DIS, Dignia Systems smoke peace pipe
Mpho Mokwape | Monday July 3, 2023 06:00
Dignia Systems, a global company well known for the supply of security equipment and defence solutions, has been in a legal battle with the DIS demanding an amount of about P118 million and acceptance of the remainder of the orders under the contract entered into during Isaac Kgosi’s reign.
The contract that DIS entered into that totalled about P247m was allegedly not fulfilled after it came to light that the Systems company was allegedly the centre of the P250 million National Petroleum Fund (NPF) money laundering scandal.
At that time, in 2019, before the DIS suspended the contract, it was alleged that the funds from the NPF were used by the DIS to purchase security supplies from Dignia Systems.
Now, the two parties are said to be in an out of court talks to settle the dispute that has been dragging before court since 2019 when Dignia Systems filed notice to sue the State for breach of contract and demanded honouring of the contract terms. Information reaching Mmegi has revealed that the DIS allegedly chickened out of the lawsuit following one of many NPF court rulings that could impact its case negatively and subsequently reached out to Dignia Systems for settlement talks.
“The DIS has its back against the wall on this case. There have been many rulings in relation to the NPF cases that may affect the outcome of the case especially against the DIS and that could be the main reason they sought to settle. Dignia Systems have a strong case as they believe everything done was above board and the State should have honoured the contract. The rulings do not bind other judges but it definitely can have an impact on others following matters regarding the NPF,” said the source.
At the moment, it is reportedly not clear as to what the ongoing settlement talks would yield and whether the remaining deliveries to the DIS would be made and money paid to Dignia Systems.
At the back of the case is that Dignia Systems company has alleged that the DIS entered into a contract with them legally and that there was no reason to suspend it and wanted all the remaining deliveries to effect and the remaining payment to be made. In the company’s court papers, it alleged that before the suspension of the contract, outstanding deliverables were three reinforced security (drones) and together with their accessories and some Special Forces equipment that come with training.
“The drones with their accessories, the remainder of the Special Forces equipment have been in place and ready for delivery and the training scheduled as per the contract was to be done,” said the company. The court papers also revealed that on or around November 21, 2017, the DIS payment of half the contract price was made leaving a balance of USD 11,320 0000.00 and that the payment was made through a company called Khulaco Management Services and the company was approved by the DIS and payment was to be made to the project by the State. Dignia Systems said what followed then was shocking as the DIS decided to breach the contract by suspending it on suspicion of illegality. According to the company, on August 13, 2018, they received a letter from the DIS indicating that it had taken a decision to suspend the contract, reasons being that it did not follow procurement procedures and that petroleum funds were illegally used to pay for the equipment ordered from them. “As the company, we responded to the letter requesting explanation and further specifics regarding the contract that was already in motion.
We also wrote to the Attorney General and the spy unit requesting audience to resolve the dispute and also deliver the remaining stuff of the contract but our efforts were rejected by the DIS,” said Dignia Systems. The company said it wanted its money because despite the suspension of the contract by the DIS, it continued to receive services and accepting deliveries as per the contract. “Between August 9, 2018 and September 9, 2018 the company delivered part of the contract and the DIS accepted such delivery items including equipment for Special Forces and training,” reads the court papers in part. The company argued that they have complied with the terms of the contract and was ready to deliver the remainder of the contract, therefore, the demand of payment of the remainder of the contract of about P118m interest on at the rate of 10% per annum from November 2017 to date of court finalisation of the matter. Meanwhile, armed with the lawsuit, the DIS responded by raiding the company at its headquarters in Israel back in November 2019. The search was allegedly to establish whether or not the contract the spy agency had with the company was properly executed and was also meant to ascertain if the former spy chief Kgosi, had been paid any bribes by Dignia Systems officials.
The Botswana government, on behalf of the DIS and the Directorate on Corruption and Economic Crime (DCEC), had reported to have requested mutual assistance from the Israeli government to search Dignia Systems premises and the home of its chief executive officer (CEO), Itzik Tzadick. The raid was also alleged to have happened due to the fact that the government had stated that the person who signed the contract being Kgosi was not authorised by the government to sign any contract with Dignia Systems on behalf of the Botswana government. The State also argued that the contract was not sanctioned according to the Public Procurement and Asset Disposal Board (PPADB) Act.
“They said the contract was accordingly invalid. The tender in this case was never floated in terms of the enabling laws,” said the Botswana government. However, Dignia Systems was taken by surprise as the raid in Israel came after the DIS Director General, Peter Magosi had allegedly assured Dignia Systems that their lawsuit would be settled. Dignia Systems is currently demanding P118 million from the DIS, being the balance of amounts owed from military equipment and the training contract.