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Nicolaas van den Bergh says he had an agreement to supply it with 70m breathalyser tests a year.
Alcohol-related fatalities on French roads saw a remarkable drop from 2011, with the breathalysers apparently playing a critical role. Picture: AdobeStock
Chartered accountant Nicolaas van den Bergh has hauled the French government before the Western Cape High Court over what he says is a R244 million breach of contract to supply millions of breathalyser tests to help reduce alcohol-related fatalities on French roads.
In 2011, Cape Town-based Redline Products, of which Van den Bergh was a director and co-owner, was one of two producers in the world of alcohol breathalysers.
Papers before the court claim that an oral agreement was concluded with the French government to supply at least 55 million breathalysers for 2012. It’s taken this long to get the case before a court.
The agreement was conditional on the French government passing decree 2012-284, which it did in early 2012 during the tenure of then-president Nicolas Sarkozy.
The decree imposed a fine of €11 (currently around R212) on drivers who failed the breathalyser test.
The alcohol-related fatalities on French roads show a remarkable drop from 2011 when the new decree was initiated, with the breathalysers apparently playing a critical role.
The French decree was seen as the legal benchmark for other European countries, which planned on introducing similar legislation of their own. Had this come to pass, Redline expected to sell upwards of 100 million units a year. But that was not to be.
Unlike the hand-held breathalyser devices used by traffic police, which require regular recalibration, the Redline product was simple and cheap, costing less than €1 apiece, and was intended to encourage drivers to check their own alcohol levels before driving.
Police were also empowered to check whether drivers were in possession of a self-test breathalyser, and to fine them if their blood alcohol levels exceeded the legislated limit.
A senior official from the French Department of Transport wanted an undertaking that Redline would be able to supply at least 40 million breathalysers a year.
Van den Bergh assured the senior government official that Redline could meet the required volumes, and had the products certified by the Laboratoire National D’essais (LNE), the French national testing laboratory – the equivalent of the SA Bureau of Standards. The LNE is custodian of the French quality assurance mark NL.
The court papers say the agreement was partly oral and partly tacit, but would be brought into existence with the enactment of decree 2012-284. Part of the agreement was that Redline’s manufacturing premises in Cape Town would be subject to an annual audit to ensure the breathalysers were safe, reliable and manufactured in conformity with French NL standards.
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Site inspection
Jean-Claude Le Duc, head of certification at the LNE and chair of the French NF committee on alcohol breath testing, arrived in Cape Town in November 2011, accompanied by Pierre Elefteriou, the owner of French distribution company Pelimex, to inspect the Redline premises and go over the logistics of supplying more than 50 million breathalyser tests.
Shortly thereafter, President Sarkozy announced the decree would be enforced in early 2012, and it was all systems go at the Cape Town factory.
The factory was built and representatives from France arrived for the annual audit as agreed.
At the time, Redline employed 1 500 people, mostly women from poor areas in and around Cape Town.
To comply with the contract, Van den Bergh and Redline took on substantial debt to build the required manufacturing plant and supply the French government with the quantities it required. Van den Bergh signed personal suretyships and took out mortgage loans on his home to fund the business.
Then problems started to surface.
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Delay, postponement … and a new decree
The imposition of the fine for drivers exceeding the mandated alcohol limit was delayed until March 2013 to make sure there were sufficient supplies of breathalyser tests.
In February 2013, the prime minister of France announced the indefinite postponement of the fine provided for under decree 2012-284 – and then two weeks later enacted a new decree postponing indefinitely the fine for not having an unused breathalyser in a vehicle.
The effect of this was that the decree 2012-284 remained in force for the following eight years, and while drivers of vehicles were required to have unused breathalysers in their vehicles, they faced no fine for non-compliance.
The result was an overnight collapse in demand for breathalysers and a breach of the French government’s legal obligations to implement the decree.
In so doing, the French government had repudiated the contract, claims Van den Bergh in his court papers.
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The result was catastrophic
Redline was placed in business rescue in SA and lenders started calling up the R11 million in sureties Van den Bergh had signed.
The properties he had bonded to raise funds for the project were foreclosed and sold at auction, with the proceeds paid to creditors. The replacement value of these properties is R42 million.
More than 1 500 workers were retrenched, resulting in “civil disturbances, including widespread threats, assaults and damage to property”, say the papers.
Van den Bergh says he forfeited his 45% shareholding in Redline, worth an estimated R56.7 million at the time.
He further says he was deprived of R22.5 million a year in expected dividends, bringing his total claim against the French government to R244.7 million.
Moneyweb wrote to the French Embassy in South Africa but had not received a response by the time of publication.
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Long road
Van den Bergh is a former director of Longmile, a tyre company listed on the JSE in the 1980s that bought out Goodyear before it disinvested from SA during apartheid.
He first served summons on the French government in 2019 through SA’s Department of International Relations and Cooperation (Dirco), and in 2024 won the right to have the case heard in a South African court where he hopes to have a sympathetic hearing for a case that involves a largely oral agreement.
There is a large body of law in SA covering just such agreements, and on which Van den Bergh makes heavy reliance.
This article was republished from Moneyweb. Read the original here.
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