Technology group GijimaAst was trading down more than 10% on Thursday after it warned shareholders that it had entered a dispute with the department of home affairs over a multibillion-rand IT contract.
“After close of business on 13 April, the department of home affairs sent a letter to GijimaAst, in which the department contended that the contract is invalid.”
The contract, known as “Who Am I Online?” involves a modernisation of home affair’s IT systems. It is Gijima’s largest contract with government and makes up 15% of the group’s annual revenue.
Gijima says it has consulted its lawyers and “disputes” that the contract is invalid. “The company maintains that the contract is valid and enforceable,” it says. “If the matter is not resolved, it is possible that litigation on this issue will follow.”
It says it has “fulfilled its obligations and continues to perform in terms of the contract with an extensive and experienced team dedicated full-time to the project”.
“GijimaAst has been performing in terms of the contract for some two years and the department’s claim that the contract is invalid was therefore completely unexpected,” it says.
Gijima is working with international companies, including IBM, Siemens and identity management specialist Daon.
“The board is considering all options … and should the department of home affairs persist in disputing the validity of the contract, GijimaAst will consider … seeking a declaratory order from the high court affirming the validty of the contract.” — Staff reporter, TechCentral
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