2020 Headlines: Corruption in procurement of PPE

Corruption in the procurement of COVID-19 Personal Protective Equipment (PPE) made headlines this year. The Special Investigating Unit (SIU) is probing about 650 companies countrywide for PPE contracts worth more than R7.5 billion.

There are also probes underway into excessive pricing of goods required in the fight against the coronavirus pandemic. One of the cases investigated by the SIU is the R125 million PPE contract awarded to a company linked to Thandisizwe Diko, the husband of Khusela Diko – the President’s spokesperson.

The Dikos are friends with former Gauteng Health MEC Dr. Bandile Masuku who has since been fired following preliminary findings by the SIU into PPE corruption.

Following the media’s exposure of corruption relating to the procurement of PPE, President Cyril Ramaphosa signed a proclamation ordering the SIU to probe this.

Ledla Structural Development tender 

The estimated R125 million PPE contract awarded to Ledla Structural Development caused a political storm after it emerged that Ledla was a front for Royal Bhaca projects owned by Thandisizwe Diko, a close friend of the then Gauteng Health MEC, Dr. Bandile Masuku.

Diko’s wife and presidency spokesperson, Khusela Diko, had been forced into taking a leave of absence from her job. Gauteng Premier, David Makhura, was livid and told a virtual meeting of the Gauteng Legislature that PPE corruption is undermining the government’s efforts to deal with corruption.

“This does not seem like something that just happened. It seems like it was a proper plan, designed to ensure that rules are not followed.  And as quickly as possible, people make a quick buck. We want the money recovered. These people must go to jail.”

In November, he fired Masuku, based on the preliminary findings of the SIU investigation.

“The SIU has found that the Health MEC Dr. Bandile Masuku has failed to execute his functions in compliance with the Constitution and the Public Finance Management Act. I have decided, as premier of the province, to discharge Dr. Bandile Masuku from his responsibility as MEC for health.”

Gauteng Health MEC Bandile Masuku fired:

Masuku’s application to review his expulsion will be heard in the High Court in Pretoria early next year, according to his lawyer, Mojalefa Motalane.

“We welcome the allocation of the full bench by the court which in fact signifies the importance of this matter and our belief that finally, the courts will provide a fair adjudication to vindicate our client’s position. The matter will be heard on the 21st of January 2021.”

The controversial PPE tender awarded to Ledla Structural Development has since been cancelled by the Special Tribunal of South Africa. The SIU had requested that R38 million already paid to the company and then distributed to six other entities be frozen.

The Tribunal also upheld the application to freeze the pension payout of former Health Department Chief Financial Officer, Mantsu Lehloenya.

In addition, the SIU has been ordered to conduct a forensic investigation into 24 other companies implicated in the Gauteng PPE scandal.

“Payments were made between 3-5 of August. So, that money was immediately after the applicants realised there were allegations of impropriety interdicted … so, the money has been preserved,” says tribunal spokesperson Selby Makgotho.

More companies investigated 

SIU spokesperson, Kaizer Kganyago, told SABC News in September that they had many more companies on their radar.

“In Gauteng, it is only one contract that is getting a lot of attention. That is the one for Royal Bhaca. But we are in Gauteng alone, investigating almost 160 companies. Therefore, this is just one of the 160 companies that we are dealing with.”

Over 650 companies across the country are being probed by the SIU for COVID-19 PPE contracts worth more than R7.5 billion. This includes the failed controversial Eastern Cape medical scooter project, which had been hailed as the answer to people being pushed to hospitals on wheelbarrows.

Eastern Cape Health Department Head Dr. Thobile Mbengashe speaks about the project: 

Price gouging

In July, the Competition Tribunal found Dischem Pharmacies guilty of price gouging and fined it R1.2 million for selling surgical face masks at excessive prices.

Divisional Manager of Cartels at the Competition Commission, Makgale Mohlala, indicated they were investigating many more of these cases.

“Complaints that we have received from the South African Police Services are about 54 cases or instances of excessive pricing. So, there is a lot of information we are getting from the National Treasury. There is also a report we are studying from the Auditor-General which also alleges there was excessive pricing. So, we want to study that report and see if there were cases of excessive pricing that we can initiate and investigate.”

Corruption in the procurement of PPE has angered the public and there has been an outcry that unless those implicated end up in jail, it will undermine confidence in the state’s ability to stop wrongdoing.