SITA loses Tedaka lawsuit

By Martin Czernowalow for SITA
Johannesburg, 14 May 2009

The Pretoria High Court has dismissed the State IT Agency's (SITA's) R5 million claim against business consultancy Tedaka Business Consulting, with costs.

The organisation said this morning it is still awaiting a report from the High Court judge and would then “chart a way forward”.

However, it is understood that one of the main reasons for the case being thrown out is that SITA failed to prove Tedaka was awarded the contract legitimately.

At the centre of the dispute was the R5 million paid to Tedaka in 2005, when the company was brought in to assist SITA to set up the Office of the Ombudsman to probe allegations of fraud and corruption within the organisation and its tender processes.

In court papers filed at the Pretoria High Court in 2006, SITA alleged Tedaka Business Consulting did not provide the services it promised, but Tedaka has argued it delivered consultancy work for the project and that the payments it received were above board.

In addition, sources close to SITA claim chairperson Zodwa Manase awarded the tender to Tedaka without issuing a tender.

At the time, this was backed up by Teddy Daka, founder and head of Tedaka Business Consulting, who admitted in several media reports that his company did not tender for the contract.

Instead, he said, his company was approached by Manase, who was nearing the end of her first stint as SITA chairperson, to participate in the establishment of the Office of the Ombudsman.

SITA's claim against Tedaka came in light of an investigation, instigated by former minister of trade and industry Mandisi Mpahlwa, in 2006, into tender irregularities within the agency.

Financial irregularities

It was reported that SITA's management approached Mpahlwa to intervene after an auditor-general's and internal forensic investigation found financial irregularities amounting to more than R120 million.

Sources have also questioned why Manase was called to testify for SITA in the case, as she is seemingly at the centre of the controversy.

“It is interesting that the chairperson gave evidence and she was responsible for flouting the rules in the first place. She could hardly testify against herself, so - in fact - had she testified against SITA?” asks an insider.

Until now, SITA and the Department of Public Service and Administration (DPSA) have side-stepped questions about Manase's role in the matter and whether any form of probe will be launched.

In fact, the ministry recently lashed out at SITA critics, saying: “Manase is not facing any criminal charges and allegations of mismanagement are just that - allegations. To continuously link Ms Manase to hearsay is mischievous and malicious in the extreme.”

However, a SITA insider has accused the DPSA of ignoring serious problems within the organisation and turning a blind eye to mismanagement.

“What allegations is the DPSA referring to? The whole case resulted from an investigation launched at ministerial level and now SITA could not prove in court that the contract was even awarded legitimately.”

The DPSA has also downplayed suggestions that the court case between SITA and Tedaka had undermined a recently-completed ministerial task team investigation into the state agency and resulted in a potential conflict of interest.

Daka was last year appointed by public service and administration minister Richard Baloyi to serve on the ministerial task team that was investigating SITA and its processes.

The department did not explain how Daka - who admitted to obtaining work from SITA without following a proper tender process - could have been selected to investigate SITA's procedural problems and tender irregularities.