JSE-listed ICT company GijimaAst is facing a lawsuit over a R1 million online portal project that Corporate Constellations says was never completed and was fraudulently misrepresented.
GijimaAst, which is preparing for its own legal battle with the Department of Home Affairs, to enforce the R4 billion “Who Am I” contract, has rubbished Corporate Constellations' claims.
The listed company blames a former staff member for improperly entering into the deal with Corporate Constellations, and says it had no choice but to walk away from the project.
Legal threat
Corporate Constellations operations director Anne Ekstein says the company will follow the legal route to recoup damages of at least R15 million, after GijimaAst failed to deliver on its promises.
Ekstein says GijimaAst was contracted to develop a portal around which Constellations' business hinged and which was set to be ready before the company launched in February. However, GijimaAst never finished the job and also defrauded Corporate Constellations by charging it for equipment that was never supplied, alleges Ekstein.
As a result, Corporate Constellations incurred costs and lost out on revenue, as contracts were cancelled. Total damages to the company are at least R15 million, which it will seek to recover in court, she says.
Ekstein alleges the Bryanston-based company had to retrench staff, because it could not operate without the online portal. It had 25 staff members when it launched last February, but now has six.
The company was only able to keep going because of shareholder investments. In November last year, a new service provider finished the job, allowing Corporate Constellations to implement its business plan.
Ekstein says the company also lodged a complaint with the SAPS commercial crimes unit, alleging that GijimaAst defrauded it by not providing equipment that was paid for.
This complaint was dismissed by the prosecutor, but the company's lawyer, who asked not to be named, says he is in discussions with the prosecutor to dispute the dismissal of the criminal docket.
In addition, he says, summonses are being prepared for a civil case to be launched against GijimaAst for damages the company incurred.
'Undisclosed interest'
GijimaAst has hit back at Corporate Constellations, saying it walked away from the contract because one of its staff members entered into the deal fraudulently. GijimaAst also argues that Corporate Constellations tried to publicly embarrass it by laying the criminal charges with SAPS.
Thoko Mnyango, GijimaAst's managing executive of marketing, communication and transformation, says the contract was not a “bona fide business arrangement” because the staff member had an undisclosed interest in Corporate Constellations and did not stick to internal processes.
Once GijimaAst became aware of this, it walked away from the deal, held a disciplinary procedure, and dismissed the staff member. “To rely on this incident as an alleged example of GijimaAst's work performance would be ill-informed and misleading,” Mnyango says.
In addition, Corporate Constellations' complaint to SAPS, that GijimaAst defrauded the company, is a further attempt to embarrass GijimaAst, Mnyango says. “Constellations attempted to blackmail GijimaAst by laying criminal charges... hoping to publicly embarrass GijimaAst.”
She says GijimaAst defended the charges and provided a “full” version of events to SAPS, which dismissed the matter and exonerated GijimaAst.
The former staff member - whose identity is known to ITWeb - denies any conflict of interest, saying he had verbally disclosed his interest in Corporate Constellations. He claims he was only asked to fill in paperwork declaring he was a director a year after he quit Corporate Constellations.
The former employee says he aims to contest his dismissal in the labour court as soon as he has sufficient funds to do so.
SAPS spokesman lieutenant colonel Lungelo Dlamini confirms that a case had been laid at the Sandton police station. He says, however, the matter is closed and he is investigating why this is so.
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