Irregularities in Angola project: Group Five

Posted On Friday, 09 June 2006 02:00 Published by eProp Commercial Property News
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Group Five informs investors of 'certain potential irregularities' it suspects on a housing project, the Nova Vida Project in Luanda, Angola.

Property-Housing-Residential.

The board of directors of Group Five says in line with its zero tolerance policy towards irregular business activities, that it believed it "prudent" to inform investors of what it called "certain potential irregularities" it suspects on a housing project, the Nova Vida Project in Luanda, Angola.

The project commenced in 2001 and finished in 2005.

"All possible eventualities relating to the above have been provided for in the current financial year and the Group's prospects outlined to the market in its interim results on February 15 2006, particularly with regards to earnings, stands," the statement said.

Group Fives estimated construction order book revenue to June 30 2006 is currently at a record 5.0 billion rand and the secured one-year construction order book to June 30 2007 is currently 4.5 billion rand. Around 40% of the construction order book is over-border, the company said.

Group Five has been involved in 15 contracts in Angola since 2001.

"The Nova Vida Project, Group Five's first in Angola, was entered into with the Angolan government in 2001 and generated total revenue of $135 million.

The project was entered into before group structures, risk management practices and management controls were revised and tightened in 2003," the statement
said.

"Reports were received by the management of Group Five from a variety of
reliable sources, including the Angolan authorities, expressing concern around
the possible abuse of customs, immigration and licensing exemptions and other irregularities or potential illegal activities by Group Five personnel," the
statement added.

Group Five said that investigations by senior executive management indicated that at least some basis appeared to exist for "reasonable suspicion" that irregular activities had taken place.

"Although no charges have been laid and no firm evidence has yet been found to enable Group Five to take further action against parties suspected to be involved, the Group felt that under the Prevention and Combating of Corrupt Activities Act of South Africa, it had to report suspected illegal action," the company stated.

"In line with Group Five's formal policy to report any potential illegal activity to the South African Police Service (SAPS) and its zero tolerance policy towards such activity, management therefore reported its suspicions. Group Five also continues its internal investigations," the statement said.

Group Five added that negotiations had taken place with the Angolan authorities and operations and relationships were back on a firm footing. All unpaid customs duties and other taxes were currently being negotiated and settled.

"All possible steps have been undertaken to ensure that best governance policies are enforced in all Group Five activities, both locally and outside its borders. Group Five implemented a formal Code of Ethics throughout the Group in 2004 and will continue to firmly enforce its zero tolerance policy towards irregular business practices," the statement concluded.

Last modified on Wednesday, 16 April 2014 11:35

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