BEFORE THE APPEALS PANEL OF THE PRESS COUNCIL OF SOUTH AFRICA

IN THE MATTER BETWEEN:

BUSINESS DAY APPELLANT/RESPONDENT

AND

TRILLIAN CAPITAL PARTNERS RESPONDENT/APPELLANT

MATTER NO: 33335/05/2017

DECISION

1. Business Day (appellant) lodged an appeal in this matter, and Trillian Capital

Partners (respondent) also lodged a counter-appeal. That notwithstanding,

the parties will be referred to as appellant and respondent respectively.

2. The respondent had filed a complaint against the appellant in respect of a story

which appeared in the appellants edition of 26 April 2017, with the headline

GE accuses Eskom of rigging tender Claims contract favoured Chinese

company; Politically connected Trillian supported bid. The story also appeared

on appellants website with more or less similar headlines: GE claims Eskom

favoured Trillian bid - General Electric claims contract favoured Chinese

company and politically connected Trillian supported bid. Actually, there was

an earlier online headline which was removed by the appellant within a few

hours of its appearance, and replaced by the one stated above. That headline

is not in issue. Part of the story was about the role the respondent played in the

tender that was awarded by Eskom to a Chinese company known as Dongfang,

the validity of which was being challenged by one of the failed bidders, namely,

1|Page
 General Electrict (GE). Murray & Roberts (M&R) was the other failed

competitor. In his Ruling dated 24 June 2017, which is being appealed against,

the Press Ombud summarized the respondents complaint as follows:

Complaint

TCP (respondent) complains that, construed together (headlines and

articles), the reportage was devised to impel readers to wrongly

conclude that Trillian was involved in improper conduct or corruption

by assisting Eskom to rig the outcome of a tender awarded to the

Chinese company Dongfang.

The company also complains that the reporter did not adequately

reflect the contents of its responses to his questions.

3. The respondent wanted the appellant to publish a corrective story, and an

apology. The Ombud dismissed all the complaints except one, namely, that the

applicant omitted to publish respondents response in which it was denying

certain allegations respondent felt had been levelled against it. In this respect,

the Ombud held that the appellant breached articles 1.1, 1.2 and 3.3 of the

Press Code. The sanction imposed was an apology. Appellant felt the sanction

was too severe, and sought leave to appeal against it; however, leave was

denied.

Respondents Counter-appeal

4. It would be more convenient to deal with the respondents counter-appeal first.

Central to the dispute between the parties is a report known as a High Level

Review which was prepared by the respondent at the request of Eskom. Eskom

had to consider tenders from the above mentioned 3 companies, and the report

was to assist it in deciding on these bids, which were for the replacement of a

2|Page
 boiler at one of Eskoms power stations. The report dealt with a very crucial

element of the tender, namely, the cost element. The bid by Dongfang differed

with those of its competitors in that, although higher, it was at a fixed amount

and therefore did not have an escalation element. Regarding the other two

competing bids, the report showed that there was a risk that costs could

subsequently turn out to be much more because of the escalation factor built

into them. It also indicated that with the Dongfang bid, Eskom would find it

easier to raise the funding because of its fixed cost element.

5. The respondent complained that the story falsely implied that respondent

improperly influenced Eskoms decision to award the tender to Dongfang; and

also that appellant falsely said that respondent favoured Dongfang. These

complaints can conveniently be dealt with together. It was argued for the

respondent that the headline and the first three consecutive paragraphs cast

the respondent as corrupt. That cannot be so, for the reason given below.

6. The headlines and sub-heads: The print headline and its sub-heads read: GE

accuses Eskom of rigging tender

Claims contract favoured Chinese company

Politically connected Trillian supported bid.

The online headline and sub-headline read:

GE claims Eskom favoured Chinese firms bid, with backing of

Trillian

. General Electric has gone to court to stop the utility implementing a

contract with Dongfang.

The appellant argues that the main headline is borne out by the story, the first

sentence thereof, and by other paragraphs further into the story; and that the

3|Page
 factual accuracy of the headline was never challenged by the respondent. The

first sub-headline is borne out by what GE is quoted as saying: At the very

least, it gives rise to a reasonable apprehension of bias in favour of Dongfang

Electric on the part of Eskom. The appellant points out that the politically

connected allegation was never complained of, and says its assertion that it is

common cause was not challenged by the respondent. That the respondents

report supported Dongfangs bid, in the manner described above, cannot be

denied.

All the arguments in relation to the print headline and its sub-headlines hold

good in relation to the online headline. Besides, the headline is an allegation by

GE, contained in the court papers.

If any corruption is suggested, it would be on the part of Eskom, because it is

Eskom which is being accused of rigging the tender. The rigging could have

been in tandem with Dongfang, and not necessarily with the respondent.

Respondent also questions any reference to it in the headlines and the story,

on the basis that respondent was not part of the court case between General

Electric and Eskom. But the truth of the matter is that the story could not have

made sense without reference to the respondents report; there had to be some

background or context to the court case reported on. In any case, the story was

not exclusively about the court case; reference had to be made to the role

played by the report, given its significance.

7. That the content of the story suggested corruption on the part of the respondent;

that is, that respondent improperly influenced Eskom and favoured Dongfang:

4|Page
7.1. It must be accepted, for a start, that the report was meant to influence

Eskoms decision; that must have been why Eskom commissioned it in the first

place, and for which it surely must have paid. That does not, however, amount

to improper influence. It is a well written document. Even though it describes

itself as provisional, and has some caveats, it is very emphatic about the fact

that the bids of other companies (GE and M&R) were more risky because of the

cost escalation factor and that, with Dongfangs bid, it would be easier for

Eskom to raise funds. On the face of it, the report was objective and not meant

to favour Dongfang in a corrupt manner. In fact, in the story, Eskom explains

why it relied on the report. The report cannot therefore be regarded as an

instrument of improper influence.

7.2 The respondent argues that the Ombud erred in his Ruling that breach of

the Code is demonstrated only if the reportage was devised to impel readers to

conclude that respondent was involved in improper conduct or corruption by

assisting Eskom to rig the outcome of the tender. Respondent argues that the

Ombud set the bar too high. We do not agree. While the Ombud might indeed

have used the clause devised to impel readers, it is clear that he was not

setting the bar higher than usual. He was applying the usual standard by asking

the usual question: how would an average reader understand the story? This is

the question we need to ask, and answer, in the present case. In doing so, we

need not again define what is understood to be a reasonable reader; the test

is well known. It is our view that no inference contended for by the respondent

can be drawn by an average reader from the story, let alone that such an

inference would be the only reasonable one to be made. The contents state the

truth, and state in so many words that the respondent did not take part in the

5|Page
 adjudication. For the same reason there was no need for a disclaimer against

any adverse inference, as contended for by the respondent. Respondent made

heavy weather of the statement in the story that respondent gave the thumbs

up to Dongfangs bid. We have already discussed the force of the report; it

must have been seen, objectively considered, as being strongly in favour of

Dongfang; importantly, with strong motivation. The phrase means no more

than that the report, objectively looked at, speaks in favour of Dongfang. The

article went into details explaining, if not justifying, why the report favoured that

company.

8. We are of the view that the Ombud dealt well with the above complaints, and

find no justification to overturn his Ruling. For the reasons given by the Ombud,

and those stated above, the counter-appeal fails.

Appellants Appeal

9. Prior to the publication of the story, the journalist sent a number of questions to

the respondent. The latter gave certain responses. It later complained that the

appellant failed to include some of those responses, which respondent says

constituted denials of certain allegations against it. The Press Ombud found,

under the heading Not adequately reflecting TCPs responses, that:

The journalist neglected report to Trillians denial [in response to what the Mail

and Guardian had reported] that it had:

been appointed by Eskom to find a supplier to replace a broken boiler;

any prior knowledge of or relationship with Dongfang and therefore did not

identify that company for the job; and

6|Page
 been involved in a conflict of interest (for evaluating a sort-listed [sic]

bidder after sourcing that bidder).

He found that these omissions were in breach of articles 1.1, 1.2 and 3.3 of the

Code of Ethics and Conduct and, as a sanction, directed the appellant to

apologise to the respondent. It is against that ruling the appellant is appealing.

10. The respondent submitted that the Ombuds factual findings on the

materiality of the omitted response were correct and should not be lightly

disturbed on appeal.

11. The appellant points out that the part of the story on which the respondent relies

to support the complaint about the issue of conflict of interest, is this:

In 2016, the Mail & Guardian reported Trillian had helped Eskom in

talks to settle its insurance claim for the boiler after it exploded in

2014. The article said Trillian was appointed to find a supplier to

replace it.

Appellant says it is true the story said as stated above; but it says it was entitled

to so report and that it sought comment from the respondent, and the response,

which was indeed published, was as follows:

Trillian said this week it had planned to submit a proposal with another

Chinese firm, HYPEC, during a previous bidding round that was cancelled. It

declined to comment on its role in insurance negotiations with Eskom. We

agree with appellants submission that respondents published response could

only be understood by the reader as a denial of any possible conflict of interest.

The appellant made the following submission in its heads of argument: In

context, the statement and response do not convey that Trillian has a previous

7|Page
 relationship with Dongfang; sourced it for the job; and then assessed its bid in

what would be a conflict of interest. This submission is correct. To this must

be added the fact that the story specifically mentioned that respondent did not

take part in the adjudication of the bids: This week, Trillian said it had merely

produced a cost-benefit analysis over a two day period for the Duvha bids and

was not part of the evaluation team.

12. From the portions of the story we reproduce above, as well as the appellants

submissions, we are satisfied that respondents complaint that material denials

were omitted, was not justified; we therefore disagree with the Ombud that the

appellant breached articles 1.1, 1.2 and 3.3 of the Code. Appellants appeal

therefore succeeds.

13. The following Orders are made:

13.1 Respondents cross-appeal is dismissed.

13.2 The finding made by the Press Ombud in his Ruling of 24 June 2017 that

the appellant breached articles 1.1, 1.2 and 3.3 of the Code of Ethics and

Conduct, is set aside.

Dated this 2nd day of October 2017.

Judge B M Ngoepe, Chair, Appeals Panel

Mr P van der Merwe, Member, Public Representative

MINORITY DECISION
1. I concur with the Orders made in the Majority Decision. However, regarding the

respondents cross-appeal, I would have approached the matter differently,

though with the same results. In dismissing respondents complaint that the

8|Page
 report transgressed article 3.3 of the Press Code, I have a different motivation

from the one in the Majority Decision.

2. The appellant denied that an inference can reasonably be drawn based on

these [the first three] paragraphs or the article as a whole, that Trillian was

involved in tender rigging and corruption. The Majority Decision found: It is

our view that no inference contended for by the respondent can be drawn by an

average reader from the story, let alone that such an inference would be the

only reasonable one to be made. The contents state the truth, and state in so

many words that the respondent did not take part in the adjudication.

3. This is in line with the Press Ombuds finding:

Having taken all of the above facts and argument into account, I do not believe

that the article(s) impelled readers to wrongly conclude that Trillian was involved

in improper conduct or corruption by assisting Eskom to rig the outcome of the

tender. It is an established principle that a publication cannot be held liable for

conclusions drawn by some readers if the statements complained of are factually

correct.

4. The appellant also relied on the precedent set by the Appeals Panel in ANC v

Daily Dispatch, dated 3 November 2015, par. 25 and applied in Mail &

Guardian v Jesse Duarte, Press Appeals Panel, 21 Jun 2016, par. 7-8:

[N]either the Press Code nor South African law hold the author of a factual

article liable for any adverse inferences that are drawn by the reader. Critical to

this defence is that the facts (not the inferences) must be verified.

5. I respectfully submit that this precedent does not fully reflect the correct legal

or ethical position. In my view, in South African law a publisher of an article can

be held liable for defamation if a reasonable reader would make an inference

that is defamatory of the plaintiff, except if the publication has a defence to

9|Page
 rebut wrongfulness. According to the Press Code the dignity or reputation of an

individual should be overridden (which, I submit, would include adverse

inferences) only if it is in the public interest and in circumstances set out in

articles 3.3.1 to 3.3.5 which mirror the common law defences in defamation

cases.

6. Contrary to the Majority Decision (and also the Press Ombud) I, however,

accept the respondents submission that a reasonable reader would, after

reading the article and especially taking into consideration the juxtapositioning

of Trillian in the headline/subheadline and in the first three paragraphs, infer

that the respondent was in some way implicated with the alleged tender

rigging. This would then certainly have a negative impact on the respondents

reputation.

7. But this does not necessarily mean that the appellant was in breach of article

3.3 of the Press Code it could have a defence to override the reputation of the

respondent.

8. As it would be difficult or impractical to prove or disprove that the respondent

had adversely been involved in the alleged tender rigging, the appropriate

defence for the appellant would be as stated in article 3.3.4 of the Press Code:

It was reasonable for the information to be communicated because it was

prepared in accordance with acceptable principles of journalistic conduct and in

the public interest.

9. Contrary to what the respondent argued, I find that the appellants report met

the requirements set in articles 3.3 and 3.3.4. It was reasonable to publish the

particular facts in the particular way at the particular time. The appellant based

its story on credible sources and documents, which they reported on

10 | P a g e
 reasonably; the respondent was given an opportunity to comment; and these

comments were published fairly.

Dated this 2nd day of October 2017

Mr F Groenewald, Member, Press Representative

11 | P a g e