The service provider, LNG, has been ordered to pay back the profit earned from the R113.2 million PPE contract
The Special Investigating Unit (SIU) on Tuesday welcomed a ruling by the special tribunal declaring that a contract for the supply of personal protective equipment (PPE) contract worth more R113.25 million awarded to private company LNG by the Gauteng department of health during the Covid-19 pandemic is invalid and unlawful.
The judgment, handed down on 7 February, ordered that LNG be denied all profits under the invalid contract. The company has also been ordered to submit “audited statements setting out its income and expenses in relation to the PPEs” delivered to the Gauteng health department.
An investigation by the SIU found that in April 2020 the provincial health department’s then chief financial officer, Kabelo Lehloenya, “took the decision” to procure 500 000 N95 face masks, one million three-ply surgical masks and 250 000 boxes of 100 sterile, powder-free surgical gloves.
Lehloenya then recommended that head of department, Mkhululi Lukhele, approve LNG’s contract, deviating from normal procurement procedures and that this be reported to the Gauteng treasury for a pardoning of the deviation.
‘An SIU investigation in the affairs of Gauteng health department has found that the competitive bidding process was not followed and deviation from this process was not duly approved, and the contracted prices were high,” SIU spokesperson Kaizer Kganyago said in a statement.
“Furthermore, the SIU found that LNG was not registered on the government’s central supplier database for the supply of PPE when it was awarded the multimillion-rand contract.”
The SIU was directed by President Cyril Ramaphosa to investigate allegations of corruption, maladministration and malpractice made by state institutions relating to Covid-19 PPE procurement.
On Tuesday, the SIU said it would file an expert report on the reasonableness of the income and expenses set out in LNG statements as directed by the court.
The SIU is empowered to institute civil action in the high court or a special tribunal in its name to correct any wrongdoing uncovered during both investigations caused by acts of corruption, fraud or maladministration.
In line with the Special Investigating Units and Special Tribunals Act, the unit refers any evidence pointing to criminal conduct it uncovers to the National Prosecuting Authority for further action.