Anger over Motsoaledi’s visit to R180m Gupta-linked project

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Health Minister Dr Aaron Motsoaledi and North West Premier Supra Mahumapelo are in angry conflict after the Health minister inspected mobile clinics owned and run by a Gupta-linked company Mediosa, ‘without telling’ the NW premier first.

News24 reports that Motsoaledi went to visit mobile clinics owned and run by Mediosa, after a City Press exposé. Motsoaledi slammed the R180m project, awarded without tender, as “an ATM card through which the Guptas are withdrawing money from the Health Department”.

The report says Mahumapelo said he would complain to ANC headquarters’ Luthuli House after Motsoaledi “chose the populist approach” – he accused the health minister of “playing into” an “environment being brewed in the province” after the ANC’s Nasrec national conference “so that the province can be destabilised”. “I suspect something on this particular matter … that is why I am going to write to Luthuli House. I know of some political dynamics which I hope are not related to this impromptu (visit) to the province by the minister.”

The report says last week North West Health Department head Thabo Lekalakala was grilled in the legislature over the contract, which Motsoaledi slammed as “illegal” and said should be terminated. Mahumapelo last week called for a fourth investigation into it.

Motsoaledi arrived in Madibogo village outside Mahikeng to inspect the mobile clinics only to find the units standing idle and unstaffed and, the report says, Mediosa employees downed tools after not being paid. The company said the department hadn’t paid it.

“As a South African, if they were given R30m and all of a sudden they can’t pay workers, what was that R30m for?” Motsoaledi asked. He said Mediosa’s services – which include optometry, dentistry and X-rays – were “not needed” because his department already provided them and all the mobile clinic did was screen patients and refer them to state services. “They have optometric services but they don’t have spectacles,” he said. It has also emerged that the department was buying medical supplies for Mediosa.

The report says Mahumapelo hit back, saying: “That’s what must be revealed by the investigation. You don’t arrive at a site for about 10 to 15 minutes and, based on what you see, you instantly take a decision (that) people’s contracts must be terminated; people must be removed, the HOD must go immediately and if he doesn’t go you will go to court.”

Motsoaledi is quoted in the report as saying that he informed health MEC Magome Masike of his visit that morning. Motsoaledi’s spokesperson, Popo Maja, said the “necessary authorities” were told of the visit. “This wasn’t a surprise visit. Both the premier and the MEC were informed of this fact-finding mission,” Maja said.

 

Motsoaledi has described the Mediosa clinic as an “ATM card” through which the politically-connected fugitive family were withdrawing money from the Health Deaprtment, says a Polity report. Speaking on a walkabout at the clinic, Motsoaledi said: “The health service in South Africa does not need this service at all. In fact, I don’t think I’ll be wrong to characterise it as an ATM card through which the Guptas are withdrawing money from the department of health. Unfortunately, I can’t describe it in any other way.”

The minister said given that health services were in “dire straits” given a tight budget due to pressures on the national fiscus, the contract with the Gupta-linked company should be cancelled. “Our health facilities are congested because we have so many people to see…we don’t have any spare money to do what is being done here,” he said.

“I really ask that this service be terminated forthwith. Whoever entered into this contract must find a way to terminate it because it’s not a service that SA needs at all.”

Last month, the Hawks announced they were investigating the project, the report said.

 

The Portfolio Committee on Health has welcomed the intervention instituted by Mahumapelo, to conduct a forensic investigation in the North West Department of Health to deal with allegations raised by members. And, says an OFM report, chair of the committee Lindelwa Dunjwa said: “The committee is of the view that the walkabout conducted by the Health Minister Aaron Motsoaledi, in the North West, to inspect the mobile clinic was a necessary intervention.” He added: “I would like to commend the minister on the stance he has taken regarding Mediosa mobile clinics.”

Dunja said the committee also welcomed the decision to put the head of department on special leave while the investigation was ongoing. “This will ensure that as the administrator of the department he does not interfere or influence the investigation,” she added.

“Government cannot be seen to be taking a back seat when there are allegations of maladministration and a clear contravention of the Public Financial Management Act, we hope the investigation will bear fruit,” said Dunjwa.

The committee restated the view that private mobile clinics and emergency medical services are unnecessary for the department as this is a service and competency that government can provide.

Dunjwa said, “I am shocked and disappointed by the reaction of the premier towards the minister’s visit in the North West.”

The committee will invite the North West and the Free State Department of Health to appear before it to account about the issues in the public domain.

 

Dunjwa is quoted in a News24 report as saying it was outrageous that a government department used private ambulances for emergency medical services (EMS) that should be provided by the state.

“It cannot be right that we have private companies performing duties that are a key competency of government. The use of private ambulances is costly and it is negatively impacting on the provincial department’s budget. Outsourcing of services such as EMS further impacts on employment opportunities for people who could be directly employed by the state.”

The FF Plus in the Free State said it sent questions to the province’s Health MEC, Butana Komphela, relating to a contract with Mediosa. “The Guptas’ poison reaches beyond the Vrede dairy project and the provincial department of agriculture and the Freedom Front Plus is committed to weeding out the Gupta plague in the Free State,” said FF Plus member of the provincial legislature Tammy Wessels.

 

The South African National Civic Organisation (Sanco) has called for the arrest of Lekalakala for alleged corruption, and for Mahumapelo’s role in the matter to be investigated. “This follows Lekalakala’s confession to the provincial legislature standing committee on public accounts (Scopa) that he had, together with his wife and a couple that are his family friends, undertaken an all-expenses paid trip to India sponsored by the Gupta-linked company Mediosa,” Sanco national spokesperson Jabu Mahlangu is quoted in an eNCA report as saying.

“The role of the premier Supra Mahumapelo in the saga and his relationship with the Guptas must also be thoroughly probed, because he is seemingly misusing public office to defend their interests as he has done in the case of the controversial Waterkloof military base landing and numerous other occasions on different media platforms,” Mahlangu said.

He commended members of the provincial legislature for demanding accountability, and Health Minister Aaron Motsoaledi for undertaking a fact-finding visit to the province to appraise himself of the mobile clinic services rendered by Mediosa.

“The minister must not be intimidated by Mahumapelo’s confrontational stance which raises questions as to his motive for directing how the investigation should unfold and who should be involved. He owes it to our communities in whose name the services were procured and to South African taxpayers to act without fear or favour,” Mahlangu said in the report. He called on national government to place the North West health department under administration and to investigate whether the Free State health department had used the same modus operandi to award a similar contract to Mediosa.

“If open bids were not followed and millions advanced to the company, as was the case in the North West province, then those who were involved must similarly face the wrath of the law for violating the Public Finance Management Act (PFMA) and National Treasury regulations,” Mahlangu said.

Advance payments of millions to service providers should be investigated across all spheres of government as part of the state capture investigation. “It amounts to nothing but looting of state resources we have come to know was carried out with impunity at state-owned enterprises like Eskom,” he said.

 

Mediosa’s owners have left South Africa leaving behind more than 100 employees unpaid, reports City Press. The company, which – according to the North West Health Department – was paid R30m in May last year before it started doing any actual work, is now citing “financial crunch” as an explanation to the delay in salary payments.

The report says Mediosa employees in the Free State and in the North West, including officials in the latter province, have confirmed that no salaries were paid to the contracted workers. There are about 60 workers in the Free State and around the same number in the North West.

According to the report, a letter signed by Mediosa co-owner, Sundeep Kalsi, pleads with employees to bear with them while they try to sort out their payments. “We are facing a financial crunch as the provincial government owes the company for the services provided since November 2017 and we have received a communication from (the) department for the payment to be made in April 2018,” Kalsi wrote. The report says the North West Health Department recently wrote to service providers crying the same and informed them that their payments would be made once the new budget had been loaded, that was after April 1 when the 2018/19 financial year kicked in.

Mediosa also blamed the media for its financial woes, the report says. “Due to the current media outburst, we are unable to get (a) loan locally hence we have transferred funds from India which will reach South Africa by 6 March. Therefore, the salary will not go out today (28 February) as anticipated. All salaries will go out on 7 March,” the letter said.

The report says Mediosa’s offices, situated in the plush Melrose Arch, were contacted but a man on the other side explained that both Kalsi and Merchant were out of South Africa. The man who would not identify himself said employees’ salaries would be paid soon. It said it could also not immediately verify with Free State and North West provinces if indeed they owed Mediosa any money.

 

Companies and Intellectual Property Commission (CIPC) records show Mediosa Health is managed by Indian nationals Kalsi and Merchant. And, News24 reports, the Gupta Leaks emails show a clear relationship between the Guptas, Mediosa and its directors.

The report says the first semblance of what would become Mediosa is contained in an email from Sunil Sachdeva, sent on 9 May, 2015 to Tony Gupta. Attached to the mail is a PDF titled “Doctors on Wheels” which details plans for a “mobile medical unit” closely resembling Mediosa’s operations. Anita Roy was the author of the document. Roy followed this up with a document titled “MOU-Free State” on 2 June, 2015.

The report says curiously though, the draft agreement was between an Indian company called Cureva Pvt Ltd, and the Free State Department of Health. The MOU (memorandum of understanding) contained a clause stating “(Cureva India) requests the State to use its domain expertise in legal and regulatory subjects to facilitate the sourcing of the equipment from outside of South Africa and more particularly from India.

“(Cureva) also requests the State to streamline the process of manpower entry into the State from India and elsewhere for the duration of the mobile facility, subject to the accreditation and registration of the manpower in India by appropriate authority, and provided that such an entry shall be specific to the contract/agreement with the State.”

The report says Cureva India was literally asking the Free State provincial government to pay it to procure goods, services and employees from India. In July 2015, the Guptas purchased a shelf company called Dinovert (Pty) Ltd. Roy and Sunil Kumar were initially appointed as the directors of Dinovert. Dinovert changed its name to Cureva (Pty) Ltd, and eventually to Mediosa Health (Pty) Ltd in late 2017. Roy was so inspired by her role in Mediosa that she penned a blog post on LinkedIn about her experience.

The report says over time, the directorship of Dinovert changed. Notably though, former minister of mineral resources Mosebenzi Zwane’s special advisor Kubentheran Moodley was appointed as a director from 25 August, 2015 until 12 June, 2017. Both Zwane and Moodley have links to the Guptas through the Optimum Coal Mine, the report says. At present, Merchant and Kalsi are the directors of Mediosa Health.

In early February, Merchant is quoted as saying that “there is no connection at all” between himself, Mediosa and the Gupta family. But, the report says, the Gupta Leaks contradicts this claim. On 15 June, 2015, Ashu Chawla was requested to provide a visa invitation letter for Merchant’s visit to South Africa. Chawla cleared this with Tony Gupta, and on 17 June, 2015 a letter was sent to the South African High Commission in New Delhi. Sporting a Sahara Computers logo, it requested the High Commission to issue a business visa for Merchant. A similar letter dated 4rd (sic) February 2016 is also contained in the Gupta Leaks emails. Both letters indicated that Merchant would be staying in Saxonwold Drive for the duration of his stay.

Indian company Dinovert’s sole shareholder was a company called SAS Global Services Ltd, a Dubai-based company. But, the report says, in a previous investigation, it was unable to find any physical presence of the company in Dubai. Staff at the 39-story office block listed as its address had never heard of SAS Global.

But Indian company records show Kalsi is a director of several companies, including SAS Infrabuild, SAS Servizio, SAS Infotech and SAS Heights. In the majority of these companies, Sachdeva, the Cureva India director, is Kalsi’s co-director. Company records also show that Cureva India’s contact email is “sas@sasgroup.in”.

The report says a company called Ramsons Projects ties all of this together. Sachdeva and Kalsi are two of the directors of the company. Ramsons’ 2016/2017 Annual Report listed Roy is a director of the firm, and between Sachdeva’s and his companies, he controls 45% of the shareholding. Ramsons’ business address is the same as the one used to register the sasgroup.in domain name, used in Cureva India’s email contact, the report says.

 

The Free State Health Department, meanwhile, admits paying R10m to the Gupta-linked Mediosa company for the provision of mobile clinics, but denies any wrong-doing in the process, Volksblad reports. Departmental spokesperson Mondli Mvambi says every letter of procurement legislation was followed. The R10m was paid for expenses incurred by Mediosa in preparation for the tender process and will be deducted from fees payable, he said.

Mvambi says the Free State department rejects comparisons to the Mediosa scandal in neighbouring North West where an investigation was started about a R30m upfront payment to the company. Mediosa is supposed to deliver mobile primary care services to rural regions in the Free State and not emergency services as is apparently the case in North West, notes the report.

News24 report
Polity report
OFM report
News24 report
eNCA report
City Press report
News24 report
Volksblad report


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