Tuesday, 25 June, 2024
HomeNews UpdateTembisa Hospital pays footballer and wife R500,000 for skinny jeans contract

Tembisa Hospital pays footballer and wife R500,000 for skinny jeans contract

Tuesday marked the one-year anniversary of the killing of whistle-blower Babita Deokaran, whose discovery of massive fraud and corruption at Tembisa Hospital led to her assassination – and whose findings have yet to be investigated, reports News24.

Just before the third wave of COVID-19 strained medical facilities in South Africa to breaking point, and in the midst of the pandemic, Tembisa Hospital bosses coughed up R500,000 on a shipment of skinny jeans. The payment for 200 pairs at R2,500 each – for girls aged six to seven – was only one of those flagged by Deokaran alongside thousands of others worth more than R850m before her murder three weeks later.

The jeans contract was awarded to a company named Inez Chaste, one of 10 separate business entities controlled by retired professional footballer, former Jomo Cosmos and Bidvest Wits defender Themba Shabalala, and his wife Evelyn.

The couple established a medical supply empire with a network of 45 shell corporations, controlled by nine people, which raked in more than R110m in contracts from the hospital in two months. The firms in the Shabalala stable scored R15m.

None of the companies has offices or warehouse space and exist only on paper, illegally selling medical equipment, in some instances at hugely inflated prices.

Deokaran’s report on “possibly fraudulent” Tembisa deals, where she called for a forensic investigation and halt to payments, was buried by Gauteng Health Department bosses after she was murdered.

Now companies owned by the Shabalalas – with others in the letterbox network – face a probe by the health products regulator that could result in criminal charges, while Special Investigating Unit (SIU) boss Andy Mothibi said they were “considering the allegations to investigate them”.

It takes two to tender

On 24 June 2021, the supply chain management office at Tembisa Hospital processed a payment of R498 000 to Inez Chaste, formed just a month earlier. “Jeans girl skinny 6-7 years” was entered into the ledger for delivery of 200 pairs to the hospital, according to documents obtained by News24.

Companies and Intellectual Property Commission (CIPC) data indicate that Inez Chaste operates from premises in Brakpan. But News24 found the building was occupied by a creche, opened several years earlier.

The company and four others were founded on the same day, with Evelyn Shabalala appointed sole director. Within a month, they raked in 18 contracts for the supply of medical equipment to the hospital. She was previously employed as a credit underwriter at a Sandton financial services company.

In her initial report, Deokaran identified R9.92m to be paid to Evelyn Shabalala: despite no experience in the medical industry, her companies supplied medical-grade staplers for use in the theatre, wound dressings and needles.

On the eve of his retirement from professional soccer, Shabalala founded his clutch of five companies on the same day as those founded by his wife.

Contracts worth nearly R5m bound for his companies were identified by Deokaran, and  five deals valued at R2.47m in total were processed by Tembisa Hospital in one day. The entities had been in existence for just five weeks.

News24 visited 10 business addresses of the couple’s firms and not one could be located. Repeated attempts to contact them through telephone calls, Whatsapp messages and emails were unsuccessful.

Their windfall coincides with the appointment of Dr Ashley Mthunzi as Tembisa CEO, a central figure in what was Deokaran’s final graft investigation.

During the early days of his tenure, companies in the letterbox network saw a flurry of work pushed their way. Deokaran picked up that hospital expenditure had soared, and this was driven by a raft of contracts – suspiciously valued at between R400 000 and R499 000: a total of 1 203 purchase orders in this range were processed by the hospital in four months.

The value of the contracts is key, as they fall within Mthunzi’s delegation of authority, and are below the threshold which requires a more rigorous procurement process.

Deokaran discovered the first indicators of a massive extraction scheme. Clusters of five companies were formed within minutes of one another and were largely dormant until Tembisa Hospital went shopping.

Everything from ventilators to luxury leather sofas was out for delivery, and the unknown firms submitted dozens of invoices, billing the hospital simultaneously.

In response to earlier questions, the Department of Health said that Mthunzi was appointed to act in the post on 28 April 2021 and then permanently installed on 1 June.

News24 has identified 214 payments to the web of shell corporations that were processed after his appointment.

Last week, Mthunzi called on powerful players in the ANC to broker a meeting with this publication, as pressure and calls for his suspension mount.

The web

The way the front companies were established and key patterns in how they billed Tembisa Hospital suggests an element of co-ordination.

Email addresses used to receive purchase orders and issue invoices are set up in a stencilled pattern. The 217 companies identified by Deokaran and payments to them were never fully scrutinised. Instead, a randomised compliance audit was undertaken examining the procurement processes of hospitals and clinics across Gauteng.

Only 12 firms from Deokaran's report were part of the audit. The Gauteng Health Department has refused to provide detail on the findings of their surface-level probe.

No comment

After the publication of the first story in this series, the Gauteng Department of Health closed ranks. Neither Mthunzi nor the department responded to questions and requests for comment this week.

Under investigation

Last week, the South African Health Products Regulatory Authority (SAHRPA) announced a team would investigate Tembisa’s procurement.

“The process will involve fact-finding and inspections where applicable. Furthermore, engagements with Tembisa Hospital have been initiated.”

The sale or distribution of medical devices is strictly controlled and requires a licence from SAHPRA, and falling foul of this could result in a criminal conviction and a prison term. None of the 45 letterbox companies ever applied for a licence. Of the 23 contracts scored by the Shabalalas, 21 were illegal, SAHPRA said.

Gauteng Premier David Makhura has since said his office was appointing an independent forensic investigator to finish what Deokaran started. He would not comment on who would be appointed and said the process would probably be finalised next week.

SIU boss Andy Mothibi insisted that his Gauteng investigators were closely following developments.

Meanwhile, the case against the six men accused of killing her was postponed on Wednesday (24 August) in the Johannesburg High Court, reports TimesLIVE.

They have been accused of murder, attempted murder, conspiracy to commit murder and possession of unlicensed firearms and ammunition, and will remain in custody until their case is heard on 6 October.

They were arrested on 26 August last year.

“We are not able to reach an agreement with family and friends of the accused. We need more time,” said the prosecutors. “We also need to engage counsel on the evidence and outstanding material, some of which we received a few weeks ago. Some forensic report/s is still outstanding.”

 

News24 article – SILENCED | Tembisa Hospital’s R500 000 skinny jean spending spree… and the soccer star who scored (Open access)

 

TimesLIVE article – Babita Deokaran murder trial postponed, accused remain in custody (Open access)
See more from MedicalBrief archives:

 

Uncovering the 200 suspicious Tembisa Hospital contracts flagged by Deokaran

 

Deafening silence on Tembisa Hospital payments scandal – Jack Bloom

 

Sanco alleges multimillion rand tender fraud at Tembisa Hospital

 

 

 

MedicalBrief — our free weekly e-newsletter

We'd appreciate as much information as possible, however only an email address is required.