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The Special Investigating Unit (SIU) said this week it was continuing to pursue money that was irregularly spent during Covid-19. This followed the Special Tribunal’s dismissal of exception applications from two companies involved in the Limpopo Department of Health’s pandemic response.
Judge Kate Pillay, a member of the Special Tribunal, issued orders recently regarding Pro Secure’s supply of personal protective equipment (PPE) to the Limpopo Department of Health in response to the pandemic and MTN’s provision of cellphones for Covid-19 screening.
She dismissed both exception applications and ordered the companies to pay the SIU’s legal costs. The applications were aimed at overturning the SIU’s claims against the companies and attempts to recover the money spent.
Both applications boiled down to the companies’ arguments that the summons or pleading contained insufficient facts to support the SIU’s claims against them.
MTN
The order against MTN stems from an investigation by the SIU into the communication giant’s unsolicited proposal in April 2020 to supply the Limpopo Department of Health with 10,000 cellphones for Covid-19 mass screenings in the province. This cost the department R10-million.
MTN argued that the submission of an unsolicited bid was not unlawful, unconstitutional or illegal. It said the goods were delivered in accordance with an accepted proposal and there were no findings against it suggesting wrongful or illegal conduct that entitled the SIU to the relief sought.
On Friday, SIU spokesperson Kaizer Kganyago said an investigation revealed that Dr Thokozani Florence Mhlongo, the former head of the Limpopo Department of Health, had exposed the department to wasteful expenditure by authorising the procurement of and payment for the 10,000 cellphones.
“This falls outside the prescripts of the Public Finance Management Act (PFMA). The Department of Health accepted the proposal and subsequent delivery of the devices, and 9,588 cellphones were not distributed to the intended users.
“The department could only manage to distribute 388 of the 10,000 cellphones between September 2020 and March 2021, and the cellphones were distributed without the required screening application.
“After the physical counting of cellphones in storage by SIU investigators in March 2021, the department distributed 9,588 cellphones to community health workers for Covid-19 vaccination without the required application installed.”
Dismissing MTN’s application, Judge Pillay said while the company argued that it delivered the 10,000 cellphones, the “just and equitable” relief sought by the SIU in the case should be determined in court rather than by way of an exception application.
Kganyago said the ruling confirmed the SIU’s position on the matter. He said the investigation found Mhlongo had exposed the department to R10-million of wasteful expenditure.
Pro Secure
The SIU said the order in the Pro Secure case supported the SIU’s position on the Limpopo Department of Health’s irregular procurement of PPE.
“The SIU’s investigation uncovered irregularities in the appointment of service providers such as Pro Secure (Pty) Ltd, Clinipro (Pty) Ltd and Ndia Business Trading (Pty) Ltd for the supply and delivery of PPE, resulting in approximately R182-million in irregular and/or fruitless and wasteful expenditure by the department,” said Kganyago on Monday.
Judge Pillay’s ruling unpacked the investigation’s findings. A request for quotation (RFQ) was sent to Pro Secure for 5,000 automated hand sanitisers. The company submitted a quote of just over R7-million for electronic disinfectant dispensers and liquid sanitisers.
“The memorandum of appointment included the appointment of suppliers for manual dispensers, which contradicted the specifications listed in the RFQ,” said the judge.
“The memorandum indicated that the second defendant would be contracted to supply 30,000 manual hand sanitisers at R250 per unit and 900,000 refill bottles at R170 each.
“However, the second defendant delivered 30,000 dispenser holders at R420 per unit and 900,000 litres of hand sanitisers at R170 each.
“The second defendant was paid R161,485 545.16, which was significantly higher than the bid for R7,057,722.”
The SIU alleged, “There was evident favouritism toward a specific bidder and a failure to provide equal opportunities to all eligible bidders. Such actions would be contrary to the provisions of s 217 of the Constitution and other procurement regulations as set out in the particulars of the claim,” said Judge Pillay.
She dismissed Pro Secure’s claim that the SIU didn’t have a case against it.
Pension frozen
Kganyago said, “This ruling supports the SIU’s stance on the irregular procurement of PPE by the Limpopo Department of Health during the pandemic.”
He noted that Mhlongo, the accounting officer in the department who was also in charge during the Pro Solutions procurement, had her pension benefits frozen as a result of a preservation order granted by the Special Tribunal to the SIU in October 2022.
The order prohibits the Government Employees Pension Fund from paying out any benefits to Mhlongo, “pending the final determination of civil proceedings … for recovery of damages or losses and disgorgement of profit derived from unlawful contracts and secret profits”.
Mhlongo resigned as health department head in June 2022. She was facing a disciplinary hearing stemming from the SIU’s investigations.
Read more: Limpopo R182m PPE probe leads to pension freeze for former health head Dr Thokozani Mhlongo
Kganyago said the SIU had instituted civil proceedings against Mhlongo and Pro Secure, alleging irregularities and contraventions in the awarding of a tender.
In 2020, President Cyril Ramaphosa directed the SIU to investigate allegations of corruption, maladministration, malpractice and payments made by state institutions related to PPE procurement.
The SIU is empowered to institute civil actions in the high court or Special Tribunal to address any wrongdoing related to corruption, fraud or maladministration uncovered during investigations. DM
