Covid-19 corruption: accounts in PPE scandal frozen
The Special Investigating Unit (SIU) this week froze bank accounts holding more than R100m suspected to have been obtained fraudulently from the Gauteng health department by three companies accused of inflating the prices of goods meant to fight Covid-19.
The accounts belong to Ledla Structural Development, Royal Bhaca Projects and Mediwaste, the companies at the centre of the personal protection equipment (PPE) scandal that has rocked the department.
A senior government source close to the SIU said the Financial Intelligence Centre (FIC) froze the accounts at the request of the SIU. But the FIC can only freeze an account for 10 days.
SIU spokesperson Kaizer Kganyago said an urgent application has now been filed with the Special Tribunal - which was set up by President Cyril Ramaphosa in February last year to claw back looted money - to freeze and preserve the accounts until the investigation is completed. He did not name the companies involved.
"We are waiting for a date from the Special Tribunal, but the hearing will happen this week. The investigation will determine whether we should launch a civil suit to forfeit the money on behalf of the state or not."
Kganyago said the unit was in the process of identifying other bank accounts into which money was transferred from the three accounts.
"We want to freeze those too," he said, adding that the SIU is expected to launch other similar applications in the coming days and weeks.
The SIU is also gunning for the pension fund of Kabelo Lehloenya, the Gauteng health department's former chief financial officer, who authorities have identified as having allegedly signed off irregular PPE contracts worth over R2bn.
Lehloenya resigned hastily in June after Gauteng premier David Makhura announced he had asked the SIU to investigate allegations that PPE contracts had been awarded to business people with political connections and prices had been grossly inflated.
Kganyago confirmed that the SIU will launch another urgent application with the Special Tribunal to prevent Lehloenya from accessing her pension fund pending an investigation into her conduct.
"We have now written to the Government Employees' Pension Fund to ask them not to pay the pension fund out in the meantime," he said.
Lehloenya declined to comment when contacted by the Sunday Times.
Royal Bhaca Projects is owned by Thandisizwe Diko, who is married to President Cyril Ramaphosa's spokesperson, Khusela Diko.
Khusela Diko is on special leave while the investigation is under way, while Makhura suspended his health MEC Bandile Masuku.
Masuku's wife, Noloyiso Masuku, a member of the mayoral committee of the City of Johannesburg, was also placed on leave due to speculation her friendship with the Dikos could have influenced the awarding of the contract to Thandisizwe Diko.
In April, Royal Bhaca Projects received a R125m contract to supply the Gauteng health department with biohazard medical waste refuse bags and hand sanitisers. The contract was cancelled after it was flagged by Gauteng Audit Services.
A senior executive close to the SIU said Ledla and Royal Bhaca had "agreed to defraud the department by inflating prices". Mediwaste supplied the goods.
Molatelo Lehong, a director at Ledla, said yesterday his company did not have any relationship with Royal Bhaca. The Sunday Times was not able to reach Royal Bhaca and Mediwaste.
The executive also said the SIU was finalising its investigation into the Eastern Cape health department's purchase of 100 scooters to transport patients at a cost of R10m.
Also under investigation is R4.8m paid for a door-to-door Covid-19 awareness campaign in the OR Tambo district municipality during lockdown.
The executive said that while investigations continue, the two cases have been handed to the SIU's civil litigation unit.
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