Pholosong Hospital was billed R484 346 for a bird repellent device. (Gallo Images)
M&G Investigation
Eighty-five companies — the majority of which are single-director shell businesses involved in apparent collusive behaviour — benefited from R48 million of vanity purchases approved by a Gauteng hospital chief executive and his alleged “corruption mafia”.
The procurement included wrist watches, a music concert and vastly inflated prices for repair work and renovations at Pholosong Hospital in Ekurhuleni, from May 2019 to August 2022.
The apparent collusion was revealed following the sourcing of 1 000 pages of internal documents during a Mail & Guardian investigation, showing more than 122 invoices paid during Ashley Mthunzi’s tenure as Pholosong Hospital’s chief executive.
All 122 transactions, totalling R48.3 million, were below the R500 000 threshold regulated by the treasury. Contracts for more than that amount have to be advertised for competitive bids.
The M&G previously reported that Mthunzi, who became Tembisa Tertiary Hospital’s chief executive but is now suspended, moved around with the same management team, called the “corruption mafia” by senior provincial sources, at Pholosong, Far East Rand and Tembisa hospitals – where they centralised procurement to allegedly loot from the ailing provincial health system.
Mthunzi’s alleged corruption came to a head on Tuesday when Tembisa hospital was raided by the Directorate for Priority Crime Investigation (the Hawks), which said that “there exist untoward practices in relation to contracts below R500 000 which have been issued purchase orders between 2016 and 2022”. The Hawks said the contracts totalled R850 million.
“In some of the contracts, hospital employees are said to have received gratification. The investigation team is to seize all relevant materials including documents [and] electronic gadgets deemed to be important in the progress of the investigation,” said Hawks spokesperson Colonel Katlego Mogale.
Mthunzi was appointed Tembisa chief executive in June last year, having been made acting chief executive two months prior. He was suspended in September.
Hot seat: Ashley Mthunzi During his time at Tembisa, he was still signing off payments below R500 000 at other health facilities, including R490 000 to retile the Far East Rand Hospital’s floor in May last year, despite official communication showing there was greater need for other items, including beds.
Internal documents show that in July last year Mthunzi signed off the payment of a R488 148 invoice to repair a Covid-19 overflow ward, yet only small partitions were procured to replace previous ones that were still in good condition.
The Special Investigating Unit (SIU), at the request of former Gauteng premier David Makhura, is also investigating Mthunzi’s alleged corruption during his time at Tembisa. SIU spokesperson Kaizer Kganyago said the unit was investigating procurement corruption at Tembisa, and not at other facilities.
“However, if our investigation points to any wrongdoing by any individual, the SIU will recommend that the appropriate action be
taken against them,” Kganyago said.
Collusion and price inflation
The M&G investigation showed collusion between three Ekurhuleni building supply companies, which scored a combined R7.9 million of contracts from Pholosong.
According to a background search, R&A Building Supplies, which received more than R3.8 million, has two employees, who each have registered companies — Mykatrade and Siyakhula Supplies — that received more than R1.5 million and more than R2.5 million, respectively.
Mykatrade’s director Marinna Patao and Siyakhula director Lynette Schoeman are employed by Ockert Britz, who is the sole director of R&A Building Supplies.
Patao and Schoeman are also directors of a nonprofit company called R&A Empowerment, which is undergoing a deregistration process, according to a company search.
When the M&G visited R&A Building Supplies under the guise of being a contractor looking to buy material, Patao was in the Brakpan shop, as confirmed by another employee, who will be referred to by the pseudonym Nkateko.
Nkateko confirmed that R&A Building Supplies regularly delivers materials to Pholosong and Far East Rand hospitals, and it gets temporary workers to do renovation work at the two hospitals.
“Pholosong Hospital receives regular work from people here at R&A Building Supplies.
“Even with the improvements you see at Far East Rand Hospital, we were responsible for all the work there,” Nkateko said.
R&A Building Supplies director Britz said his company was reputable and had been registered on the central supplier database “for many years” and had operated at the Brakpan premises for 15 years.
Motalatale Modiba, communications
director at Gauteng Health, who has ‘blacklisted’ the M&G.
The central supplier database lists companies accredited to provide goods and services to the government.
“All services and projects delivered and completed by R&A Building Supplies [were without any] irregularities, and [were] completed according to all specifications,” Britz said, adding that he also had “progress photos”, which he did not provide when asked.
“I am sure that, with permission, all projects completed can be viewed at the hospitals,” he said.
But several sources at Pholosong, as well as paid invoices, showed that Britz’s work was “vastly inflated”, including the November 2020 installation of a bird repellent device that cost R484 346.
The most expensive bird repellent device retails for under R700, according to price comparisons the M&G sourced.
Far East Rand Hospital was billed R490 000 to retile the floor. (OJ Koloti/Gallo Images)
Siyakhula’s secret supplies
Despite Siyakhula being recorded as a “maintenance and repair” business, according to a company search, Schoeman said her company was “registered for construction work” on the central supplier database.
“The jobs awarded and completed [were] all within the requirements of the department,” she said.
A visit to Siyakhula’s registered address in Nigel in Ekurhuleni — a standalone house in a residential area — showed no signs of the construction business, with none of the Chromadek carport roof sheets she supplied for R496 880 in July 2020, and R499 360 in December 2020.
Patao said Mykatrade was registered “for construction” by the Construction Industry Development Board, and that her business address was “active”.
But there was no sign of any construction activity when the M&G visited Patao’s registered address, which is also a residential property in Nigel.
The work done by Mykatrade included the repair of a push lawnmower for R51 270, when 17 lawnmowers could have been bought for the price to fix one, based on average prices at retailers.
“All projects I received [have] been completed to high standard satisfaction by all departments, and our workmanship is proof of all projects received,” Patao said.
R&A Building Supplies received more than R38 million from contracts for Pholosong Hospital. (Delwyn Verasamy/M&G)
More collusion unearthed
Other companies have benefited from work for Gauteng health facilities. Companies owned by Gaaratwe Mokhethi, the former wife of former Generations actor Thabiso Mokhethi, and the late Elizabeth Mathana Nkosi, a former Gauteng government employee, allegedly colluded in receiving more than R2.2 million in contracts from Pholosong, including the purchase of 200 Seiko wrist watches that were never delivered to the hospital.
Nkosi died in August last year after a short illness, according to sources who attended her funeral.
(Graphics: John McCann/M&G)
“[Nkosi] worked for Gauteng Shared Services Centre, and used to manage procurement and payments in Gauteng. She resigned around 2010 after having issues at work,” said one source, who asked to remain anonymous. “She was a buyer there.”
The source’s views are supported by an M&G background check, which also showed that Nkosi had been a director of Thabisa Morena, a company that received R474 095 to create partitions in Pholosong Hospital’s ward 9B.
Mokhethi is now the sole director of Thabisa Morena, and did not respond to repeated calls and text messages sent by the M&G for comment.
When the M&G visited the residential areas listed as addresses for both Nkosi and Mokhethi’s businesses, there were no signs of construction, and Nkosi’s property is inside a gated community in Dalpark, Ekurhuleni.
The M&G has also established that the provincial government has “blacklisted” this publication at the alleged direction of Motalatale Modiba, the health department’s communications director, who “committed financial misconduct”, according to an SIU report on Covid‑19 procurement corruption.
The department has refused to respond to questions from the M&G for the past three months pertaining to this investigation. The department has continued to ignore repeated questions, calls and text messages sent to it.
“There is a directive that Mail & Guardian questions related to the department’s corruption should not be answered because the people who need to send responses, including Modiba, are themselves implicated in corruption probed by the SIU,” said a senior Gauteng government source, who also asked to remain anonymous.
The source’s views were supported by the SIU’s Covid-19 corruption report, which found that, in April 2020, Modiba paid R172 500 for advertising services without sourcing competitive quotes, and requested a deviation from sourcing cheaper prices after making the payment.
“The deviation request was approved after the rendering of service and is therefore irregular,” states the SIU report.
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