The ongoing legal wrangle between the Department of Trade and Industry (DTI) and Valor IT is turning into a war of accusations, while the implementation of an IT system necessary to comply with the new Companies Act hangs in the balance.
The DTI pulled the plug on Valor IT's contract in the middle of June, and work on the R153 million implementation of a new enterprise content management (ECM) system, at the Companies and Intellectual Property Registration Office (Cipro), came to a grinding halt.
Valor IT was set to go to court to have the contract upheld, but allegations of delaying tactics by the department mean the court date will now be pushed out.
The IT company's assertion that the DTI has not filed its response to the court matter could throw another spanner in the works, as Cipro scrambles to put the IT system in place before the new Company's Act comes into play in October.
Cipro has to have an ECM system when the Companies Act comes into play. If it fails to meet this deadline, it will not be able to cater for new functions such as amending company registration forms that will simplify the process.
In addition, the new Act makes provision for changes to electronic processes in terms of name reservations, registration of companies and the compliance regarding accounting officers.
Delay tactics?
Valor IT says the DTI has not filed its responding affidavit to its application that the court declares the contract valid. As a result, says Valor IT chairman Josias Molele, the company was not able to respond to the department's response, which Valor IT was meant to do yesterday.
However, alleges Molele, Friday's due date came and went without a response from the DTI. He says such tactics are “how officials kill small and medium companies”. In addition to the legal delay, Molele says the department owes him R10.8 million, which has been due for over 120 days, and another R2 million is now due.
Confusion reigns
In contrast to Molele's claims, trade and industry minister Rob Davies recently said the department had filed its response to Valor IT's request that the court uphold its contract.
Davies told a press conference, at the end of last month: “We filed our answering affidavit on Friday,” which was 25 June. He added that government was determined to sort out the Cipro problem.
Attempts to verify whether the department's response has been filed at the South Gauteng High Court, in Johannesburg, were unsuccessful, as several calls to the court went unanswered, and those who ITWeb did get hold of were not in a position to clarify the matter.
The department has not responded to several requests to provide clarity on whether the answering paperwork has been filed, or what the status of the project is. However, Cipro's deadline could come and go if the court case is dragged out.
Molele says he wants the contract upheld, because it was legally entered into between his company and Cipro. He says the department cannot cancel the contract when the matter is due to be heard in court. Should Valor IT win, any new contracts awarded will have to be reversed, which will result in additional costs and delays.
Molele argues that the department does not have the right to cancel a contract that it did not enter into.
Cipro is also not commenting on whether the system will be up and running in time for the Companies Act to be in place. Head of communications Elsabie Conradie referred an enquiry about progress in installing the system to the department.
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