Minister of Public Enterprises Jeff Radebe and his director general Dr Sivi Gounden are "outraged" that the Mail&Guardian should have "questioned our integrity" in regard to the ill-fated sale of Transnet's publishing house to African National Congress-linked company Skotaville Press.

In a statement in response to last week's M&G story, Radebe and Gounden maintain that "the facts" are that the minister "was not involved in the bidding process at all" and that the director general "did not instruct Transnet to award the tender to any particular bidder".

However, on closer inspection, it appears that these "facts" are not quite so clear cut.

The M&G never claimed that Radebe was involved in the bidding process, but that he was involved in the decision-making process, as the relevant executive authority for approving the sale of state-owned assets.

The fact that he may have delegated that authority to his director general does not absolve him of responsibility.

Indeed, the April 2000 letter from then Transnet chairperson Louise Tager, recommending that the bid of another company, Sechaba Photoscan, be accepted, was addressed to Radebe, not to Gounden.

Gounden, on behalf of the minister, vetoed Transnet's choice, stating instead "We recommend that urgent discussions be held with Skotaville Press to ascertain a speedy closure of the transaction."

And in a letter in November 2001, in response to union concerns about the survival of Skotaville Press (now called African Impression Media), Radebe appeared to confirm that he had applied his own mind to the matter.

Speaking for himself, the department and Transnet, Radebe stated "I wish to reiterate our common opinion that the Production House restructuring transaction was thoroughly researched. The awarding of this business to Skotaville Press (Pty) Ltd. as a Black Economic Empowerment company was an informed decision."

While the letter from Gounden to Tager is couched in terms of a "recommendation", his suggestion that "urgent discussions be held with Skotaville to ascertain a speedy closure of the transaction" leaves no room for any other outcome.

In comments to the M&G last week, Gounden implied that he had been given very little information by Transnet and had merely recommended Skotaville based on the fact that they were offering an extra R1-million, to total R11-million, compared with Sechaba Photoscan's R10-million.

However Tager's letter is quite specific. It states "Our preferred bidder, which we recommend for your approval, is Sechaba Photoscan, because taking value and not just price into account, we consider this one to be the best offer. Although Skotaville Press is the bidder with the highest price, we were concerned about their funders, whose funding was conditional upon certain issues and they reserved the right to revise their offer."

That should have flashed warning lights to Gounden and Radebe. It remains unclear whether Transnet really got value from the sale, as court evidence was that Transnet provided soft loans and other assistance to keep Skotaville afloat.

Gounden did not call for clarification of the funding issue, or for the bid to be firmed up and resubmitted, or for any further information, before rejecting Transnet's recommendation.

The "facts", rather than exonerating the department, suggest instead that the decision to recommend that the deal be speedily concluded with Skotaville was highly questionable.

Gounden has argued that his letter to Tager was merely a recommendation and that the Transnet Board "had the authority to accept or reject the recommendation, or challenge it for reasons they might have deemed appropriate".

But Tager has claimed that as sole shareholder the government exercised a decisive influence over the restructuring process.

It is clear that she, at any rate, interpreted Gounden's letter as an instruction. Within two days of Gounden's letter "recommending" Skotaville, she wrote to Sechaba Photoscan saying that "a decision has been taken by the Department of Public Enterprises concerning the acquisition of Production House" and informing the company that its bid had not been successful.

It is also notable that Transnet's initial defence against the claim for damages launched by Sechaba Photoscan was that it was the department of public enterprises, not Transnet, that had made the decision.

That position was reversed only when Sechaba Photoscan subpoenaed Radebe and Gounden to testify in their case.

Gounden sent an angry letter to the new chairperson of Transnet, Bongani Khumalo, in which he demanded to know why he had not been informed of the legal action launched by Sechaba Photoscan. He questioned whether the Transnet legal counsel and its responsible management were trying deliberately "to embarrass the minister and myself?"Transnet hurriedly accepted responsibility for the decision -- and with that conceded the case to Sechaba Photoscan. Transnet's volte face was complete this week, with a public apology to Radebe and Gounden.

With acknowledgements to Sam Sole, Stefaans Brummer and Mail and Guardian.