DTI, Valor IT settle

The Department of Trade and Industry (DTI) offered Valor IT a settlement that was accepted by chairman Josias Molele.

This comes after judges in the North Gauteng High Court ordered the parties to meet and settle their dispute over a cancelled contract.

A R153 million contract - awarded to Valor IT - to implement an electronic content management (ECM) system at the Companies and Intellectual Property Registration Office (Cipro) was canned earlier this year by trade and industry minister Rob Davies.

This was due to a forensic report, which was completed in March, indicating tender irregularities in the awarding of the deal.

Valor IT took legal action to force the department to uphold the contract to complete an overhaul of Cipro's legacy IT systems.

The forensic report also resulted in Cipro's CEO Keith Sendwe and CIO Michael Twum-Dwarko being suspended. In May, Davies announced the pair would be charged, but Sendwe has since died and Twum-Dwarko is still waiting for a hearing date to be set.

Molele said yesterday evening that the parties had negotiated a settlement agreement. He would not disclose the amount he accepted from the DTI, saying the agreement is confidential. He adds, however, that it is “not a small figure”.

He says he has never seen the forensic report, which led to Valor IT's contract being canned.

Molele maintains that his company did nothing wrong, and the confidential information his company was accused of being in possession of was not secret, because Cipro had widely circulated the business plan to several people on more than one occasion.

Despite the legal tussle between Valor IT and the DTI, Molele says he “harbours no ill feelings” towards the department and will now concentrate on building his business.

The department had not responded to ITWeb's requests for comment by the time of publication.

Jacques Smalle, Democratic Alliance (DA) deputy shadow minister of trade and industry, says the payment of a settlement is wasteful expenditure on the department's behalf.

He says this is because the DA has information that R90 million had already been paid to Valor IT before the court case.

“We definitely want to ask the minister what the final settlement figure was, who is going to be held responsible for the mess, and if some of the software that Valor IT was paid for is actually going to be used.”

He adds that the ECM system is not up and running and this process needs to be fast-tracked.

Molele says should the DTI request his assistance, he is more than willing to aid the department in implementing the ECM system at Cipro.

There were concerns that Cipro would not be ready when the new Companies Act comes into effect next year, as the court case had been holding up implementation of a vital IT overhaul.

The court battle was set to be heard next year.

The ECM system is vital for Cipro to be able to cope with new requirements outlined in the upgraded Companies Act. The legislation was meant to come into effect in October, but has now been delayed to April, to “enable the department to finalise all processes required to effectively administer these two pieces of legislation”, the DTI said in a statement in September.

The new Companies Act will result in the establishment of the Company and Intellectual Property Commission, which will take over all of Cipro's functions, and the office will cease to exist. The commission will report directly to Parliament.

However, the new Act also requires Cipro, in its new guise, to implement a range of electronic functions, with which its current legacy systems cannot cope.

The office is upgrading its existing IT systems to cut down on fraud, but acting CEO Lungile Dukwana previously conceded that “the current system is not helping us... this is an old legacy system”.