Madibeng to take legal action against company that cost them R85 million

During a recent Madibeng council meeting, it was resolved to take legal action against an IT company that was irregularly awarded a two-year contract which cost the municipality R85 million.

This was revealed in a forensic report that was presented to the council last week.

According to the forensic report, compiled in 2018, the company, Flame IT that was contracted from 2015 – 2017, should never have gotten the tender in the first place, they inflated prices by up to 400%, and invoiced the municipality for items not delivered, amongst other findings.

Following the forensic report, the council resolved in 2018 that the acting municipal manager should institute legal proceedings against Flame It to recover all overpaid monies. This was never done and then in July 2021, Flame IT instituted legal action, claiming a further R54 million from the municipality for “utilisation of its equipment”.

“Instead of taking a decision to defend the claim and file a counter-charge against Flame It as the forensic report recommended and the council resolved, the acting municipal officer and administrator at the time entered into a payment agreement with Flame IT and undertook to pay R30 million as a final settlement,” the current municipal manager, Motlalekgomo Mmope, said in her report presented to council last week.

The agreement was signed contrary to the council resolution. Council also did not authorise the administrator and acting municipal manager to enter into such an agreement.

Just before the first payment of R10 million in December 2021, the current municipal management issued an instruction to attorneys to assist the municipality in reviewing the payment agreements and recovery of all monies owed to the municipality by Flame IT resulting from irregular payments.

“The matter will obviously be resolved by the court,” Mmope said in the report.