Drip Group, which owns South Africa’s popular sneaker Drip, is being sued for failing to pay for a bespoke software it procured to monitor its stock, among others.
The company, which is owned by businessman Freddy Lekau Sehoana, has been dragged to the Johannesburg High Court by a Joburg-based company SD Africa after failing to pay the latter more than R1.9-million for the sophisticated software.
In the court papers which we have seen, SD Africa says Drip Group, which is the second defendant in the suit, entered into an agreement with it in March 2022 to urgently provide information technology support services for the creation of an integrated distribution, stock monitoring and management system for its sister company Kiddies Republic.
This after Kiddies Republic, which is the first defendant in the case, indicated that it wanted to trade directly with the public in the children’s clothing market in 2022.
Kiddies Republic and Drip Group also wanted SD Africa to train its staff on how to use the system and also provide maintenance and support to the companies for 12 months until March 27 2023.
The parties agreed that if the proposal becomes successful, Drip Group would implement the development of similar integrated distribution, stock monitoring, and management system in its subsidiary companies.
The plaintiff and the defendants, through their representatives, would attend regular virtual progress presentations to ensure that the software was being developed in accordance with the defendants’ needs and demands, and remedy errors and mistakes if any.
The agreed amount for the software development and implementation, as well as the services were R1 929.700 (One million nine hundred and twenty-nine thousand, seven hundred rands) including value-added tax.
“The first defendant and the second defendant would be jointly and severally liable for the agreed upon amount for the software development and the services,” read the court papers.
On or about May 5 2022, read the court papers, SD Africa notified Kiddies Republic and Drip Group that the software had been developed and ready to be implemented.
The service provider then demanded that payment of over R1.3-million be paid before April 30 2022, more than R289 000 before May 31, and another R289 000 before June 30, but the two companies failed to remit payment.
SD Africa said its lawyers wrote a letter of demand to Kiddies Republic and Drip Group on June 3 and asked that payment be made within 10 days, but the request fell on deaf ears.
“Despite demand, alternatively demand herewith, the defendants have failed and or neglected and/or refused to make payment of the amount due to the plaintiff,” show the court papers.
Sehoana declined to comment and said he is not aware of the lawsuit.
In the past, Sehoana was taken to court by a Pretoria-based investor, Alfred Mashiya, who demanded a third of Sehoana’s business after he allegedly failed to pay back the money that Mashiya had loaned him.
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