Valor IT is embroiled in yet another legal wrangle involving the canned R153 million contract to overhaul the IT systems at the Companies and Intellectual Property Registration Office (Cipro).
On Monday, the North Gauteng High Court ruled that Valor IT must pay software vendor Blue Turtle $250 000 - or R1.76 million - for breaching a contract. Judge RD Claassen ruled that Valor IT must pay the money, because it cut Blue Turtle out of the deal, and bought software directly from Vignette.
Vignette is a US-based enterprise content management (ECM) software provider.
The software formed part of the implementation of an ECM system at Cipro, which was awarded to Valor IT. Trade and industry minister Rob Davies last year canned the deal, after a forensic report uncovered irregularities in the way it was awarded.
Blue Turtle argued that it had a deal with Valor IT to assist the company in implementing the tender. The agreement between the two companies was that Blue Turtle would buy software from Vignette for $1 million, and the software would then be sold to Cipro for $1.4 million, with the profit being split between the two companies.
However, the judgement found Valor IT cut Blue Turtle out of the deal, and went straight to Vignette, saving itself $100 000. As a result, Valor IT was ordered to pay Blue Turtle $250 000.
Taking it further
Valor IT chairman Josias Molele says he is not letting the matter rest there, as he believes the company has good grounds for appeal. He claims Blue Turtle misrepresented itself as being a Vignette distributor, when it is only a reseller.
Molele says he has already informed Blue Turtle that he intends appealing the ruling, and he is busy with a court application to have the decision reversed.
Blue Turtle MD Geoff van den Bosch doubts Valor IT will be allowed to appeal, as the judge referred to its witnesses in the case as being inconsistent.
Van den Bosch says the sooner Valor IT pays up, the better, as the order includes interest at 15.5%. Blue Turtle will take legal action if it needs to in order to make Valor IT pay up, he adds.
This is not the only court battle Valor IT is embroiled in. Molele also wants to take the Department of Trade and Industry (DTI) back to court to cough up R28 million he says the department offered as a settlement agreement for the cancelled ECM contract.
Molele says the agreement is binding, but the department has failed to pay up. However, the DTI says no such agreement was ever finalised and the courts will now have to make a final decision.
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