the terms of the licence agreement to operate the third national lottery.

“Minister Davies is confident that now that the process has been finalised, Ithuba will continue with its plans to operate and invigorate the national lottery and ensure continued contributions to good causes,” he said.

The National Lottery Board has distributed more than R18 billion to needy causes in its 15 years of existence.

Saturday Argus