Digital Vibes’ R22m bank account frozen due to irregular health payments

The Special Investigating Unit (SIU) announced on Wednesday it had been granted a preservation order to freeze R22 million in a bank account linked to Digital Vibes.

SIU spokesperson Kaizer Kganyago on Wednesday said on 17 June the Special Tribunal granted the order to freeze all accounts, including banking and investment accounts, linked to Digital Vibes and individuals connected to the company.

“Based on the information presented by the SIU investigating team and certain information sourced and assisted by the Financial Intelligence Centre (FIC), between 4 and 14 June 2021, after being approached by the SIU with evidence, the FIC issued intervention directions under Section 34 of the FIC Act to place a hold on approximately R22 million of funds derived from the monies paid to Digital Vibes by the department for a period of 10 working days,” Kganyago said in a statement.

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He said the SIU would launch review proceedings in the Special Tribunal within the next 30 working days.

The unit will also seek an order against Digital Vibes and other relevant entities and individuals to pay back all financial losses suffered by the state.

Investigation

Earlier this month, President Cyril Ramaphosa placed Health Minister Zweli Mkhize on special leave after being implicated in awarding the R150 million contract by the department of health to Digital Vibes, a company owned by his close associates.

The company was initially contracted to handle the department’s National Health Insurance (NHI) communication work, but its scope was later expanded to include work on the department’s Covid-19 campaigns.

Kganyago said their preliminary investigations revealed two highly irregular and unlawful transactions connected to Digital Vibes’ contracts with the health ministry.

The first transaction is the procurement process in 2019 in terms of the NHI contract and the second transaction related to the company’s work on Covid-19 campaigns.

“The second transaction occurred in 2020 during the tenure of the first transaction when Digital Vibes was ‘appointed’ in respect of a Covid-19 awareness campaign without any competitive bidding or other procurement processes at all.

“The Covid-19 awareness campaign was merely brought in as an extension to the contract between the department and Digital Vibes in respect of the NHI media campaign, in circumstances where such an extension was irregular and unlawful.”

The department also utilised the budget allocated for the NHI contract and NHI media campaign to pay for the purported Covid-19 media campaign work by Digital Vibes.

“The department paid a total of approximately R150 million to Digital Vibes, approximately R25 million of which was paid in respect of the NHI media campaign and approximately R125 million in respect of the Covid-19 appointment,” Kganyago said.

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Mkhize had conceded that the department’s investigation found the tender bidding process followed was in contravention of the Public Finance Management Act.

Meanwhile, the SIU said it would be done with its investigations before the end of June.

Apart from civil legal outcomes, the SIU said once it’s done with the investigation it will refer evidence pointing to criminal conduct to the National Prosecuting Authority for prosecution.

The unit will also refer evidence in support of disciplinary, administrative or executive actions to the relevant authorities for further action.

Toyota Land Cruiser

The Daily Maverick’s investigative unit, Scorpio, also revealed that Digital Vibes purchased a second-hand Toyota Land Cruiser for Mkhize’s son around the same time the health department transferred about R50 million to the company for its services.

Mkhize has denied the allegations levelled against him, saying he did not personally benefit from the Digital Vibes contract, even though his family may have.

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