National Police Commissioner Fannie Masemola told Parliament’s ad hoc committee last week that he’d cancelled the R360m Medicare24 Tshwane District contract in April, after an internal audit that flagged poor performance, bid fronting and serious procurement irregularities.
The lucrative three-year deal, signed n June last year, was for the provision of “health risk management” services to the SAPS.
Masemola said the contract has not yet been re-awarded, but a re-advertisement process will start after a forensic audit is finalised in October/November, reports IOL.
He testified that the multi-million-rand deal had followed the usual procurement chain, including specification, bid evaluation and adjudication, and was ultimately signed off by the divisional commissioner for supply chain management.
“It doesn’t land on my desk at all,” he said.
While he had no direct role in awarding the contract, he told the committee he’d received a call from a member of IDAC, believed to be a Mr Perumal, raising concerns about Medicare24’s tax compliance and previous involvement in procurement scandals at Tembisa Hospital.
“I made inquiries…and the response I got was that the company had submitted a valid tax clearance certificate,” he said.
“Medicare24 is not blacklisted by the National Treasury … it is free to bid, like anybody else.”
At the time, Masemola said, he was unaware that Medicare24 was linked to businessman Vusimuzi “Cat” Matlala and his suspected ties to the Tembisa fraud.
“I didn’t know who the owner of the company was, or who Vusimuzi Matlala was,” he said. “Only later I learned he was the person behind Medicare24.”
In December 2024, Police Minister Senzo Mchunu had requested a meeting to discuss the contract, with a virtual meeting taking place on 24 December.
“We discussed the issue around the contract, the service delivery,” Masemola said, adding that thereafter, he had instructed SAPS internal audit and risk management to probe the matter further, and a preliminary internal audit report, finalised in January 2025, raised serious concerns.
According to Masemola, it found that the Bid Evaluation Committee “lacked the appropriate skill and competence to evaluate the bid”, that there was no individual scoring, and that the due diligence process failed to consider the bidder’s ethical history.
It also found evidence of misrepresentation and fronting, and warned that the use of external facilitators had exposed SAPS to a “corruption risk damaging to SAPS’ reputation”. Yet despite these red flags, SAPS had already paid R50m to Medicare24 in January.
Masemola confirmed this payment, saying the company had delivered services, including the processing of 5 500 police college recruits, albeit after being issued with written warnings over poor performance.
“There were problems around that, but eventually they delivered the service,” he said.
In March, after the preliminary audit findings, Masemola issued a notice asking the company to provide reasons why the contract should not be terminated. After legal consultations and receipt of the final audit report in April, he cancelled the contract, which has not been re-advertised yet.
He said SAPS would pursue disciplinary action against staff implicated in procurement irregularities – only once the forensic report has been completed.
“We have experiences in the past where you do that [too early], and later you find more people involved. So the advice was that we finalise the forensic audit first.”
Tighter procurement controls will also be initiated, including a mandatory “propriety audit”, before any future large contract is awarded, and he is reviewing delegated signing powers for high-value contracts.
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