Police seized 347 computers from ten Mpumalanga technical college campuses at the weekend on the suspicion the machines were falsely labelled and were loaded with pirate software.
The PCs, valued at R3.7 million, are being returned to the Mpumalanga education department in batches after being examined to enable the registration of students to continue at the campuses.
By this morning no charges had been laid, but a police spokesman said an investigation would continue for some time.
The computers were apparently delivered early last year as part of a large education department tender. However, technicians within the department brought discrepancies to the attention of Siltek Distribution Dynamics (SDD), whose Xylo brand name was displayed on the machines, and an investigation was initiated.
"We picked up on it in November when we got a call from the department asking if we had changed our labels," says Xylo product manager Mark Forbes. "We requested that a label be sent to us and found it to be fraudulent."
Forbes says a team sent to Mpumalanga in November examined 40 PCs with Xylo labels and found the only components originating from SDD were the printers and monitors, with even the machines' keyboards being identified as copies.
The case design, on which SDD holds copyright for the Africa region, was very close to that of Xylo-branded PCs, he says, but it is not know if this was incidental or indicated an organised falsification.
The Keystone Information Services Group, which was awarded the tender for the machines and handled delivery, admits it created 19 unofficial Xylo labels, which were then put on original Xylo products which it says came without labels.
"I delivered 19 machines to the department with Xylo logos," says Keystone MD Thys Hechter. "These were genuine Xylo white boxes, but they came without logos, and the department said they had to have stickers on. So I had 19 logos made. My only mistake was not to go back to SDD with the matter."
Forbes says the "white boxes" from SDD were not true Xylo PCs but generic unbranded systems.
Hechter says the 19 machines in question were not part of the same group as the seized machines, and he admits "clone" machines were also delivered to the education department, but says these were not branded with the Xylo name.
Xylo says its investigation also revealed the machines were loaded with what it suspects is pirated Microsoft software, a suspicion shared by Microsoft itself. However, Hechter says he was under the impression the Mpumalanga education department had general licenses for the software, and that he was never paid for the software he installed on the machines.
"The machines we examined had examples of both Windows 95 and 98 operating systems and also had a mixture of Office 97 and 2000 installed," says Microsoft SA's anti-piracy manager Mark Reynolds. He confirmed the Mpumalanga government is licensed to use Office 97 but says all Microsoft operating systems come with original CD copies and a certificate of authenticity, neither of which were apparently delivered to the education department.
Xylo and Microsoft say police will return the examined computers to the education department while a course of action is decided on.
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