As the fall-out from the grand-scale corruption at Tembisa Hospital continues, another state hospital – the flagship Chief Albert Luthuli Hospital in Durban – has been caught up in a criminal syndicate, the details of which were revealed in the High Court this week.
With a modus operandi similar to that of the syndicates that fleeced billions of rands from Tembisa Hospital, the state alleges that Consulens Medical Healthcare Solutions was sub-contracted within the KwaZulu-Natal Department of Health as a supplier of equipment to, among others, Albert Luthuli Hospital.
It was claimed Consulens’ employees would manipulate the company’s systems to create a fictional need for the supply of items, so as to replenish stock.
These details emerged in the case of Oleena Dauchand, sole director of a company allegedly part of the syndicate, who was found guilty of dozens of fraud cases at the Albert Luthuli Hospital – and who has asked the courts to place her sentencing procedures on hold.
IOL reports that Dauchand, the only member of Trestine Trading CC, asked the KZN High Court (Durban) this week to interdict the prosecuting authority from going ahead with its sentencing next month.
Dauchand, hot on the heels of her conviction and a recommendation in a pre-sentencing report that she should spend time behind bars, claimed she had actually meant to plead not guilty to the charges, and blamed her legal team for making her enter a guilty plea instead.
However, the magistrate in her case did not want to accept her change of plea after her conviction.
Dauchand has instituted proceedings to overturn this, but argued that it would be too late to prevent harm if the sentencing overtakes the review proceedings, as she might already be in prison.
The applicants (Dauchand and her company) were originally charged with several other people accused of being part of a syndicate acting with common purpose to defraud. The claims were investigated and various people arrested after a tip-off.
Meanwhile, although various members of the alleged syndicate were able to negotiate plea bargain agreements with the prosecution, Dauchand’s efforts to arrange a similar agreement failed.
While the others have since been sentenced in terms of that agreement, her and her company’s trial was separated from the others.
They faced 59 counts of fraud, 59 counts of corruption and one count of money laundering. The charges stem from 59 transactions spanning a period of two and a half years – from January 2015 to August 2017.
The prosecution alleges that Consulens Medical Healthcare Solutions was sub-contracted within the KZN Department of Health as a supplier of equipment to, among others, Inkosi Albert Luthuli Hospital.
It was claimed Consulens’ employees would manipulate the company’s systems to create a fictional need for the supply of items, so as to replenish stock.
Trestine Trading would then issue invoices for such items to Consulens.
The state’s case is that not only was there no actual need for these items, but nothing was delivered. Through collusion with representatives of Consulens, Trestine’s invoices were nevertheless paid by Consulens.
The unlawful proceeds were then allegedly shared between the applicants and Rakesh Maharaj, the former logistics manager at Consulens. He earlier pleaded guilty to money laundering and fraud to the tune of R5.7m and sentenced to eight years’ imprisonment.
Meanwhile, in April, Dauchand and her company issued a 15-page plea of guilty explanation to the court. The magistrate subsequently convicted them and the matter was postponed to allow for the preparation of pre-sentencing reports.
But three months later, Dauchand had a change of heart and wanted to change their pleas to not guilty. Although she and the company were represented by a legal team, she now claimed she acted on bad legal advice.
She said she was not in any emotional condition to tender any plea, as her mother was on her deathbed at the time. The prosecution, in turn, argued that the only reason for the applicants’ about-turn was that a prison sentence was recommended.
The High Court, however, suspended the sentencing procedures pending the outcome of her review application.
The case comes as Acting Police Minister Firoz Cachalia that Tembisa Hospital may not be the only institution mired in major corruption allegations. His comments were supported by the Public Servants Association of South Africa (PSA), which has called for urgent, comprehensive investigations into corruption across all public hospitals and government institutions, and with the National Education, Health and Allied Workers’ Union (Nehawu) echoing the plea.
PSA spokesperson Madimetja Mautla said the union shares Cachalia’s concerns that the rot may be far more widespread than initially believed and that the problem is not restricted to Tembisa, reports IOL.
“Books and supply chains of these hospitals should all be checked so that we can eliminate this corruption,” Mautla said.
Speaking at a Kgalema Motlanthe Foundation event on the weekend, Cachalia had said: “We are all rightly outraged by the brazen shamelessness and cruelty of the grand larceny at Tembisa. And I’m sure it’s not the only hospital with this problem.”
He said that other institutions may be implicated – not only hospitals but other government institutions as well, and suggested that even the Government Employees Pension Fund should be investigated.
“There have been complaints from staff there that they are forced to process multi-million-rand tenders without following proper procedures,” he pointed out. “So, corruption is widespread: Tembisa Hospital does not have a monopoly on it.”
He accused the government of failing to act on corruption, despite repeated public pledges to do so.
“They are all talk, no action. We want to see decisiveness … against anyone who is accused of malfeasance or corruption. We want them in jail where they belong – because all this money that they are taking from the state is affecting South Africa’s poorest.”
He said it was part of a systemic national crisis. “This represents a threat to our national security. This is not ordinary crime,” he added.
Nehawu Gauteng provincial secretary Mzikayise Tshontshi told IOL that the provincial Health Department needed to act urgently.
“All of those responsible must face the might of the law. What happened in Tembisa is just the tip of an iceberg – a thorough going investigation is critical, into all contracts awarded by the department.”
The DA in Gauteng, meanwhile, has laid a slew of criminal charges against Lerato Madyo, Gauteng Health’s former chief financial officer (CFO), citing her failure to act on slain whistle-blower Babita Deokaran’s report on possible fraudulent transactions at Tembisa Hospital.
Newsday reports that Madyo was a central figure in the R2bn corruption scandal, and that she had misled Deokaran about initiating a full forensic investigation into suspicious transactions of R850m.
Instead, a limited internal audit was conducted, which was quickly halted, buried for more than a year, and its recommendations ignored, said Gauteng shadow MEC for health, Dr Jack Bloom.
“The Gauteng Health Department dragged out her disciplinary inquiry on 13 misconduct charges for two years,” said Bloom.
“Scandalously, they allowed her to resign shortly before a finding was to be made, so she walked off with her pension and R3m paid to her while she was suspended.”
He said that Madyo is “a chief suspect among the small number of those who could have tipped off the mastermind behind Babita’s murder”.
Madyo, who now goes under the name Daniella Molapo, has been charged by the DA with multiple alleged offences, including:
- Violating Sections 34 and 21 of PRECCA for failing to report corruption or conspiring to commit an offence;
- Contravening Section 18 of the Criminal Procedure Act for attempting or conspiring to commit fraud;
- Breaching the PFMA, including:
o Section 38: failing to report unauthorised or wasteful expenditure and maintain effective financial controls;
o Section 51: negligence in ensuring fair and transparent procurement;
o Section 45: failing to uphold financial management, leading to wasteful or irregular expenditure;
o Section 81: financial misconduct by wilfully or negligently neglecting assigned duties.
Newsday – Charges laid against former Gauteng Health CFO
IOL – Court halts sentencing of director in multi-million fraud case linked to Durban's Albert Luthuli Hospital
See more from MedicalBrief archives:
Gauteng Health boss first casualty in Tembisa fraud crackdown
Unions demand lifestyle audits for all Tembisa staff