Sentech in Altech high court challenge - TechCentral

Sentech in Altech high court challenge

Altech UEC, a Durban-based manufacturer of digital decoders and set-top boxes, has filed papers in the Pietermaritzburg high court against state-owned broadcast signal distributor Sentech.

Sentech has been given until next Thursday, 28 October to provide UEC with 70 000 “conditional access keys” needed to manufacture decoders, or face a court battle.

Letter from Sentech to UEC, 3 June 2009 - click for PDF

UEC, a subsidiary of the JSE-listed Altech group, claims it won a tender to manufacture the decoders, but Sentech chairman Quraysh Patel disputes that there was ever a contract signed. Patel says the company did not provide UEC with a formal contract and so there is no legal agreement in place.

Sentech signed a purchase order worth more than R38m for the supply of the decoders. The purchase order was later revised to reflect a lower amount of R32,8m due to “some royalties” not being payable.

Sentech's purchase order (revised) - click for PDF

UEC claims it has already spent R32,7m fulfilling the order.

Patel told a parliamentary hearing last week that Sentech is planning to exit noncore businesses and it’s understood that its Vivid satellite television platform could be one of those that will be shut down.

In a notice of motion to the high court, UEC has demanded that Sentech provides the access keys it needs to complete the manufacture of 70 000 Vivid decoders.

Sentech's subsequent letter to UEC - click for PDF

Sentech has to replace all Vivid decoders because hackers compromised the Nagravision conditional access system it uses. As a result, international content providers could stop supplying programming to the SABC, which broadcasts its public service channels on the Vivid platform, for fear that their content could be pirated.

UEC wants Sentech to provide it with new Nagravision keys in order to complete the order for decoders. But Patel says Sentech has no intention of doing so and will oppose UEC’s application.

In the court papers, UEC alleges that Patel had said in a meeting between the two parties that Sentech had no obligation to explain anything to UEC and that his only obligation was to Sentech’s board and government.

UEC's reply to Sentech - click for PDF

According to the papers, Patel stated that during the exercise of his due diligence he had come to the realisation that Sentech had not complied with the Public Finance Management Act in ordering the decoders.

Patel was of the view that UEC “had known it was dealing with a state-owned enterprise and that as part of [its]due diligence, it should have been aware of the requirements of the act.”

UEC MD Rodger Warren declines to comment on the dispute, saying simply that all relevant material is available in the court papers.  — Duncan McLeod, TechCentral

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