Gauteng Health has admitted it lacks the power to blacklist suppliers linked to the R2bn Tembisa Hospital scandal, who continue to do business with the department, reports The Star.
This leaves South Africa’s procurement system wide open to exploitation by fly-by-night companies, said ActionSA MP Kgosi Letlape, who through formal parliamentary responses from the Health Minister. In the Tembisa heist, 207 service providers were accused of stealing taxpayer funds by manipulating procurement processes, without consequences for the majority.
In a written reply, Health Minister Aaron Motsoaledi outlined steps taken since the Special Investigating Unit (SIU) interim report, including high-level meetings with senior management, the National Health Council (NHC), and CEOs and CFOs of central hospitals to discuss ways to prevent future corruption.
A workshop is also scheduled for 27-28 November to develop stronger safeguards.
Motsoaledi said the NHC had asked the SIU to blacklist all companies involved in the syndicate, however, only the National Treasury has the authority to blacklist suppliers.
“In the meantime, SIU has been asked to submit to provinces the list of such companies so that even if there is no blacklisting, HoDs pay due diligence and investigations before they finalise awards to these companies if bid adjudication committees have recommended them,” the Minister said.
Letlape slammed the ongoing exploitation of the procurement system, saying the findings reveal entrenched rot that continues to cripple public accountability.
“It is deeply alarming that, despite the SIU’s report that more than R2bn was siphoned from Tembisa Hospital through 207 service providers and 4 500 purchase orders, our procurement system remains wide open to more exploitation,” he said.
He noted that many of the companies flagged by the SIU were registered just days or weeks before them receiving multimillion-rand tenders – without operational history, tax compliance, or proof of prior delivery.
“These revelations expose deep flaws in the system, letting inexperienced companies win lucrative tenders and even allowing corrupt firms to keep doing business with the state,” he said.
Letlape condemned the government’s inaction, saying the SIU’s recommendations have largely been ignored, allowing corrupt companies and individuals to continue trading.
“Motsoaledi’s replies show that even after the SIU exposed these criminal networks and recommended blacklisting, no decisive action has been taken to stop them. The Department of Health admits it cannot blacklist suppliers, that power lies solely with the National Treasury. This loophole lets those under investigation continue trading while ‘awaiting’ Treasury action,” he told The Star.
He also highlighted a shocking accountability failure: out of 467 individuals and companies recommended for the Restricted Suppliers Register, only one has been listed. This breakdown in consequence management fuels impunity and erodes public trust. Letlape warned that systemic weaknesses, outdated systems, and poor co-ordination create fertile ground for recurring corruption.
“Until the government implements a transparent, centralised vetting system that flags, suspends, and blacklists companies under investigation, procurement abuse will continue unchecked. Legislative reform is urgently needed to prevent shell companies from exploiting tenders and to ensure individuals linked to corruption are permanently barred from public contracts,” he said.
Brazen and confident
In the latest system manipulation revelations, tender tycoon Vusimusi Cat Matlala, heavily tied to the siphoning of millions from Tembisa Hospital, had rented an SAPS medical clinic six months before he even secured a R360m police health services tender, reports News24.
He was so confident of his impending windfall that he secured premises on the grounds of the police’s Pretoria West Training Academy on 11 December 2023: the tender was only awarded in June 2024.
For R40 000 a month, his minnow company, Medicare24 Tswane District, would occupy a 750m² building – a space for which the Department of Public Works paid R46m to renovate.
According to the lease agreement, Matlala’s company would have residence for five years, from January 2024 until the last day of December 2029.
Matlala signed the lease on 30 November 2023 and Department of Public Works officials followed suit a fortnight later.
But Medicare24 Tswane District never took occupation of the facility.
Little more than a month after he locked down the disused hospital on prime police property, the SAPS published a notice for tender 19/1/9/1/94TP (23) – a recurring three-year deal to provide health services for 180 000 officers and support staff.
The contract had a listed worth of R360m: R600m was available in the budget, according to documents obtained by News24.
Matlala – via Medicare – bid for the award and won, besting JSE-listed insurers.
He landed the deal while plum centre of the R2.3bn Tembisa Hospital graft controversy and while facing probes by the SIU and the Hawks for procurement fraud.
Yet other red flags that went unnoted by the bid evaluation and adjudication committees, included that Medicare 24 Tswane District was less than five-years-old and was run from a Boksburg strip mall – and that Matlala had a criminal record.
After News24 reported in December on Matlala’s tender win and a Crime Intelligence operation at his home, linked to the kidnapping for ransom of his business partner, Jerry Boshoga, now-suspended Police Minister Senzo Mchunu set in motion an audit of the procurement process.
It found:
• When the specifications were tailored, they did not meet SA National Accreditation System standards and requirements;
• The bid was not advertised for the requisite 21 days, and once received, was not safeguarded and securely stored;
• The specification was not drafted in a manner that would promote the broadest possible competition while assuring critical elements of performance or other requirements are achieved; and
• Due diligence of 22 separate bids was lacking, and a critical examination of Matlala’s bid was perilously weak. Investigators found that scorecards from the panel members and their evaluations “could not be found” in the bidding file.
Beyond that, auditors reported “evidence of misrepresentation, altering of bid documents and fronting exist in the documents submitted by the winning bidder”.
The fronting relates to Matlala’s positioning as “president” of the Medicare24 Group, a conglomerate of occupational health clinics headquartered in Mpumalanga.
In fact, Matlala was a franchisee and was the sole director of what was essentially a shelf company, which had adopted company branding and then bid for the tender.
In a company portfolio submitted by Matlala in securing the lease, he is identified as “president”.
“Vusimusi Matlala is a renowned entrepreneur and investor with international business accolades as well as within the African continent,” it states.
“He strongly believes in playing a role in his country of origin by investing, creating employment and prosperity, which in turn will help address many of the issues the society faces.”
The document does not reflect Matlala as a franchise owner, and if it mirrors the submission in terms of the SAPS tender, it is potential basis for allegations of fronting.
The Department of Public Works & Infrastructure told News24 the lease agreement would be investigated.
“As soon as the Minister (Dean Macpherson) became aware of said lease, he immediately … instructed the department’s REMS (real estate management services) unit to provide copies of all relevant documentation.
“The Minister is … considering various documents relating to this lease and is scrutinising the processes followed. Additionally, a cursory consideration of documentation has identified potential shortcomings in respect of internal department controls and/or processes; this is deeply concerning and will be investigated further.”
Backhand cash
On 12 May, Police Commissioner General Fannie Masemola cancelled the tender three months after internal auditors, in a draft report, highlighted risks associated with doing business with Matlala.
Masemola was urged to rip up the contract and halt payments, but had already been paid R18m.
When the deal was scotched 103 days later, R50m had been channelled to Matlala.
A News24 investigation revealed:
• Brigadier Petunia Lenono, a member of the bid specification and evaluation committees, resigned within days of the award and, some months later, took up a job with Matlala;
• Matlala’s lengthy history of brushes with the law included an arrest with one of Radovan Krejcir’s most feared hitmen;
• Matlala splashed out on cosmetic surgeries for his wife, multiple high-end mansions and supercars, while staff and suppliers went unpaid;
• Matlala channelled cash to Captain Brian Cartwright through a proxy company. Cartwright was the facilitator of the tender from SAPS supply chain management; and
• He lavished former Police Minister Bheki Cele with hotel penthouse stays.
The tender was adjudicated during Cele’s term.
Two days after the tender was cancelled, Matlala was arrested and charged in relation to the 2023 attempted assassination of his former lover, actress and influencer Tebogo Thobejane.
Matlala also faces charges borne of two other botched hits, that of taxi boss Joe Sibanyoni and Seunkie Mokubung, also known as DJ Vettys.
See more from MedicalBrief archives:
Blacklisted firms still allowed to bid for Gauteng Health tenders
Keep a particularly hot spot in Hell for health tenderpreneurs
Bid committee member joins firm awarded top SAPS health tender
Tembisa Hospital tender tycoon landed R360m SAPS contract
Three companies score R100m contracts, latest Tembisa exposé shows
‘Corruption mafia’ claimed to be manipulating hospital tenders