Businessman Vusimuzi “Cat” Matlala has pleaded guilty to fraud, corruption and money laundering charges linked to the R360 million South African Police Service (SAPS) healthcare Medicare24 tender after reaching a plea agreement with the National Prosecuting Authority (NPA).
Matlala appeared at the Pretoria Specialised Commercial Crimes Court on Thursday, where he admitted to charges of fraud, corruption and money laundering.
Sentencing was postponed to 1 July, when the magistrate will either confirm or amend the 15-year sentence.
During proceedings, the magistrate asked Matlala how he pleaded to fraud charges after submitting fraudulent documents in January 2024 for a healthcare tender for the SAPS awarded to his company, Medicare24 Tshwane District.
“How do you plead to this count?” the magistrate asked.
“I plead guilty,” Matlala replied.
He subsequently pleaded guilty to the corruption and money laundering charges.
Matlala’s lawyer, Advocate Hlawu Maluleke, pleaded for leniency by the court and said that his client was the primary caregiver of six of his minor children: “He is 100% responsible for all of their living expenses, their support, that would include issues like school fees and medical-related expenses that have to do with his minor children.”
The magistrate said a breadwinner did not form part of the definition of a primary caregiver. Matlala’s lawyers argued that since his incarceration on 26 March, his wife, Tsakane Matlala, who was present at the court, had been acting as a primary caregiver in his place.
“I am not in a position today to make a finding as to whether it is indeed a just sentence. I’ve been provided with quite a voluminous document,” said the magistrate.
The case was postponed to this new date, when the magistrate will either confirm or amend the 15-year plea deal, with seven years suspended.
The plea agreement was concluded between Matlala and the NPA’s Investigating Directorate Against Corruption (IDAC), which recommended a sentence below the minimum, as Matlala agreed to be a section 204 witness to be called by the state to testify in subsequent cases, including against his co-accused.
Matlala was charged with 16 others in the R360 million Medicare24 scandal, including 12 high-ranking police officers, three company directors and the suspended national police commissioner, Fannie Masemola.
His company, Medicare24 Tshwane District, was also ordered to pay a R1-million fine, suspended for five years on condition that no further offences are committed during that period.
Addressing the court, the prosecution said it did not wish to minimise the seriousness of the matter despite supporting the plea agreement.
“The state acknowledges that this is a very serious matter. It is a complex matter involving tender fraud. The amounts involved are exorbitant,” the prosecutor said.
Although the contract was valued at more than R228 million, the bid adjudicator awarded the contract to Matlala’s R360 million bid. The court heard that SAPS had already paid more than R50 million to Medicare24 Tshwane.
In the plea agreement, Matlala acknowledged that the state possessed substantial evidence implicating him in the offences and accepted responsibility for his role in the scheme. The fraud charge relates to the unlawful submission of tender documentation that resulted in the awarding of a contract. According to the state, the company lacked the equipment, personnel and medical facilities required to fulfil the contract.
Investigators alleged that a compliant bid valued at about R228 million was sidelined in favour of Medicare24 Tshwane’s substantially higher bid, valued at R360 million.
Matlala’s corruption charge involves a R300000 payment made to SAPS official Brigadier Rachel Matjeng, who was involved in a romantic relationship with him.
Matjeng referred SAPS members to Medicare24 Tshwane for medical screening services while simultaneously receiving payments from Matlala.
The state argued that the payment constituted unlawful gratification to a public official who was involved in the implementation of the contract.
“The accused paid Rachel Matjeng, a member of SAPS who was stationed in the Division of Forensic Science. Matcheng was one of the end users of the contract awarded,” the prosecutor told the court.
On the money laundering charge, the state alleged that proceeds generated from the fraudulently obtained contract were channelled through a series of transactions designed to conceal their origin.
Senior investigating officer Brigadier Charity Motloung said the state supported the plea and sentence agreement after considering all relevant factors.
“I am satisfied that the prosecutor may enter into a plea and sentence agreement as stipulated,” Motloung said in an affidavit before the court.
“I am in agreement with the deviation from the prescribed minimum sentence.”
The court heard that criminal proceedings against Matlala and Medicare24 Tshwane began on 26 March. At his first appearance, Matlala did not apply for bail and had indicated his intention to enter into plea negotiations with the state.
The matter will resume on Wednesday, 1 July, when the magistrate will make a ruling on the proposed plea deal.