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Legal battle stalls for South African BEE firm amid IDEMIA acquisition talks

A South African BEE firm's R39 million damages claim against a French multi national company in South Africa is in limbo amid acquisition talks.

The case involves a R115 million biometrics tender awarded by Airports Company South Africa (ACSA) to French firm IDEMIA two years ago with local BEE firm, INFOVERGE being given 30% of the contract.

However, shortly after clinching the deal, the two parties fell out with IDEMIA withdrawing INFOVERGE as their local partner. INFOVERGE then challenged this, resulting in the contract being cancelled by ACSA and INFOVERGE subsequently suing IDEMIA for R115 million in damages over their losses.

Following months of a protracted legal battle, the matter has now stalled, explains INFOVERGE CEO, Musa Mahlaba when approached for an update on their legal challenge.

"We've been told that the South African arm of IDEMIA is under acquisition of sorts. We've been trying to get some clarity on this but they have not been forthcoming and have not responded, which leaves our legal matter in some kind of limbo as we wait. We have been advised to give it some time before we decide what options we pursue," he told IOL.

IDEMIA also failed to respond to an IOL query on the matter.

The fallout with ACSA also led to the suspension of ACSA's Chief Information Officer in 2024 amid allegations of wrongdoing in the tender process in which IDEMIA emerged as the winning bidder.

The cancellation of the ACSA contract with IDEMIA also set off alarm bells over their other government tenders prompting Transport Minister, Barbara Creecy, to question another state contract awarded to IDEMIA - a whopping R486 million contract for the country's driving licence machine. Following an investigation into that, an AG report found that IDEMIA failed to meet key bid requirements.

This has led to the current impasse over that contract with the Department of Transport looking to cancel the IDEMIA contract. That matter is ongoing.

Source: www.iol.co.za
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