I'm the scapegoat, says former Gauteng health CFO over PPE scandal

Former Gauteng health CFO Kabelo Lehloenya says she is being made a scapegoat for the corruption allegations related to Covid-19 personal protective equipment (PPE) that have rocked the department.

In August, the Special Investigating Unit (SIU) obtained an interim freezing order against the bank accounts of a number of companies, saying its investigation had uncovered that contracts were corruptly awarded to Ledla Structural Development — a “proxy” for Royal Bhaca Projects, owned by the husband of presidential spokesperson Khusela Diko.

The Dikos are family friends of former Gauteng health MEC Bandile Masuku, who was fired this month after the SIU wrote topremier David Makhura detailing the findings of its investigation.

Lehloenya resigned at the end of May. Masuku has launched a separate court case challenging the letters sent to Makhura.

In the meantime, the Special Tribunal is due to hear in November whether the interim freezing order should be made final.

Lehloenya, who has not spoken publicly since the scandal broke, said in court papers filed on Monday that she found it “bizarre” that the SIU would conclude that she was responsible for a loss of R6.2m because more than 95% of all the payments made to Ledla were made after she left the department.

“It is apparent that I am being made a scapegoat,” she said.

She said the SIU knew or ought to have known that the majority of its complaints in its affidavit took place after she left office, but had failed to disclose this fact to the court. This was a material non-disclosure and a breach of the SIU’s duty of fundamental good faith to the court when it made an application in the absence of those against whom the order was sought.

On this basis alone the SIU’s application should fail — “irrespective of the strength of the SIU’s case in other aspects,” she said.

The SIU’s papers placed Lehloenya at the centre of the corruption allegations and asked the court to order that her pension be frozen alongside the various bank accounts of companies and people who were alleged to have received the proceeds of unlawful activities.

But in her affidavit, Lelhoenya says that she put in her resignation letter at the end of May and though she was on the payroll until the end of August, she was out of the department from the earlier date.

“With effect from May 29 2020 I was not physically present at the offices ... I played no part whatsoever in any decisions to appoint service providers [or] process their payments,” she said.

Lehloenya also denied that she acted without authority, saying that the procurements were lawfully delegated to her. Everything she had done was known by the head of department and the provincial command council, she said.

“Nothing was hidden,” she said.

The SIU had also surprisingly treated the PPE procurement as normal procurement, when in fact it was emergency procurement, she said.

Lehloenya described how, in preparing for the coming surge of Covid-19, the province’s “war room” anticipated that the province’s health department had PPE shortages amounting to over R1.7bn.

There was a global shortage of PPE, with suppliers all over the world massively inflating prices. While the National Treasury had tried to counter this by regulating prices and service providers, “our experience was that the items were not available from the service providers mentioned by the National Treasury,” said Lehloenya.

“It was on this basis that decisions were then taken to source from suppliers other than those listed,” she said, adding that this was lawful in terms of the Treasury guidelines. But in any event the procurement from Ledla was within the permitted price range.

“National Treasury Note 8 was complied with to the letter,” she said.

Lehloenya also said there was nothing untoward in a number of the allegations of irregularities upon which the SIU had built its case. It was true that Ledla and Royal Bhaca were not listed on the government’s central supplier database as PPE suppliers, but at the time hardly anyone was.

“The supply of Covid-19 was new. It only became a business opportunity on a wide scale [in] March 2020. It is impossible that there would have been such suppliers in sufficiently large numbers to provide for the need.”

Also, the general rule set by the Treasury was not applicable during emergencies. It was allowed that the department could source from a non-listed supplier who would then register later on the database.

It was also not unusual for smaller suppliers to require assistance to be compliant with government requirements and Royal Bhaca was not the only supplier that had been assisted, said Lehloenya.

On the 800% mark-up by Ledla from the original supplier Mediwaste, Lehloenya said that Mediwaste had not tendered for the contract and to her knowledge there were no alternative suppliers.

“Without any action taken by the primary supplier, it is simply impossible to fathom why it is stated that instead of obtaining the supplies from Ledla, these had to be obtained elsewhere.”

She said she did not know the relationship between Ledla and Diko.

“I do not believe that the payments made to Ledla were payments made to Mr Diko and Royal Bhaca.”

Lehloenya specifically denies the allegation that supply chain chief director Thandy Pino had raised with her that Diko was politically connected and that she had responded that “the MEC wants his people”.

“The allegation is also improbable on its own. There is no explanation why Ms Pino claims that Mr Diko is ‘very well known politically’. Mr Diko simply had no political roles that are mentioned in the founding affidavit. There is therefore no basis why Ms Pino would have assumed that Mr Diko is someone who is well known politically,” she said.

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