Government officials, from high ranking managers to junior officials, all acted together to fleece a staggering R2bn from the Tembisa Hospital in a web of corruption involving nine syndicates, money laundering, fronting and racketeering.
Detailing the vast scale of corruption at the hospital, the Special Investigations Unit (SIU) this week revealed how corrupt Gauteng Department of Health officials had been rewarded with bribes of R122m for their complicity in the theft and looting for more than R2bn at Tembisa.
The staggering level of corruption has drawn sharp reaction from the Health Minister Aaron Motsoaledi who has called for harsh action against implicated government officials.
“Could there be a ruling that once you are called (for corruption), you must never work for the public again? We keep recycling them. They get charged, get parole, and continue stealing,” Motsoaledi said.
Speaking on Monday at the SIU briefing on progress in its probe into corruption and maladministration at Tembisa Hospital, he said: “When things like this happen, you start appreciating why the Chinese execute people to remove them from society.”
Motsoaledi warned against dismissing the role of “junior officials” involved in the crimes.
“These syndicates could not have achieved what they did without the co-operation of government officials. They may be junior but without them nothing would have happened,” he said.
Motsoaledi said South Africa had become a country where honest public servants live in fear while “scavengers” flaunt their wealth, and called for whistle-blowers to be honoured with national orders for their bravery.
“They deserve the freedom of South Africa, not the thugs who are stealing from the sick and the poor,” he said.
But, as a BusinessLIVE editorial notes, the findings completely side-step the Gauteng Health Department’s culpability. "It is simply not plausible that top officials were unaware that something had gone terribly awry at the hospital and that it was being bled dry over a sustained period."
"At the very least, the department’s internal controls should have red-flagged the hospital’s astonishing surge in expenditure on medical supplies, which rose from R315m in 2018/19 to R598m in 2019/20 and to more than R800m the following year.
"While the increase coincided with the Covid-19 pandemic – when facilities might reasonably be expected to spend more on supplies – no other hospital in the province saw expenditure jump on such a scale. Syndicate activity only slowed after the Gauteng Premier’s office released a report on its own preliminary investigation into the hospital in December 2022."
It also beggars belief, says the editorial, that no one in authority was aware of the complete lack of due diligence on suppliers or the patently absurd prices they were charging.
"If the collective betrayal of patients by criminals and corrupt officials intent on feathering their own nests is ever to stop, the Gauteng Health Department’s top leadership must be held to account and heads must roll."
According to the interim report, corrupt Gauteng Department of Health officials had been rewarded with bribes of R122m for their complicity in the theft and looting for more than R2bn at Tembisa Hospital, reports News24.
The report showed that nine syndicates relentlessly plundered the hospital, thanks to the willing collaboration of department officials in stealing an enormous sum of money intended to provide healthcare to public hospital patients.
These were the networks first flagged by Babita Deokaran 19 days before she was killed and then exposed by News24 in the investigative series titled Silenced, which delved into the structure of tender webs and how their money was spent, starting in July 2022.
“This money intended for the provision of healthcare at Tembisa Hospital was instead ruthlessly siphoned off through a complex web of fraud and money laundering,” Mothibi said.
The SIU had examined money flows from more than 200 companies involved in the syndicate’s activities and was able to identify 15 former and current department employees involved in money laundering, corruption, collusion and bid-rigging.
“These syndicates, even with their infinite wisdom, thuggery, couldn’t have achieved what they did without government officials. It would not have happened without them,” said Motsoaledi.
The wealthy few
“Three main syndicates operated at Tembisa Hospital during the period under review, linked to activities of money laundering, fronting, collusion, fraud, corruption and racketeering; and made use of conduit companies and accounts for the benefit of singular persons or families,” the report read.
Chief among the syndicate dons was Hangwani Morgan Maumela, a distant relative by marriage to President Cyril Ramaphosa, who steered a fleet of companies that raked in R816m through 1 728 individual contracts issued by the hospital.
In the SIU investigation, 924 payments analysed all bore the hallmarks of fraud.
Fellow tenderpreneur Vusimusi “Cat” Matlala, whose three companies formed part of Maumela’s syndicate, was paid around R15m. He and his family were the subject of a National Prosecuting Authority (NPA) asset freeze last month, in which assets worth R325m were restrained – a precursor to potential criminal charges.
Matlala is in court facing charges related to three separate murder attempts.
Family dynasty
Rudolf Mazibuko, via 17 companies steered by four members of his family, was paid more than R283m by Tembisa Hospital.
The hospital paid a clothing company in this network R40 000 for the purchase of four plastic buckets, which were worth less than R600.
‘Syndicate X’
A third prolific syndicate banked nearly R600m from the hospital. The head of this network was not named by Mothibi, for fear that assets would be dissipated. His identity is known to News24.
From this network, auditors found that R56m in kickbacks were paid to at least 32 bank accounts linked to Gauteng Health staff.
“The corrupted officials were responsible for identifying the need, sourcing service providers linked to syndicate X, adjudicating and recommending the appointment of these service providers, approving the appointment of the service providers, certifying compliance with regulations, issuing POs (purchase orders), confirming that goods were delivered and allowing for payments to be made to the tainted service providers. It would appear from the SIU’s financial analysis that each link in the procurement chain was tainted by corruption,” according to the report.
Six other smaller groupings similarly enabled by bent officials have also been identified.
Mothibi made it clear that the SIU would pursue the implicated officials to recover the money and would also refer them to the NPA for criminal prosecution.
“To date, the SIU has prepared 116 disciplinary referrals against 13 officials, of which 108 were delivered to the GDoH (Gauteng Department of Health) against 13 officials relating to the irregular appointment of service providers at Tembisa Hospital.
“The SIU will also refer all recommendations for disciplinary action to the national Department of Health to ensure the necessary steps are taken against them,” the report read.
Widespread maladministration
The report – the result of an extraordinary, detailed examination of 2 207 procurement bundles, unveiling widespread maladministration, procurement fraud and systemic corruption – revealed a staggering 207 service providers and a total of 4 501 POs, all intended to comply with a regulated three-quote procurement process designed to ensure fairness and transparency.
What was supposed to be a competitive and transparent procurement system was manipulated by colluding officials and unscrupulous service providers, reports Daily Maverick, and fronting practices were commonplace, where companies that did not legitimately qualify were nonetheless awarded contracts by acting as fronts for others.
The fraudulent scheme was meticulously designed to circumvent the mandated three-quote procurement system.
“The syndicates deliberately split orders into smaller amounts under R500 000, a clear tactic to avoid the thresholds that trigger competitive tendering processes,” Mothibi said.
The collusion between corrupt officials and service providers was widespread, underpinned by fabricated deliveries and forged documentation.
“We found numerous invoices and delivery notes that were outright fakes; payments were processed without any goods or services actually reaching the hospital,” Mothibi revealed, adding that none of the transactions resulted in goods being delivered to Tembisa Hospital.
“All of the money flowed through a network of front companies and beneficiaries, leaving the hospital with no value for money whatsoever. It is all smoke and mirrors.”
The investigation had traced more than R1.1m flowing from syndicate-controlled companies to losing bidders who were merely pretending to compete, undermining the entire procurement process.
Referrals, calls for systemic reform
To date, the SIU has referred 25 matters to SAHPRA concerning breaches of the Medicines and Related Substances Act. These referrals focus on contraventions in the procurement and distribution of medical supplies connected to the hospital.
Additionally, four major corruption cases involving both officials and service providers have been handed to the NPA. The corrupt payments linked to these cases total more than R42m.
Mothibi said the NPA now holds the evidence needed to pursue criminal charges against “those who facilitated the embezzlement of these public funds”.
The SIU described the staggering theft as “a devastating plunder of the public purse, representing an egregious betrayal of the nation’s trust”, reports PoliticsWeb.
Mothibi said the numbers mentioned were constantly being updated “as new companies are identified through ongoing investigations and the flow of funds involving irregularly appointed service providers at Tembisa Hospital”.
Why Tembisa?
The question of why Tembisa Hospital, of all health facilities in Gauteng, became the epicentre of the R2bn corruption scandal has loomed large since the assassination of Deokaran, reports the Sunday Times, and the SIU report has shed light on the matter: it was the hospital’s leadership who opened the floodgates.
According to Gauteng Health MEC Nomantu Nkomo-Ralehoko, corruption thrived at Tembisa Hospital because the then-CEO Dr Ashley Mthunzi was at the helm of the scheme.
Mthunzi, who died last year, was placed on precautionary suspension in August 2022 after allegations of irregular procurement and payments made to service providers.
His appointment initially raised hopes of reform. He was profiled in The Sowetan as a “Mr Fix It” intent on turning the hospital into a “healthcare provider of choice”. Yet within weeks, his name was tied to one of the country’s most audacious looting scandals.
“There has been a lingering question as to why corruption took place at Tembisa Hospital and it was because the person who led the corruption team was the CEO,” Nkomo-Ralehoko said.
The SIU’s Mothibi said Mthunzi authorised non-compliant bidders, effectively green-lighting the corruption networks.
“In any procurement process there are unsuccessful bidders, but our investigation found that even the ‘losers’ were part of the syndicates. They knew they wouldn’t win, but when they didn’t they were still paid,” Mothibi added.
Corruption was not confined to executives, however.
“It is at the lower level, particularly procurement, where the damage is caused. These are employees who have cost Tembisa Hospital significant losses,” Mothibi said, warning the same pattern had emerged in other probes, such as Home Affairs’ refugee processing system.
Nkomo-Ralehoko said the province has since implemented tighter supply chain controls. All procurement transactions between R500 000 and R1m must now undergo mandatory vetting and approval by the Gauteng Treasury.
“We have introduced quotation adjudication committees and every month all hospital CEOs and finance managers account to me on their finances in the presence of Treasury officials,” she said.
Mothibi said that, given the complexity and vastness of the networks, the final report would only be concluded in 2027.
PoliticsWeb article – Tembisa hospital: How R2bn meant for healthcare was stolen – SIU (Open access)
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