A Special Investigations Unit (SIU) partial audit of the billions of rands the government spent fighting Covid-19, has implicated two Durban doctors and their web of medical companies, including two private hospitals.
The Sunday Times reports that the SIU last week released a report on corruption in the past financial year, based on a probe into contracts worth only about R14bn, or 10% of total government spending on Covid-19, suggesting, notes the Sunday Times, that the rot may run much deeper.
Central to the scandal, writes the Sunday Times, is Durban businessman and HIV/AIDS researcher Dr Sigwile Bright Mhlongo, whose four companies were paid the lion's share of the R63.5m. They received R41.6m in total. Mhlongo's companies that secured contracts are Insimu Projects, which was awarded a R13.9m contract; Insimu Consulting (R11.5m); Mangaliso Projects (R11.6m); and Insimu Medical Group (R4.6m). His businesses are part of the Durban-based Insimu Foundation.
Also scoring from the deal were Insimu Foundation co-directors Fikile Mpofana and Dr Njabulo Mabaso. The Insimu Foundation owns Umlazi Private Hospital, Roodepoort Urogynae Hospital, a paramedic company, an agricultural foundation, medical equipment and linen manufacturing companies and Men's Sexual Health Clinics SA.
Mabaso is a co-director of Insimu Projects and Insimu Medical Group, and he and Mpofana share a residential address in Dainfern, according to company searches, writes the Sunday Times. Mpofana's companies, Fikile Mpofana and Lisondalo, which was registered in 2020, scored contracts worth R11.6m and R3.9m respectively.
Another of their associates, Lindokuhle Mkhize, landed a R6.7m contract through her company Zendalo, R2.3m of which she immediately transferred to Mhlongo, according to the SIU. These are the first companies linked to the scandal to have their assets frozen.
They are among 280 businesses that were allegedly irregularly awarded cleaning contracts during June and August last year by senior Gauteng Education Department officials, in what the SIU says was a ‘haphazard’ and ‘manifestly unlawful’ manner. It claims contracts were approved via WhatsApp and telephone calls. SIU project manager John Neave says in an affidavit the investigation, which is still in progress, ‘revealed the procurement process was manifestly flawed and patently unlawful’.
The SIU documents show that on October 22 and 23 last year, 30-year-old Mpofana spent R399,000 on Baume & Mercier watches at RLG Africa jewellers; R190,800 on jewellery at Arthur Kaplan; and R4m for a Liberty Life investment policy. She also made a R2.8m deposit into her personal bank account.
The following month she went on another splurge, paying off a R750,000 home loan for her Dainfern View townhouse and paying R143,000 to Johannesburg plastic surgeon Dr Deon Weyers. She made a R1.7m payment to EB Motors Klerksdorp for a Mercedes-Benz V-Class van, which is registered in the name of the Shuphula Trust.
The bank balance of Mhlongo 's Mangaliso Projects, which was registered as a company in 2019, was R1,080.13 before the GDE paid it R11.6m.
Mhlongo's spending, according to the affidavits, included:
R2.4m to Liberty Group for the reinstatement of investment policies;
A R2.5m payment into a Liberty Group policy;
R500,000 to the Madangu Family Trust;
A R3.5m payment into an Investec Wealth and Investment account;
R775,037 for a Range Rover Sport from a dealership in Hillcrest, KwaZulu-Natal.
Contacted by the Sunday Times, Mpofana, Mabaso, Mhlongo and Mkhize referred questions to their lawyer, Buthelezi, who said his clients were registered government suppliers."The deviation [from standard tender procedures] order was properly done. The SIU says there was a problem with the CSD [central supplier database]. All of my clients are on the CSD, which we can prove."
He said payments could only be made by government entities if there were no issues with the CSD.
"Our clients were paid for the work which they did. Each school signed off on the work done and submitted these to the department. That is how my clients were paid."
Buthelezi said his clients had worked for the health department before.
"We will defend against the SIU's attempt to have the tenders set aside because my clients fully complied with the tenders' conditions."
Cape Argus reports that the SIU has finalised its investigation into 34 contracts valued at R184m in the Western Cape for the procurement of PPE. In its investigations into the provincial Education Department, where the SIU probed an allegation relating to the allocation of tenders awarded to a service provider to the value of R54.5m, it was found that the supply chain management process did not comply with the Constitution.
The State Attorney has been requested to brief counsel to review and set aside the contract. Investigations into allegations against the Department of Transport & Public Works as well as local municipalities in Laingsburg, Mossel Bay, Hessequa, Saldanha and Langeberg found no irregularities. However, the Matzikama Municipality, run by the ANC, was made to set aside a contract worth more than R650,000 after the bidding process was found to have been manipulated and information leaked to a service provider.
Full Sunday Times report (Restricted access)