Valor IT is threatening to go back to court to make the Department of Trade and Industry pay up in terms of a settlement agreement it says was reached between the parties, and sanctioned by the North Gauteng High Court.
The threat is the latest in an ongoing spat between the department and the IT company, after trade and industry minister Rob Davies canned Valor IT's R153 million deal to install an electronic content management (ECM) system at the Companies and Intellectual Property Registration Office (Cipro) in the first half of last year.
Davies cancelled the deal after a forensic investigation revealed irregularities during the awarding of the contract - a statement Valor IT has rubbished. The forensic investigation also resulted in the suspension of two top Cipro executives.
Valor IT took the department to court to have its contract upheld and - towards the end of last year - the parties ended up in court to settle the matter. According to Valor IT, a settlement covering several issues was reached and sanctioned by the court. The department, however, has repeatedly said no settlement has been agreed to between the parties.
Pay up, or else
Now Valor IT chairman Josias Molele says he is determined to get the department to pay out in terms of the order, which he says was mostly agreed to by the parties during the court-ordered settlement on 25 November.
Molele said yesterday he intends going back to court to “have the order enforced and settlement adhered to”. He has also accused the department of not negotiating in good faith.
The settlement covers three aspects, of which two were agreed to by both parties, says Molele. The first is a payment relating to damages for the early cancellation of the contract, an amount that Molele will not disclose.
The second part of the agreement Molele argues has been agreed to, relates to amounts that the department retained on invoices already paid out to Valor IT. This amount comes to R3.4 million and accounts for 10% of invoices previously paid by the department.
Molele says the only outstanding issue that has yet to be agreed relates to a net amount of R9.8 million due for maintenance and service work. This issue is the subject of yet another court case.
According to Molele, the department had 14 days from 25 November to pay up in terms of the settlement, but failed to do so. As a result, attorneys acting on behalf of the IT company sent the department a letter of demand on 20 December.
The letter - a copy of which is in ITWeb's possession - demands payment under the agreement by close of business on 21 December, or a written explanation as to why payment has not been made.
No deal
In response, the Office of the State Attorney argues, in its written response dated 20 December, that any settlement could “only be entertained if such settlement negotiations were meant to totally end all pending disputes between the parties”.
In addition, the letter says, the terms of the agreement were meant to be reduced to writing and then signed off by Davies, among other senior department representatives. This, it adds, has yet to happen as the settlement has been rejected by Davies and the DG and - as such - there is no settlement.
The letter from the State Attorney adds it is confident Valor IT will reconsider its position to head back to court as “such a step will not only be vigilantly opposed, but would certainly warrant a negative costs order which we will certainly exhort the court to grant against Valor IT and/or its legal representatives”.
Sidwell Medupe, the department's director of media and public relations, could not immediately comment on the issue this morning. However, he previously refused to comment about the ongoing legal wrangling, apart from saying the settlement had not been finalised.
Medupe has also previously said the implementation of the ECM system is linked to the court case, and he could not comment on that either until the matter had been wrapped up.
In the meantime, as the ongoing legal wrangle stalled the implementation of the ECM system at Cipro, the office is now rushing to update its current IT systems to be ready for when the new Companies Act comes into effect in April.
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