Former health minister Dr Zweli Mkhize’s conduct in manipulating tender processes to award Digital Vibes a R150-million contract with his department was “at worst unlawful”, according to a Special Investigating Unit (SIU) report released by President Cyril Ramaphosa.
The investigative body’s long-awaited report found that Mkhize’s denials that he or his family had benefited from the tender were “untrue”.
Although the SIU has recommended that criminal charges be pursued against current health director general Dr Sandile Buthelezi and former acting director general Dr Anban Pillay over the Digital Vibes award, it has only recommended executive action by the president against Mkhize.
The former health minister resigned from his post in August after the SIU submitted the damning report to Ramaphosa — relieving the president of the responsibility of firing him — and appears, for now, to have avoided criminal prosecution over the debacle.
Ramaphosa finally made the report public on Wednesday, ending months of speculation about exactly what role Mkhize, a one-time ANC presidential hopeful, had played in rigging the tender process and appointing Digital Vibes by unlawful means.
According to the report, Mkhize’s conduct in approaching the then director general of the department to appoint Digital Vibes was “at best improper … and at worst … unlawful” because it constituted interference in the affairs of the department’s administrative authority.
The selection of Digital Vibes to conduct National Health Insurance and Covid-19 media campaigns was irregular, as were subsequent extensions and modifications of the contract, the report found.
As a result, the department incurred “irregular and fruitless expenditure” amounting to R150-million, over which Digital Vibes “owners” Tahera Mather and Naadhira Mitha should be charged for fraud.
Mather is Mkhize’s former spokesperson and played a key role in his campaign for the ANC presidency in 2017, which he abandoned.
According to the SIU report, she is a “close associate” of Mkhize, who had publicly attempted to distance himself from her.
The report recommended that Pillay should be “criminally prosecuted for financial misconduct” and said that a referral would be made in this regard in due course.
Evidence obtained indicated that Mather and Mitha committed fraud in that they held out that Digital Vibes was tendering, when in fact the company was a front for them.
They “used Digital Vibes as a front in order to hide the fact that they were tendering for the contract and ‘disguised’ this, due to the fact that they were close associates of the minister of health,” it said.
Digital Vibes “owner”’ Radha Hariram had also committed fraud by fronting for the duo, who, along with Mkhize’s family members and current and former associates, had contravened anti-corruption and money laundering legislation in defrauding the state of R150-million.
The report said that after an analysis of the Digital Vibes bank accounts it was clear that the company had also failed to declare and pay company tax and VAT to the South African Revenue Service.
Turning to Mkhize, the SIU found that on 15 July 2019, he had sent a WhatsApp message to the then director general, Malebona Matsoso, instructing her to “sort out contractual arrangements” for Digital Vibes.
“It is apparent … that the minister was giving instructions to the DG. At best, the conduct on the part of the minister was improper and at worst, the conduct of the minister was unlawful,” the report said.
During this period, Digital Vibes paid R6 720 for repairs on a house owned by Mkhize; R300 000 to the company of Mkhize’s son, Dedani, and a further R160 000 for a Land Cruiser for Dedani.
The report said that Mkhize’s subsequent denial that he or his family had benefited from the contract was “untrue”.
It said Mkhize had not exercised ministerial oversight and, when approving budget requests from Digital Vibes, should have “at least raised concerns”’ about the expenditure.
It was also “astonishing” that Mkhize had “deliberately ignored a cabinet decision” that Covid-19 communications would be done by the Government Communication and Information System and had gone ahead with the appointment of Digital Vibes and it was “inexplicable” that he could have allowed an extension of their agreement.
The report found that R3.4-million had been laundered by Mather through a Cash & Carry, whose owner would provide her and Hariram with boxes and bags of cash in a “clandestine” manner, after money was transferred to the company by EFT.
It said Mkhize’s son had collected laundered money at a petrol station where Hariram was employed as a manager.