The Gauteng South High Court on Friday ordered Valor IT to immediately pay Mantra Consulting R3 million. It also ordered it to state why a further R7 million should not be paid for work done concerning the R152.7 million Cipro IT system.
The dispute between the companies is part of the controversy surrounding the Companies and Intellectual Property Registration Office's (Cipro's) handling of company registrations, and allegations of fraud and tender irregularities in awarding the contract to develop an enterprise content management (ECM) system.
JSE-listed Faritec is the counter-bidder that lost the contract, despite having quoted R63 million for the work.
Mantra Consulting CEO Abe Mbulawa had an agreement with Valor IT, whereby he would assist with the preparation and implementation of the ECM tender. Valor IT, however, reneged on its payments under the agreement, forcing Mantra Consulting to approach the court for a ruling.
Neither Valor IT nor Mantra Consulting returned phone calls this morning asking for comment on the case.
Democratic Alliance (DA) MP Andricus van der Westhuizen welcomed the ruling, saying: “The positive developments from the South Gauteng High Court are matched by encouraging movements from the minister of trade and industry. Rob Davies, who declared back in November 2009 that the ECM tender had been given 'a clean bill of health', now appears to have the support of Cabinet to act against the officials implicated of wrongdoing.”
Two weeks ago, Davies said investigations against Cipro, following a damning report by the auditor-general (AG), would go ahead with the view to levelling charges against certain people.
Trade and industry spokesman Sidwell Medupe refused to comment directly. “The minister will appear before Scopa [Parliament's Standing Committee on Public Accounts] on 18 May and then he will reveal all,” Medupe said.
When Davies briefed the media on preparations to take his department and the AG's findings further, he said procedures had to be followed. He appeared to have subsequently gained Cabinet's approval to do so last week, when government's highest decision-making body issued a statement to that effect.
Cipro sidelines
Cipro spokesperson Elsabe Conradie says the installation of the ECM system is going ahead and should be operational by February next year.
She adds that Cipro CEO Keith Sendwe is still on sick leave and its CIO, Michael Twum-Darko, is on special leave. Conradie could not say when either would return to work.
Conradie explains that the ECM system is needed to ensure fraud through the registration of similar company names would not occur.
“Currently, we have the electronic system where someone registers a name. If the name is very similar to an existing company, then we institute human intervention, which includes contacting the directors of the existing company.”
Conradie says the ECM system would be key to Cipro's new role under the new Companies Act, wherein it will merge with the Office of Companies and Intellectual Property Enforcement to become a commission.
She says the instances of fraud that were reported over the weekend had occurred without the participation of Cipro, but the organisation is cooperating with all investigations.
Van der Westhuizen says: “Although the minister is to be commended on his intentions, some tough action is now needed. The DA hopes that other ministers will pay the same attention to the AG's report. Some of the irregularities identified by the AG involve staff from other state institutions, such as SITA [State IT Agency].”
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