A multi-million rand contract awarded to ANC benefactor Robert Gumedes company is now the subject of a probe. File picture: Paballo Thekiso

Johannesburg - A multi-million rand contract awarded to ANC benefactor Robert Gumede’s company is now the subject of a Special Investigating Unit (SIU) probe authorised by President Jacob Zuma

Zuma signed the proclamation for the SIU to investigate the tender awarded by the Department of Rural Development and Land Reform to the billionaire’s JSE-listed IT firm, Gijima.

The SIU will investigate the R360 million contract that Gijima has failed to complete despite the department paying it millions of rand.


Eileen Wilton, Gijima CEO, said they only learnt about the investigation through The Sunday Independent’s query.

She said neither the SIU nor the department had informed them about the probe. “Gijima welcomes the investigation and are willing to cooperate and look forward to a speedy and successful conclusion of the investigation,” said Wilton.

Department of Rural Development and Land Reform had not responded at the time of publication on Saturday night.

Gumede, who has previously publicly said he has donated to the DA and other political parties, has been an ANC member long before he became a successful businessman.

He has donated to the ANC under the leadership of presidents OR Tambo, Nelson Mandela, Thabo Mbeki and Zuma.

In January, Zuma said the ruling party would get tough on corruption, and would require any member to step down from leadership positions in the ANC, government and society if found guilty of corruption by a court of law. Neither Gijima nor Gumede, a former prosecutor, have been found guilty of graft.

Zuma has signed about 30 proclamations authorising the SIU to investigate graft across the three spheres of government since 2009.

Gumede is a major shareholder in Gijima through Guma Tech, Guma Support, Guma Investment Holdings and Guma Tech Group, which jointly own about 36.5 percent of the company.

He also has interests in Seekers Travel, Gen Technologies and Tourvest, among others.

This is the second controversial major IT contract involving Gijima and a government department which appears to have collapsed.

In 2011, the company settled out of court with the Department of Home Affairs after it failed to deliver the R2.3 billion Who Am I Online project, an online registration system, by the set deadline.

The company reportedly made losses of about R391m, while the department claimed that by cancelling its contract with Gijima, it had saved about R2bn.

At the centre of the row was escalating project costs which saw the initial figure for the tender rising from an initial R2.4bn to a total of R4.5bn.

The department cancelled the contract after it realised that the company would not be able to deliver the system before the start of the 2010 World Cup, as had been envisaged.

The company, which specialises in high-tech ICT systems, was in 2010 awarded a contract to convert 500 million pages of deeds records in the department’s deeds offices across the country into micro-films.

This was to ensure government kept electronic copies of all deeds records.

The contract was awarded in 2010 but to date, the so-called e-Cadastre system is not functional despite the department paying out money to Gijima and its subcontractors.

Gijima and one of the subcontractors, Anderson Scanning Technologies (AST), are currently battling it out in court over, among others, who is to blame over the collapse of the system.

The project, dubbed Vulindlela, was due to be completed this year, but meeting that deadline has proven elusive.

The Sunday Independent reported last year that AST, which was subcontracted by Gijima in 2011, has in court papers described the project as a failure.

The department’s annual report reveals the shambles that the project has been, with Gijima at some point being overpaid by R51m.

The department’s internal audit committee declared the e-Cadastre project as an area of concern in its annual report, and recommended a forensic investigation into it.

According to the proclamation, the SIU is supposed to investigate theft, fraud, corruption or maladministration in the affairs of the department in relation to the lodging of deeds on the Deeds Registration System of the Pretoria, Cape Town and Bloemfontein deeds registries.

It is also tasked with investigating the procurement of and contracting for the ICT systems and projects, which include the e-Cadastre system, the Deeds Registries System and the Enterprise Architecture product of the department.

The SIU is also expected to investigate unauthorised, irregular and wasteful expenditure as a result of payments made to the service providers for the ICT systems.

According to the department’s annual report, irregular expenditure of more than R4m was incurred for services rendered on the Deeds Registration System without following human resources and supply chain management processes.

Over R31.8m, paid to Gijima for Enterprise Architecture, was also considered irregular due to supply chain management processes not being followed.

According to the settlement between Gijima and Home Affairs, the company was still involved in the project but it was mainly being managed by the department and the SA Revenue Services.

The department resumed its information systems modernisation, formerly Who Am I Online, in 2012/13 following the resolution of a dispute between the department and Gijima, which had put the project on hold since May 2010.

It hopes the project will provide an integrated IT platform to decrease the turn-around time for issuing IDs, birth, death and marriage certificates, passports and visas, asylum permits, refugee documents, citizenship certificates, and residency permits.

The department has made R1.1bn available to complete the development of the integrated systems by March next year.

Between 2008/09 and 2011/12, the department spent R1.4bn on the project including the R835m for the settlement agreement reached in January 2011.

In 2012, Gijima welcomed Public Protector Thuli Madonsela’s investigation into the Home Affairs contract, saying it was confident nothing untoward would be discovered and that investigation would exonerate both the company and its chief executive at the time, Jonas Bogoshi.

Later that year, a UK court awarded Gumede R53m in damages and costs against his former business partner John Sterenborg for selling him an insolvent company facing liquidation.

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Sunday Independent