SIU freezes over R40-m worth of assets for companies irregularly appointed to sanitise schools

The Special Tribunal has granted the Special Investigative Unit (SIU) an order to freeze assets worth more than R40-million to companies that were irregularly awarded tenders by the Gauteng Department of Education to sanitise local schools.

The service providers were contracted by Gauteng Department of Education to decontaminate schools to the tune of over R431-million.
SIU spokesperson Kaizer Kganyago said the unit approached the Special Tribunal for preservation order to freeze accounts with the sum of R6-m and assets with an estimated value of over R4.7-m belonging to seven companies, five individuals and two family trusts.

The assets include two Mercedes-Benz V Class, Land Rover Range Rover Sport, Haval H6 and Toyota Avanza.

The action follows an investigation into allegations of unlawful procurement of services by the education department to decontaminate, disinfect and sanitise schools.

“The collaboration with the Financial Intelligence Centre (FIC) is effective, and the FIC assisted and based on the information presented by the investigating team issued intervention directions under Section 34 of the FIC Act to place a hold on R30-m of the funds received from the education department.
“This is after seven service providers began dissipating the funds received from the department, upon receipt. A portion of the funds were transferred to multiple beneficiaries who have, in turn, disposed of them,” explained Kganyago.

The order prohibits Fikile Mpofana Pty Ltd, Insimu Projects Pty Ltd, Insimu Consulting Pty Ltd, Insimu Medical Group, Mangaliso Pty Ltd, Lisondalo Pty Ltd, Zenaldo Consulting Pty Ltd, Sigwile Bright Mhlongo, Fikele Eugenia Mpofana, Lindokuhle Bridget Mkhize, Njabulo Mabaso, Richard Mweli, Shuphula Family Trust, and Madangu Family Trust from dealing with the funds held in the bank accounts and assets.

Kganyago stated the SIU will forthwith launch review proceedings in the Special Tribunal within the next 30 days and seek an order against the service providers to pay back all profits as a consequence of their appointment.
The SIU investigation has revealed the procurement process conducted by the Gauteng education department was manifestly unlawful. The Gauteng Department of Education paid over R431-m to service providers pursuant to a process that was haphazard, unfair and littered with procurement irregularities.

The department obtained a deviation under Treasury regulations to conduct the procurement process without inviting competitive bids. The department has done that on the basis that emergency procurement was warranted, given the urgent and pressing need to appoint service providers to decontaminate schools exposed to Covid-19.

The request for the deviation expressly stated the department would ‘appoint accredited service providers from the Central Supplier Database (CSD)’.

“However, the SIU investigation revealed the department failed to comply with the express requirement of the deviation. The vast majority of service providers that were appointed (173 out of 280) were not accredited and were not on the CSD. On this basis alone, the SIU will argue before the Special Tribunal that the procurement process was unlawful and falls to be reviewed and set aside,” stated Kganyago.

Furthermore, the unit investigation revealed the procurement process was not cost-effective. The service providers were not paid per square metre of the area cleaned.
Rather, a senior official in the department appears to have arbitrarily decided to offer a fee of R250 000 to R270 000 for the decontamination of primary schools, R250 000 to R290 000 for secondary schools and R250 000 to R300 000 for district offices.

“The fees bear no relation to the work done by service providers or the cost of material used. The selection and appointment of suppliers was done in a haphazard, unfair and inequitable manner.
“Ordinarily, the Supply Chain Management division of the department would select and appoint suppliers. In this case, the SIU investigation has revealed the SCM division was not involved in the selection and appointment of service providers.”

Some of the names of service providers appointed were received via WhatsApp from officials in the department. The service providers were appointed without first checking whether they were accredited or appeared on the CSD, the SIU investigation has revealed.

“Though there are legal outcomes, the SIU investigations into the affairs of the education department are continuing. Evidence pointing to criminal conduct will be referred to the National Prosecuting Authority, as well as the Hawks in the SAPS for further action.”

Fraud and corruption allegations may be reported via siu@whistleblowing.co.za and 0800 037 774.

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