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Sparks fly in Gijima dispute

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 10 Oct 2013
None of Anderson Scanning Technologies' claims are based on fact, says Gijima interim CEO Eileen Wilton.
None of Anderson Scanning Technologies' claims are based on fact, says Gijima interim CEO Eileen Wilton.

One of Gijima's former sub-contractors claims Gijima hijacked it, and has started legal proceedings to claim R184 million in damages.

At the centre of the dispute is a contract that Gijima won from the Department of Rural Development and Land Reform. It sub-contracted scanning of documents for 10 deeds registries, as part of a project known as Vulindlela, to Anderson Scanning Technologies (AST).

Gijima has claimed publicly that AST did not perform under the deal and that it had to step in to deliver to the department. It also said it had taken a write-down of about R160 million after writing off advances it paid out, which Anderson used for working capital and equipment.

AST has hit back, accusing Gijima of hijacking the company and taking over its equipment, which has left it in an "invidious position" as it incurs damages daily. AST has issued summons against Gijima - which the listed company received late on Tuesday - claiming R184 million.

The scanning company says it bought specialised machinery and hired "hundreds" of people to perform under the deal. It argues that Gijima changed the deal between the parties without its consent until "eventually the relationship between Gijima and AST had soured". CEO Andrew Anderson alleges Gijima changed the scope of the contract.

Baseless claims?

Gijima interim CEO Eileen Wilton says none of Anderson's claims are based on fact. She says Anderson was happy to let Gijima step in to run the contract, and was considering exiting. "He's an entrepreneurial guy and bit off more than he could chew."

Anderson argues that all his claims are factual, and backed up by documentation.

AST says the parties had agreed that Gijima would buy out the Vulindlela project, and would take over the project between mid-April and mid-June while a price was worked out. This fell through and, since the deal terminated, Gijima has been in unlawful possession of its property and equipment, it alleges.

Gijima argues the equipment does not belong to AST, but to the funder, who is owed R85 million. Anderson says he invested R25 million of the company's capital into equipment as well.

The listed company is in the process of applying for AST's final liquidation, although it had given the impression at its results presentation that a provisional order had been granted. Wilton says the group aimed to say it had applied for liquidation and was confident of the outcome.

AST is opposing the liquidation, for which a court date has yet to be set down.

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