SIU freezes R8.4 million in properties linked to Northern Cape PPE fraud
The SIU has secured interim preservation orders on three high-value properties linked to nearly R27 million allegedly looted from the Northern Cape Department of Health, as part of efforts to recover public funds.
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The Special Investigating Unit (SIU) has frozen three high-value properties worth approximately R8.4 million, linked to the alleged looting of nearly R27 million from the Northern Cape Department of Health during a PPE procurement scandal in the COVID-19 pandemic.
The move forms part of the SIU’s civil proceedings to recover public funds unlawfully paid for a PPE contract during the COVID-19 pandemic.
The interim order prevents the respondents from selling or dealing with the properties in Kimberley and Bryanston, which are suspected to have been bought with the proceeds of the fraud.
Kaizer Kganyago, spokesperson for the SIU, said: “The preservation orders placed on these properties are intended to facilitate the recovery of financial losses suffered by the state due to corruption or maladministration.”
The SIU’s investigation found that in June 2020, Macronym 37 (Pty) Ltd was awarded a contract to supply the department with 50,000 coveralls, 250,000 surgical masks, and 250,000 FFP2 (N95-equivalent) masks.
The contract, valued at R26,960,025, was authorised by the department’s then Chief Financial Officer, Daniel Gaborone, and approved by Acting Head of Department, Dr Dion Theys.
The PPE was intended for healthcare facilities and workers across the province, he said.
Kganyago said investigators revealed that the procurement was fraudulent and premeditated. A “deviation” dated 24 March 2020 was used to bypass National Treasury rules, but the deviation itself had been drafted on 11 March, before the relevant Treasury instruction was even published.
The order quantities were inflated, with the department’s own submission requesting only 30,000 N95 masks and no coveralls, yet the contract included 50,000 coveralls and 250,000 masks, creating an over-expenditure of over R8 million on masks alone.
He further said forensic analysis showed that invoices from sub-contractor Masedi Star were fabricated in 2022, with two contradictory versions existing.
Kganyago said bank records indicated Macronym paid only R2 million instead of the R13.248 million claimed.
Financial tracing revealed that within days of receiving the state funds, the company used the money for personal enrichment, including property purchases, transfers to related parties, cash withdrawals, and luxury items such as a jacuzzi and a high-end sound system.
He said the investigation also found that Macronym was not tax-compliant and was not registered as a medical supplier at the time of the contract award. Evidence showed direct WhatsApp communication between the company’s director, Christopher Somandla Sibisi, and CFO Daniel Gaborone.
Furthermore, poor stock management at the Henrietta Stockdale Nursing College meant that 44,438 coveralls could not be accounted for, with the Auditor-General unable to verify deliveries, said Kganyago.
Kganyago noted that President Cyril Ramaphosa had directed the SIU, under Proclamation R23 of 2020, to investigate corruption, maladministration, and unlawful payments by state institutions related to PPE procurement.
''The SIU is empowered to institute civil action to recover state funds and refers evidence of criminal conduct to the National Prosecuting Authority.''
hope.ntanzi@iol.co.za
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