The Special Investigating Unit (SIU) aims to recover R33.4m the SANDF handed over to the Cuban Government for the “immune-boosting” drug Interferon alfa-2b during the Covid-19 pandemic five years ago, most of which was never used and which had been procured irregularly.
Briefing the Standing Committee on Public Accounts this week, SIU chief operating officer Leonard Lekgetho said an allegation was made during an investigation into personal protective equipment (PPE) that the department bought 930 units of Interferon and paid R217m to Cuba.
IOL reports that the drug was apparently going to be used as an immune booster for soldiers during the pandemic.
Lekgetho said the Military Command Council (MCC) approved the purchase using the defence co-operation agreement signed between South Africa and Cuba.
“But the agreements were signed after the delivery of medicine was finalised,” he said.
The first consignment was for 130 vials, for which the department paid R33.4m, while the second and third consignments were never paid for.
“The department did not procure the drug by a bidding process, and the MCC exercised a power it did not have when it approved the procurement,” Lekgetho added.
In the Department of Defence, the Secretary of Defence is the accounting officer and all procurement needs to be signed by him.
“In this instance, the procurement was not signed by the accounting officer.”
He added that Interferon alfa-2b was not approved by the South African Health Products Regulating Authority (SAHPRA), and the department did not have funds in its budget for the drugs, most of which were returned to Cuba after a court order on application by SAHPRA, which declared them not fit for purpose.
The SIU found that only 15 vials had been used – 10 were administered on a patient at 1 Military Hospital and five others by SAHPRA for testing.
Lekgetho said the department did not get its money back from Cuba after they were returned, and that it had been a fruitless and wasteful expenditure.
He said the SIU was preparing a referral to discipline the official who caused the irregular expenditure, one to the Special Tribunal for the setting aside of the contract, and one to recover the payment made to Techno Import on behalf of Cuba.
“We are going to court to cancel that contract – worth R217m and entered into by the Department of Defence with Cuba – and to institute civil proceeding to recover the R33.4m paid for the medicine.”
Money laundering and bribes
Meanwhile, on the PPE procurement by the Department of Defence, and allegations of supply chain management processes not being followed, the SIU has identified collusion among the adjudication committee and service providers, as well as evidence of money laundering
“There were excessive prices charged . . .we can confirm some of them bought vehicles, and some received money through cash-send.”
He said the SIU has made 33 referrals to the NPA and Asset Forfeiture Unit, one disciplinary action referral and two administrative action referrals to the Competition Commission for price fixing.
IOL article – SIU seeks R33.4 million from Cuba for unused Interferon alfa-2b drug (Open access)
See more from MedicalBrief archives:
Interferon worse than placebo in severe Covid — US NIAID trial
SANDF Military Command refuses to co-operate with Public Protector on Cuban Interferon
SA Minister of Defence: Task team to investigate purchase of Interferon-B from Cuba