No settlement has been reached between the department of trade & industry and Valor IT, the service provider fired over irregularities when bidding to develop an IT system for the Companies and Intellectual Property Registration Office (Cipro), trade & industry minister Rob Davies said on Friday.

“The DTI maintains that settlement on the terms that Valor IT wanted would not have been in the public interest and that it would have undermined the very principles that the DTI sought to uphold when a decision to terminate the ECM [electronic content management system] contract was taken,” Davies said in a statement.

Valor IT had taken DTI to the high court in Pretoria over the cancellation of a R153m contract to supply an electronic content management system to Cipro.

Davies said the matter was still pending.

“The matter is therefore still pending before the north Gauteng high court and the parties will have to revert to the court to conclude this matter if Valor IT wishes to continue with this court action,” the minister said.

Davies cancelled the contract in June 2010 after a forensic investigation found alleged irregularities had occurred during the tender process.

Cipro’s decision to award the contract in March 2009 to Valor IT, a two-man outfit, had been probed by the department and several law enforcement agencies.

The forensic audit report established “a pattern of connections” between the companies and the individuals involved, and raised “some very serious questions” about the payment to Valor IT of an advance R56m “in record time”.

Auditor-general Terence Nombembe found that Cipro failed to follow the proper procurement process, did not take into account the financial sustainability of the company and appeared to have furnished it with confidential business information not given to other bidders.

Cipro CEO Keith Sendwe (who had since died) and information head Michael Twum-Darko were suspended on allegations of having interfered with the tender process to ensure the contract was awarded to Valor IT.

Davies said on Friday: “The forensic investigation by both the auditor-general and an independent firm instructed by the DTI advised that the awarding of the tender had been irregular.

“To reiterate, the DTI maintains that it acted within its rights, and in the public interest in terminating the ECM contract.”

Davies said: “The DTI has noted the unfortunate attempt to use the media to compel it into a settlement that is based on conditions and demands that are not in the interest of the DTI or the public that the DTI serves.”

Operations at Cipro had improved due to replacement infrastructure and other IT interventions, he said.

“The Cipro website has been significantly stable despite the high volumes it’s experiencing due to annual returns lodgements.” — Sapa