Davies to cancel Cipro tender

2010-05-18 17:13

Johannesburg - Minister of Trade and Industry Rob Davies told parliament on Tuesday he intends to cancel an allegedly fraudulent R154m contract awarded by the Companies and Intellectual Property Registration Office (Cipro) for a new IT system. He will also lay criminal charges against the officials concerned.

Addressing the public accounts committee (Scopa), Davies confirmed Cipro CEO Keith Sendwe and CIO Michael Twum-Darko have been told lawyers are preparing a criminal case against them for their role in manipulating Cipro systems to ensure that a little-known company - ValorIT - had privileged access to information.

Despite ValorIT's bid being R90m more than competing bidders, it won the tender after what allegedly appeared to be a manipulation of tender committee score sheets.

While Scopa MPs slammed the department of public enterprises as well as Cipro for a "cavalier approach to procurement", Davies also disclosed that a forensic audit he had commissioned into this contract had confirmed "a pattern of relationships" between Sendwe, Twun-Darko, ValorIT and a sub-contractor, Mantra Consulting. Mantra consulting recently won a high court order against ValorIT.

No checks carried out

During more than four hours of intense interrogation by MPs on Scopa, it was also disclosed how absolutely no background checks were performed on ValorIT, its track record or its financial status and ability to deliver on such a contract.

Furthermore, 10 days after being awarded the contract, Cipro paid it R56m. Although this was questioned by some executives, Twum-Darko is alleged to have insisted the payment be made after explaining that it was for a box of CDs containing software.

"Just that alone should have raised a red flag, with a supplier being paid a record amount of money [about a third of the total contract value] in record time," Davies said.

He assured parliament steps were being taken to ensure the money stayed in the country.

Davies said he noticed things were going wrong at Cipro at the end of 2009 and, when he was not satisfied with the answers he was being given by Cipro, he decided to look into the matter more thoroughly.

While the findings of the forensic report - which apparently showed much more than expected – will not be made public by Davies, he promised Scopa that all additional information gleaned from MPs would be acted upon.


  • Impressed - 2010-05-18 17:20

    Finally, a government minister that noticed by himself that something is wrong and took decisive action - I wish we could have more of these! Well done Rob Davies!

  • Graham - 2010-05-18 17:25

    Why it took 6 months to figure all this will always remain a question! In the mean time the accounting profession is made to look like idiots when information cannot be received to inform clients accordingly.

  • Benzo - 2010-05-18 17:56

    Davies: "While the findings of the forensic report - which apparently showed much more than expected – will not be made public"....WHY NOT???? It is -after all- our money!!!! Anybody to be protected????

  • Donald Paul - 2010-05-18 18:31

    Anyone prepared to wager a bet that this will be dragged through the courts for years and then quietly disappear, the money will never be recovered and the accused will be offered new jobs?

  • ike - 2010-05-18 19:40

    the only way people will get jailed is if the state stops paying these crooks' legal fees a la Selebi, Zuma, McBride et al.

  • English - 2010-05-19 05:39

    Well done Rob Davies - but doesnt it show you just how dumb these "locals" are - corruption and blatent theft are what this government is all about

  • AJ - 2010-05-19 06:21

    The cadre's will look after each other. Regardles of the levels of theft and incompetence, South Africa has more than enough money for a few thousand politically connected and their friends to not worry about it ever running out, rgardless of their performance. AS long as the they stay in favour with the chief. It's simply one big share scheme really. Everyone get's a little slice as per the position or influence that may be needed from time to time. You can bet one thing, they all get paid as per their station. Follow that 56 million it would never just go to Valor it (2 guys), it has other destinations for sure.

  • martin albert - 2010-05-19 07:09

    Minister Davies take bow - I may have been wrong about political will! However, lets see if gov has the balls to follow thru on all of the crooks involved, including the senior Departmental official who tried to block the process.

  • @donald - 2010-05-19 07:59

    Donald...nobody in his right mind will wager against your statement. With R 56mil you can certainly buy a judge or two and manipulate the system. Big problem is overall lack of integrity through all ranks in SA

  • Pieter - 2010-05-19 08:20

    No Donald Paul, the accused will not be offered new jobs, they will be suspended with full salary for the next 15 years. On the bright side, if Davies to press criminal charges it is at least a step in the right direction to combat this tender fraud which is crippling out country.

  • Harry - 2010-05-19 08:35

    See Mr Twum-Darko's vision: Revd Dr. Michael Twum-Darko’s Experience Chief Information Officer Companies and Intellectual Property Registration Office (CIPRO) (Public Company; 501-1000 employees; Government Administration industry) January 2008 — Present (2 years 5 months) Provides unique input into the core strategic direction of CIPRO and interprets the potential for technology to transform the business, drive innovation and spur growth. As the CIO, I'm to help map out the gaps between the organization's business growth agenda and its IT infrastructure and become not “a reactive cost-cutter” but a proactive advocate of how and where the application of IT can create the business value of tomorrow. at a cost that is....a BIG cost....

  • charles - 2010-05-19 08:38

    cipro will be moving to another building .watch the comedy

  • Black - 2010-05-19 10:28

    Almost all the people involve are from Zimbabwe, they milking our country dry. We let cum in and rape our country like this....I've dealt with those guys and they have a stinking attitude towards SA and South Africans.

  • Brij - 2010-05-19 11:36

    Donald, I think you are wrong. They will each be given a R10k fine and asked to attend some fraud management classes whilst their pals continue receiving the full contract value and messing it up completely. Thats how it works in SA... dont you know.

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