Corruption allegations resurface at state biology lab

Procurement wars continue to dog the state-owned animal vaccine manufacturer, Onderstepoort Biological Products (OBP), with the company’s entire finance department leadership now being placed on suspension. 

In the latest instalment of instability at the organisation, the company’s acting supply-chain manager, Maleke Matolong, was suspended two days after he reported the chief executive, Baptiste Dungu, to the Hawks for allegedly trying to influence a R17-million tender to procure equipment for the laboratories.

The company claims Matolong was suspended in absentia on Monday as part of its probe into R14.2-million in irregular tenders last year. Matolong has worked at OBP since March this year; he previously worked at the treasury in the office of the chief procurement officer. 

Matolong’s suspension occurred on the same day as that of the company’s acting chief financial officer, Zolani Poni. This was three months after the suspension of supply-chain manager Lungelwa Nokaneng. 

The Mail & Guardian has learned that the company’s only finance specialist recently refused to act as a chief financial officer for fear of being induced to break the law. This means there is no one to effect payments or sign off on procurement. 


Documents seen by the M&G show that Matolong had given the OBP executive committee and interim board until midday on Monday to act on his disclosures, under the Prevention and Combating of Corrupt Activities Act, or else he would escalate these to the company’s government shareholder, the department of agriculture. 

The disclosure, made almost two weeks ago, was that OBP manufacturing manager Peter Wright and its chief executive, Dungu, had concluded a R1.7-million procurement of hand sanitiser and alcohol, outside procurement processes, from Krü Energy. This company was not registered on the treasury’s supplier database and was not tax compliant. 

Last month OBP shareholder representative, Agriculture Minister Thoko Didiza, appointed an interim board headed by a senior department official, Boitshoko Ntshabele. This was to respond to previous instability and chaos at the OBP, which has affected productivity. 

Farmers and veterinary services have been complaining about poor service they receive from the OBP. The company is integral to the farming sector, because it produces vaccines for livestock, and issues certification that animals destined for sale or export are free from foot and mouth disease and other ailments. 

Meanwhile, in an email sent to company secretary Nevashne Sarabeah on Saturday September 14, Matolong said: “I would like you to provide me with an escalation process or procedure because I intend to bring the matter to the attention of the interim chairperson of the board and the shareholder as the public authority to ensure that they exercise their fiduciary duties by 12pm on September 14.”

He had also informed the board that he had submitted a statement to the Hawks about alleged efforts by Dungu to induce members of the bid-specification committee to award a R17-million contract to procure two freeze dryers from one company without competitive bidding. A source with intimate knowledge of the matter said Matolong was hit with a suspension letter when he was at home on Monday after his access to the OBP’s server had been blocked all morning. This was in an apparent attempt to prevent him from escalating the matter to Didiza’s office.  

But this was disputed by Sarabeah, who said the suspension was ordered by the board and came after preliminary investigations had uncovered that 22 companies were paid for stock that was never received. 

“One of the companies, Galaza Professional Services, was identified through the forensic audit last year as regularly paying the former [chief financial officer] about R100 000 a month),” she said. 

Galaza director Kgomotso Mashaba denied the allegations. “How could I pay anyone there R100 000 a month when mostly my invoices are for R12 000 for paper and cotton wool?”

Sarabeah also said that, as a result of the investigation, the company has not even asked Matolong to make representations on why he should not be fired. “Matolong, it must be stressed or noted, was not suspended for whistleblowing, but for allegations of fraud and corruption while in his capacity as an acting [supply-chain manager],” she added.

Sarabeah said there had been action on Matolong’s information because Wright had been placed on precautionary suspension while investigations continue.

Wright, who is alleged to have introduced Krü Energy to OBP, used supply-chain stationery without approval and received the delivery himself without running quality checks. He could not be reached for comment because his phone has been off since Tuesday.

Krü Energy director Reynhard Kruger said he was not responsible for internal processes at OBP, adding that it found his company on the treasury’s central supplier database (CSD). This is despite the fact that Krü Energy was registered on the CSD days only six days after his first payment for delivery to OBP. 

It is not clear why Dungu, who signed off the pro-forma invoice from Wright, is allowed to continue working, while Wright, Matolong and Poni have been suspended so that they do not interfere with ongoing investigations.

On Thursday afternoon the M&G learnt that OBP’s board has called a special inquiry for Friday to discuss Matalong’s allegations against Dungu.

Earlier this week, Dungu said he could not comment on the Krü Energy matter, because it was part of ongoing investigations. On the dryers, he said: “I have not been involved in the procurement process of the freezer dryer, but have been involved in technical discussions.”

Previous OBP controversies reported in the M&G include that its previous board lied about senior officials who were purged for allegedly refusing Dungu’s inducements to do wrong. The company paid millions to mutually separate from the three executives.

Dungu, originally from the Democratic Republic of Congo, was appointed without the security clearance required to work at the national key point. Since his appointment, he has been at the centre of dodgy dealings, including signing off on his own R18 000 monthly car allowance. 

Dungu also caused the OBP to pay more than R100 000 to Kevin Govindsamy for one day’s work after he was hired as a chief financial officer without background checks. Such checks would have shown that he was fired from his previous job at Amatola Water in the Eastern Cape for misconduct.

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Sabelo Skiti

Sabelo Skiti is an investigative journalist.

Related stories

Why crooks are shivering in their boots

Ace Magashule’s anxiety has to do with the array of arrests of high-profile people facing fraud and corruption charges

Did Yster play ace in the hole?

Is the ANC secretary general a gambling man — or just stirring the pot over the ‘news’ of his arrest warrant

How graft arrests came together

Learning from its failure to turn the Schabir Shaik conviction into one for Jacob Zuma, the state is now building an effective system for catching thieves. Khaya Koko, Sabelo Skiti and Paddy Harper take a look behind the scenes at how law enforcement agencies have started creating consequences for the corrupt

‘Haunted’ VBS executive Truter sentenced to seven years

Phillip Truter, the former chief financial officer of the defunct mutual bank who pleaded guilty to fraud and other charges, will work with authorities on how the alleged heist took place

What is the noise about Ace?

The Hawks have distanced themselves from a news report that the ANC’s secretary general Ace Magashule has been issued with a warrant of arrest

Eusebius McKaiser: What’s worse than corruption? Complacency

Corruption isn't just about unethical accounting practices. It is a direct and total attack on society. The stakes are that existential and that visceral.
Advertising

Subscribers only

SAA bailout raises more questions

As the government continues to grapple with the troubles facing the airline, it would do well to keep on eye on the impending Denel implosion

ANC’s rogue deployees revealed

Despite 6 300 ANC cadres working in government, the party’s integrity committee has done little to deal with its accused members

More top stories

Fake trafficking news targets migrants

Exaggerated reports on social media of human trafficking syndicates snatching people in broad daylight legitimate xenophobia while deflecting from the real problems in society

It’s not a ‘second wave’: Covid resurges because safety measures...

A simple model shows how complacency in South Africa will cause the number of infections to go on an upward trend again

How US foreign policy under Donald Trump has affected Africa

Lesotho has been used as a microcosm in this article to reflect how the foreign policy has affected Africa

Trouble brewing for Kenya’s coffee growers

Kenyan farmers say theft of their crop is endemic – and they suspect collusion
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday