The Special Investigating Unit (SIU) announced on Friday it has secured an interim preservation order to freeze three high-value properties worth about R8.4m linked to the alleged looting of about R27m from the Northern Cape department of health.
The SIU said the order from the Special Tribunal formed was of its ongoing civil proceedings to recover public funds paid unlawfully for a personal protective equipment (PPE) contract during the Covid-19 pandemic. The order was granted against the assets of Kimberley businessman Somandla Sibisi and his companies Macronym 37 (Pty) Ltd and Aphiwokuhle Holdings.
“The interim preservation order prohibits the respondents from selling or dealing with three properties in Kimberley and Bryanston, which are suspected to have been bought with the proceeds of this fraud,” the SIU said in a statement.
In October, the National Prosecuting Authority announced its Asset Forfeiture Unit had obtained a preservation order against assets related to the same contract. They include a R900,000 residential property, a business property known as Live Café worth more than R2m, R300,000 kitchen equipment and a 2013 model Audi A1 vehicle bought for R130,000.
The SIU investigation found that in June 2020, Macronym was awarded a contract to supply the department with 50,000 coveralls, 250,000 surgical masks and 250,000 FFP2 (N95-equivalent) masks. The PPE was intended for distribution to healthcare facilities and workers across the province.
This award, made by the department’s then CFO Daniel Gaborone and approved by the acting head of department Dr Dion Theys, was for a total value of R26.96m.
The SIU investigation found the contract was awarded without any lawful procurement process.
“A ‘deviation’ dated March 24 2020 was used to illegally bypass National Treasury rules.”
This deviation was drafted on March 11 2020, before the relevant Treasury instruction was published, proving a premeditated scheme.
The SIU said the final order bore no relation to the department’s actual needs.
“The department’s own approved submission of March 23 2020 did not request any coveralls and specified a need for only 30,000 N95 masks. However, the contract with Macronym unlawfully included 50,000 coveralls and inflated the mask order from 30,000 to 250,000, creating an over-expenditure of over R8m in masks alone.”
The SIU said its forensic analysis proved that key invoices from the sub-contractor, Masedi Star, were created in 2022, two years after the alleged deliveries, solely to mislead the SIU investigations.
“Two contradictory versions of the invoice exist and bank records show that Macronym paid Masedi Star only R2m, not the R13.248m claimed.”
Evidence also showed direct WhatsApp communication between Macronym’s director Sibisi and Gaborone during the procurement process.
Financial tracing revealed that within days of receiving the R26.96m from the state, Macronym, which was previously in overdraft, used the funds for extensive personal enrichment.
“This included R3.86m for property purchases, R4.2m transferred to a related party, Aphiwokuhle Holdings, over R8.2m to other Sibisi family members and entities, as well as R1.12m in cash withdrawals. Additionally, there were payments for a jacuzzi, a high-end sound system, motor vehicles, and school fees.”
At the time of the award, Macronym was not tax-compliant and was not registered in the central supplier database as a medical supplier, the SIU said.
It said the department’s storage facility at the Henrietta Stockdale Nursing College had no effective stock management system.
“Records were so poor that a shortfall of 44,438 coveralls could not be accounted for and the auditor-general flagged the inability to verify the deliveries.”
President Cyril Ramaphosa had directed the SIU, under Proclamation R23 of 2020, to investigate allegations of corruption, maladministration, malpractice and payments made by state institutions concerning PPE procurement and the conduct of state employees.
TimesLIVE
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