It is clear that VASTech sold it's Zebra equipment directly to Libya's Government. Their product being designed for intercepting communications they also knew that it would be used to do exactly that. Did they do anything illegal? No, "William Barnard, chairman of VASTech, said that they supply systems to legal governments that are not under international sanctions of any kind". Sanctions imposed on Libya for the Lockerbie terrorist bombings were lifted in 2003 and there is therefore nothing illegal about VASTech's dealings.
The real question is about the ethics of their dealings. Is it ethical to sell spying equipment to a dictator who openly supports terrorist groups and has a
1 million USD bounty on his political opponents? Would you feel comfortable with your telephone and online conversations being monitored by a dictator who according to Amnesty International assasinated at least 25 people living abroad (countless people in libya) and has a 3 year prison sentence for having any "political conversation with foreigners"?
South Africa has many things to be proud of, one of them being our outstanding engineering talent. But when this talent is used to directly support the violation of human rights we should hang our heads in shame.