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Sekunjalo Group's link to health scandal

Sam Sole and Craig McKune

One of the group's affiliates is implicated in a probe into a tender for an information system for Gauteng

Iqbal Survé head of the Sekunjalo Group. Photo: Lerato Maduna,Gallo

Iqbal Survé’s flagship Sekunjalo Group has emerged as an indirect role player in the Gauteng health scandal.

A Sekunjalo-related company, Amethst, and Gerrit Henning, the chief executive of Sekunjalo’s most profitable subsidiary, Health Systems Technologies, have been implicated by the Asset Forfeiture Unit (AFU) investigation of the Gauteng department of health.

The Mail & Guardian last week revealed the AFU had obtained provisional court orders freezing contract claims against the department amounting to R1.4-billion, including a R1.1-billion claim by the Baoki Consortium.

In 2007 Baoki was contracted to deliver a health information system to Gauteng, but the AFU put forward a raft of evidence alleging the contract was tainted by fraud and corruption.

Amethst was an 80% partner in Baoki. 

Health Systems Technologies holds 50% of Amethst. Henning is Health Systems Technologies’s managing director and was the leader of the Baoki tender.

On Thursday the Amethst board – on which Henning serves – announced a “full investigation” into the allegations. 

Sekunjalo also expressed its “dismay and shock”.

Underhanded maneuvers

The AFU described in court papers how the Baoki bid was crudely manipulated so that it edged out the tender of its much cheaper short-listed competitor.

The AFU highlighted two issues that it laid at Baoki’s door.

In a last-minute “clarification” of its pricing the consortium simply shaved 14% – the equivalent of VAT – off its initial bid price.

According to the AFU: “Throughout the bid process, all pricing had included VAT … Baoki would not have so misrepresented its price without the knowledge that a drop in its price by this margin and at this stage of the process would secure it the bid, and that the bid evaluation committee [BEC] would overlook the variation.”

The second alleged irregularity concerned the manipulation of the training costs allocated to Baoki and to its competitor.

According to the AFU, neither bid provided for the training of employees of the department but provided instead for the “training of trainers”, who would then train end users.

Irregularities, manipulation and “thumb-sucking”
The AFU claims that evidence shows that shortly after the bid submission process was finalised, Henning emailed a letter to the department’s bid secretary stating that Baoki’s price now included end-user training.

The email asked whether “the contents are adequate”, suggesting that the letter was written to comply with requirements set by the bid evaluation committee.

The AFU alleges: “To include end-user training at this stage was patently irregular, as it amounted [to] the amendment of the bid specifications. It was ... not the function of the BEC to negotiate with bidders or prompt them to modify their bids.”

The AFU describes how the evaluators “thumb-sucked” an end-user training cost for Baoki’s competitor and added it to the competing bid, pushing it above the Baoki price.

The AFU investigator notes: “The extensive involvement of employees in the rigging of the bid in favour of Baoki could not have taken place without a prior decision and co-ordination and authority from the highest levels within the Gauteng department of health.”

The AFU alleges Amethst played a role in keeping the senior officials onside by the provision of what it argues were corrupt payments. 

Evidence of corruption
The evidence discloses a banking account in the name of “Dr Mookeletsi trading as fundraising account”.

Dr Obakeng Mookeletsi was the Gauteng health department’s deputy director general at the time. He could not be reached for comment.

According to the evidence the account was used to pay for venues, T-shirts and catering and equipment hire for rallies during the elections held on April 22 2009 – to advance what was termed “the ANC and Mr Hlongwa’s re-election”.

Brian Hlongwa was the health MEC at the time and remains the ANC’s Gauteng chief whip. An aide said he was “not responding to the media”.

Amethst paid R100 000 into this account on January 27 2009. It made a R200 000 payment on March 27 2009.

The AFU argues: “The payments had the effect of further inducing and sustaining the unlawful conduct of Mr Hlongwa in advancing the contract in favour of Baoki; alternatively it was a reward to Mr Hlongwa for doing so.”

Claims based on the alleged corrupt contract have been provisionally frozen, but Baoki may challenge the ruling.

Amethst’s response:

The Amethst board is considering the allegations set out in papers served by the AFU last week. It takes the allegations very seriously.

Amethst has been engaged in arbitration proceedings against the Gauteng department of health and was shocked to learn about the allegations. 

A full investigation is being conducted and the Amethst board has appointed ENSAfrica as well as senior counsel to deal with these issues. The company will respond in the appropriate manner suggested by the fruits of an investigation …

The Amethst board does not and will not tolerate any corruption.

Sekunjalo’s response:

The board of directors of Sekunjalo Investments Ltd and its wholly owned subsidiary, Health Systems Technologies, have received, with dismay and shock, the allegations of corruption against Amethst, a company in which Sekunjalo holds an indirect, noncontrolling shareholding, and one of its foreign directors.

These allegations ... need to be tested in a court of law, but the Health Systems Technologies and Sekunjalo boards of directors have requested that Amethst remove the relevant director from the board …

The Sekunjalo board has requested Amethst to co-operate fully with all investigations by all authorities.

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The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.

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