The Special Tribunal has denied an application by businessman Hamilton Ndlovu and entities associated with him for a stay of the application instituted by the Special Investigating Unit (SIU) and the National Health Laboratory Service (NHLS) to review and set aside contracts awarded to him.
Ndlovu gained notoriety when he posted a picture of a fleet of brand-new vehicles he had bought with what the SIU says was money flowing from the irregular awarding of contracts worth R172-million to companies linked to him by the NHLS to supply personal protective equipment (PPE) as part of the response to the Covid-19 pandemic last year.
In a ruling on Tuesday, Judge Lebogang Modiba found that Ndlovu and the other applicants’ claim that the refusal of the stay application would violate their constitutional right of access to the courts was unsustainable and not bona fide and that Ndlovu failed to establish that it was in the interest of justice for the review application to be stayed.
“Therefore, granting a stay under these circumstances is a great disservice to the public interest. It will also undermine the principle on which the tribunal is founded, to expeditiously dispose of tribunal proceedings. The tribunal rules were drafted to promote this objective,” Modiba ruled.
On 31 August, the SIU and the NHLS obtained an interim interdict from the Special Tribunal preserving properties and funds under the control of Ndlovu worth approximately R42-million. The SIU and NHLS established that transactions were obtained by Ndlovu’s companies by abusing the emergency procurement procedures adopted by the NHLS to respond to the Covid-19 disaster.
In the latest ruling, Modiba found that Ndlovu barely denied the allegations by the SIU and NHLS that he and the other applicants failed to make full disclosure of financial means and may have other independent means to finance the review application.
The judge said in the application for the interim order, a prima facie case was made out that approximately R152-million flowed to Ndlovu for his personal use.
“Only R103-million is preserved under the SARS (South African Revenue Service) preservation order and the interim order. Approximately R50-million remains unaccounted for by Ndlovu. This includes R15-million withdrawn in cash through tellers and ATMs,” the judge said, adding that Ndlovu had a “paltry response” to the opposing respondents’ allegation that R50-million remained unaccounted for.
“For the purpose of the stay application, it is to the tribunal that the applicants owe a duty to candidly place facts before it to justify the exercise of a discretion in their favour to stay the review application. They have failed in this regard,” Modiba found.
Should the PPE contracts be set aside, the NHLS and SIU seek a judgement debt in the amount of R172.7-million against Ndlovu. Modiba noted that the difference between this amount and the value of the assets preserved under the interim order is approximately R130-million.
“It is therefore in the interest of justice that the review application is finalised without delay for the opposing respondents to resort to post-judgment execution processes,” she ruled.
“Such processes may include an application for a provisional order placing the applicants under provisional sequestration and liquidation as appropriate, for a full investigation into their undisclosed assets. Therefore, the funds that have not been accounted for remain under significant risk of dissipation.
“The review application is replete with allegations of Ndlovu’s disposition to quickly dissipate funds and channel them through associated third party companies to avoid detection. The dissipation of R10-million in legal fees through Ndlovu’s erstwhile attorneys in just seven months, which is common course in this application, is evidence of Ndlovu’s such disposition.” Modiba added.