Another Roussos kerfuffle

Johannesburg, 19 Aug 2005

Mike Roussos seems to be in hot water again, though this time not over the Capstone 518 affair that made headlines in February 2005.

Details are scarce, and the SA Police Service did not return calls for comment, but what is known is that Roussos, ex-CEO of the Gauteng Shared Services Centre (GSSC), was asked to present himself to police on Wednesday, and was brought before court on unspecified charges of corruption.

The charges are unrelated to Capstone 518, but involve a contract, reportedly worth R4.6 million, awarded by the GSSC to Awaken Consulting and Trading. Roussos was released on bail.

"They didn`t have any detail, but they just said something that falls under the rubric of fraud and corruption," Roussos says. "There was no charge sheet, no docket, nothing. They don`t have one ready, according to them."

Awaken Consulting was established three years ago, according to its director Seew Chion Hau, and is an industrial engineering consulting firm which specialises in the analytics and mathematics of productivity monitoring. Seew says it was contracted by IBM Consulting (formerly PwC Consulting) to do productivity analysis at the GSSC.

Both Roussos and a close associate of Awaken Consulting, Basil van Loggerenberg, say there was no contract between Awaken and the GSSC. "They`d met with PwC [IBM] before, and had done some work for the Gauteng Provincial Government (GPG)," says Roussos. "The contract came as a result of the interaction they had with both PwC and the GPG. I merely said I have no problem with that."

'No relationship`

Seew says there is "no relationship" between Roussos and Awaken Consulting, although he claims he and Awaken had done work for previous organisations with which Roussos had been involved, including Gencor, where Roussos held several executive positions in the mid-1990s, and Legalwise, which he ran in 2000.

Roussos denies any financial or executive interest in Awaken. "They happen to be people I`ve used previously. I know some of the people," he says of his involvement with the company. "So socially yes, professionally yes, but beyond that, no."

Neither Awaken Consulting nor its directors have been charged with any wrongdoing in connection with the Roussos case. Van Loggerenberg says the deliverables were completed according to the contract, and the contract is no longer ongoing.

He claims that to his knowledge Roussos played no role in awarding the contracts to Awaken. "In the end he was a signatory, but the work was channelled our way because of our competence," Van Loggerenberg says.

"There was absolutely no financial interest in it for him. That would be impropriety, and we wouldn`t engage in that," he adds.

Old scores

The Capstone 518 kerfuffle concerns a company, of which half each was owned by Roussos as then-CEO of the GSSC and Blue IQ, a division of the GPG. It was set up to retain SAP consultants at market rates, and in turn provide SAP skills to the GSSC. Roussos was chairman, and the GSSC`s CIO, Livinston Chilwane, whose contract has since expired, was its CEO.

The GPG undertook to repurchase Roussos`s shares at a future date, and at a value derived from the savings Capstone generated for the GSSC by not having to employ SAP consultants directly. The value of the shares was to be determined by independent auditors.

Then-MEC for finance, Jabu Moloketi, defended the contract, having obtained legal advice that the contract was sound, but Jack van der Merwe, the new CEO of the GSSC, said the deal "was improper and wasn`t done according to the rules".

Civil litigation is ongoing between Roussos and the GPG in which the former claims he is owed millions in terms of the contract. Formal charges against Roussos have not been brought, however, and the investigation seems to have stalled.

"The civil suit is going to court sometime next year. What they seem to have done is abandon [the criminal investigation into Capstone 518] and tried to find something else," Roussos says.

He says he doesn`t know how he will defend the charges. "I have no idea at all. The point we made to the judge is that we can`t comment on the charges when we don`t know what they are."

At publication time, ITWeb had been unable to reach the person at IBM Consulting with whom Seew claims to have signed the contract.