Those who illegally scored from millions paid to Diko 'proxy' company must pay it back
Nearly two dozen companies that scored from Thandisizwe Diko's “proxy” company after it received millions from the Gauteng health department last year have been ordered to forfeit the money to the state.
The Special Tribunal — which was probing alleged corruption in the acquiring of personal protective equipment for the Gauteng health department — ruled on Thursday that 21 companies that benefited from the tender awarded to Ledla Structural Development must forfeit the cash they received.
In total, according to a tribunal statement on Thursday afternoon, about R18.5m will be forfeited, with the money “allegedly spent wrongfully in the procurement of PPE”.
In court papers last year, the SIU described Lela as “proxy” to Royal Bhaca, a company belonging to Thandisizwe, the husband of Kusela Diko, who was President Cyril Ramaphosa's spokesperson at the time of the Covid-19 outbreak. According to claims the SIU laid out in court documents last year, the company was reported to have made an 800% mark-up on PPE sold to the government.
Special Tribunal court documents dated Thursday state that Ledla became a “substitute” when it became public knowledge that Royal Bhaca had scored a multimillion-rand contract from the health department. (Editor's note: the full court papers are available at the end of this story.)
The Dikos are family friends of ousted Gauteng health MEC Bandile Masuku, who was at the helm of the department at the time. The scandal surrounding the PPE fraud in the Gauteng health department ultimately led to the sacking of Masuku, who has since challenged his dismissal in court. Judgment has not yet been handed down in that matter.
In a statement on Thursday, the Special Tribunal said the forfeiting of these funds was aimed at recouping some of the R38.7m allegedly spent in the wrongful procurement of PPE. The 21 companies are said to have received varying amounts, with some getting as little as R10,100 but others receiving much more.
In one instance, K Manufacturing and Supply raked in R16.5m — the most of any company. Of this, however, more than half was considered legitimate.
The tribunal said K Manufacturing received the money from Ledla on August 3 2020. The same day, R8m was moved out of its accounts. A few days later, on August 7 2020, the rest followed.
The tribunal found that the R8.5m payment was legitimate, but not the R8m.
Another company, Home Vision Projects, is also believed to have inexplicably received R1,393,200 from Ledla — a move which the tribunal also said seemed unlawful.
The tribunal said that judge Billy Mothle ruled that the following companies and amounts “are declared forfeit to the state”:
- K Manufacturing and Supply — R8,000,000
- Hellman Worldwide Logistics — R5,450,000
- Home Vision Projects — R1,393,200
- Maela Distributors and Projects CC — R938,415
- Skyline Contractors — R550,000
- XC Logic — R400,000
- Ronan Barashi — R400,000
- Double Click BTC — R308,885
- API Property Group — R250,000
- Mr Mapiti Aaron Molapa — R250,000
- Yuchang Xiao — R200,000
- Mr/Mrs Yonglian Lin — R129,400
- Xingyu Plastic Recycling — R126,000
- Injemo Engineering and Plastic Products — R125,000
- Mortz Marketing Enterprise — R120,000
- Manikensis Investments 6 — R108,100
- Nutri K — R85,875
- PNE Graphics CC — R60,000
- Vivid Sights Projects — R39,000
- PHM Holdings — R10,100
- Mutasa Tool and Die Engineering — R10,000.
In December 2010, the tribunal had further stated that Ledla, Rhulani Mboweni Lehong and Kgodisho Norman Lehong, who are all affiliated to the company, should also forfeit all monies in their accounts to the state.
Meanwhile, seven individuals and companies which are said to have also received payment from Ledla have been cleared of any wrongdoing. These are:
- Mediwaste Packaging (Pty) Ltd
- Atturo Tyres (Pty) Ltd
- Atland Chemicals CC
- Empiru (Pty) Ltd
- Jonathan Maake
- Michael Gerad Rofail
- Patrick John Kalil.
The Special Tribunal has ordered the Special Investigating Unit, which had frozen the funds in the accounts of the six, release that money and that the SIU foot the bill for their legal costs.