Group Five avoids R54m penalty

Posted On Tuesday, 30 May 2006 02:00 Published by eProp Commercial Property News
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CONSTRUCTION company Group Five says the court has dismissed an application by client Legacy Group to impose penalties of R54m for not completing the Michelangelo luxury apartment building in Sandton on time.

Construction IndustryCONSTRUCTION company Group Five says the court has dismissed an application by client Legacy Group to impose penalties of R54m for not completing the Michelangelo luxury apartment building in Sandton on time.

Group Five would have been liable for half the penalty had the application been successful, as it undertook the project in a 50:50 joint venture with Stocks Building Africa.

Financial director Paul O’Flaherty confirmed yesterday that the R300m project was not completed on time, but said it was disappointing that the dispute had become a legal matter, as contractual mechanisms for resolution were in place.

The scheduled completion time was “some time in the latter half of the last calendar year” said O’Flaherty. The two companies were now fixing the final snags.

“A lot of the delays were around everybody choosing the fittings they wanted,” he said. Legacy Group had been notified of the delays in line with normal procedure, he said.

He declined to say what profit Group Five would have made on the project.

“Let’s just say we didn’t make a lot of money,” he said, adding that the project was taken on at a time when Group Five was not in a position to be selective.

He denied that the delay stemmed from rising demand for construction, which has placed strain on the capacity of some construction companies.

Meanwhile, Group Five yesterday renewed a cautionary notice issued in February, warning that it was still involved in negotiations that might have a material effect on its share price.

 

Last modified on Thursday, 17 October 2013 19:24

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