Valor IT taken to court

Johannesburg, 09 Jun 2009

Mantra Consulting has filed a court application to resolve payment issues with Valor IT.

However, the Companies and Intellectual Property Registration Office (Cipro) and Valor IT maintain it will not affect the R153 million enterprise content management (ECM) contract that is at the centre of the controversy.

Farhaad Lapocharia, the lawyer handling the case on behalf of Mantra Consulting, confirmed a court application had been filed.

“What I can tell you is that matters have commenced and documents have been exchanged. But I can't say anymore, because matters are sub judice and, in terms of the rules of court, I will only be able to provide you with details once the matters are finalised.”

Mantra Consulting previously called on Cipro to voluntarily suspend its R153 million ECM project, claiming Valor IT had failed to meet its contractual obligations. The company also claims Valor IT failed to pay over R10 million in consultancy fees. However, both Valor IT and Cipro have dismissed these calls.

Valor IT was controversially awarded the lucrative tender by Cipro. Valued at R153 million, the tender will see the implementation of an ECM platform, which will be used to drive Cipro's electronic transformation process. The awarding of the contract has come under fire for tender irregularities, but Cipro maintains the process was transparent and says any suspicions are ill-founded.

Josias Molele, chairman of Valor IT, says Mantra has no case as it has fulfilled its obligations with regards to the services rendered by Mantra.

“We would like to confirm that Mantra did not form part of the Valor IT tender response to Cipro. Mantra was engaged to provide the quality assurance service aspect for the tender documentation. Please take note that the tender contract is between Valor IT, its OEMs and Cipro, and not any other company or individual outside of this tender. Contracts do not get cancelled based on hearsay and non-substantive allegations.”

No threat

Cipro says that, based on the agreement signed between it and Valor IT, the agreement would only be terminated if Valor IT broke the terms of its contract. The company maintains Valor IT did not bid as part of a consortium and Mantra Consulting's name did not appear on any tender submissions.

The company says the contract may be terminated if “Valor IT becomes, threatens or resolves to become, or is in jeopardy of becoming subject to any form of insolvency administration, or if Valor IT ceases or threatens to cease conducting its business in the normal course”.

According to a breach and termination clause, in the contract signed between Cipro and Valor IT, Cipro is allowed to terminate the contract if Valor IT breaches any material term of its agreement and fails to remedy it within 10 business days.

Keith Sendwe, CEO of Cipro, says the tender is the largest and most significant one awarded so far and says the contract with Valor IT is not under threat.

“The onus is on the directors of that company to address issues pertaining to the running of their organisation,” Sendwe says.