Digital Vibes beneficiaries say they don’t owe the state

The “unlawful” beneficiaries of more than R10.6-million which flowed from the controversial R150-million Digital Vibes Covid-19 communications contract have argued in court that they do not owe the Special Investigating Unit (SIU) anything because Mduduzi Mthethwa, who received the money before disbursing it, had repaid it.

Among the beneficiaries is Sithokozile Mkhize, the daughter-in-law of former health minister Zweli Mkhize. 

During a leave-to-appeal hearing before the Special Tribunal on Monday, lawyers for five entities that benefited argued that Mthethwa had repaid more than R11.5m and that it would be an “absurdity” for the beneficiaries to pay a settled debt. 

Mthethwa was found by the SIU’s Digital Vibes forensic report to have been listed as a witness to the contract the health department concluded with the communications company in 2019. Mthethwa had received R25m to be the contract’s witness. 

The R150m contract was initially for Digital Vibes to handle National Health Insurance communications on the health department’s behalf, before a Covid-19 public relations component was added in early 2020. 

In April, the Special Tribunal granted the SIU’s application to join four companies — as well as Sithokozile Mkhize, who is married to Dedani Mkhize, the former health minister’s son — that transacted with Mthethwa after he received his Digital Vibes payment. Sithokozile Mkhize received R650 098 from Mthethwa, which was not contested by her legal representative, William Nicholson. 

The four companies are All-out Trading, Tusokuhle Farming, Cedar Fall Properties and Sirela Trading. 

In its court papers, the SIU argued that the four companies and Sithokozile Mkhize “have no right to retain the monies or benefits which are the proceeds of unlawful transactions unless they can show they were not  unjustifiably enriched thereby”.

But the four companies and Sithokozile Mkhize argued that the Special Tribunal erred in joining them in the SIU’s main application to recover the R150m, arguing that Mthethwa had repaid the state and the SIU could not ask them to go beyond what had already been settled. 

Nicholson, on behalf of Sithokozile Mkhize and All-out Trading, argued on Monday that the more than R11.5m Mthethwa paid the SIU “logically included the full value” accrued by his clients and that a different court would rule that his clients should not be joined to the SIU’s main application.

“It is this unnecessary and absurd scenario which faces [All-out Trading and Mkhize] in terms of the joinder ruling,” Nicholson argued. 

Advocate Greg Harpur, who represents Tusokuhle Farming and Sirela Trading, said it was wrong for the SIU to join his clients because “they did not receive money from the government” and that the money was received from a bank account belonging to Mateta Projects, which Mthethwa is a director of.

“And that, really, is the end of the case. And, with respect, another court will, reasonably, come to that conclusion for the simple reason that that’s the law,” Harpur said, adding that Mthethwa had repaid the state. 

But the SIU argued that the Special Tribunal was correct in joining the entities because their legal counsel “persist”, in their leave to appeal application, to argue the merits of the SIU’s case, and rely considerably on the ‘repayment’ objection”. 

“The objection is irrelevant since the test for joinder of necessity does not entail a determination of the merits. The Special Tribunal was thus correct in its joinder decision,” the SIU, through advocate Iain Currie, said.

Judge Lebogang Modiba reserved judgement on the matter.

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Khaya Koko
Khaya Koko is a journalist with a penchant for reading through legal documents braving the ravages of cold court benches to expose the crooked. He writes about social justice and human-interest stories. Most importantly, he is a card-carrying member of the Mighty Orlando Pirates.

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