The SIU is planning to institute civil proceedings over Denel’s intellectual property used by the UAE government. Picture: Reuters
THE Special Investigating Unit (SIU) is planning to institute legal action to set aside a contract relating to the use of state-owned enterprise Denel’s intellectual property by the United Arab Emirates (UAE) government.
The corruption-busting unit revealed this when it briefed the standing committee on public accounts earlier this week on various investigations it was conducting at Denel and the Department of Defence.
“We will be instituting a civil litigation process through the Special Tribunal to set aside the decision or resolution and interdict the use of South African intellectual property by the UAE government, which is valued at R320 million,” SIU chief operating officer, Leonard Lekgetho, said.
SIU head Andy Mothibi said Denel lost intellectual property to the UAE government and that the matter really presented a very serious scenario.
“I instructed the legal service that this should be the test whether we follow through on the assets that have been lost to outside the country,” he said.
Mothibi also said there were various processes that were under way.
“We take this very seriously.”
He noted with concern that some of the individuals involved in the loss of Denel’s intellectual property were working for companies in the UAE.
“The legal process should essentially include our quest to recover our intellectual property and the money lost, and also these fugitives that have joined the UAE companies.
“We know we have got examples of cases of getting fugitives from outside the country becomes difficult. We will not relent because of that. We will really pursue them based on legal processes,” Mothibi said.
SIU’s chief legal counsel Ntuthuzelo Vanara said the case was really a sad state of affairs that presented complex legal challenges because the scheme was executed through agreements that indicated that disputes will be resolved through laws of foreign jurisdiction.
“You need to go to a foreign country to have this issue resolved … We are looking at various possible options. The one that seems more likely is through arbitration proceedings and ceding of rights. That will enable us to take part in these proceedings. It is not a definitive answer as we are still exploring different possibilities in a complex legal matter,” Vanara said.
The legal action comes after the SIU was authorised to investigate the affairs of Denel, and the Denel contract was one of the matters probed by the Zondo Commission.
Mothibi said the cases they investigated dated back almost five years ago.
“As complex as most all of the focus areas that are investigated, the investigations have been completed,” he said.
According to SIU acting national investigator Zodwa Xesibe, the Denel investigation emanated from allegations received way back in 2018.
“Some came from the results of audit done at the time and there was a need for this matter to be referred to the SIU,” Xesibe said, adding that they had obtained a proclamation in 2019.
Among the six focus areas was misappropriation of intellectual property rights in Denel’s missiles and combat vehicles.
Xesibe said the misappropriation of intellectual property arose from an agreement Denel entered into with a company that acted on behalf of the UAE government where Denel was to develop missiles and both parties formed a partnership.
She said Denel lost the intellectual property to the foreign company as a result of a decision that was without authorisation of its shareholder, which was the now-defunct Department of Public Enterprises.
The intellectual property contract was apparently signed by an official, who now works for a UAE government company.
Xesibe said the official was not authorised to sign the contract and the SIU was looking at setting aside that contract.
“The intellectual property is with Denel. The entity is considering litigating Denel for the intellectual property. We say the contract is irregular,” she said.
“We are exploring legal remedies to recover and interdict the use of the intellectual property valued at R328m,” Xesibe said.
She added that there were other entities that approached the SIU on the matter because they were defrauded.
“We have referred evidence pointing to criminal conduct against seven individuals,” Xesibe said.
mayibongwe.maqhina@inl.co.za