A R103 million personal protective equipment (PPE) tender awarded by the Gauteng Department of Health to Zakheni Strategic Supplies (Pty) Ltd has been declared unlawful and invalid.
In a statement released by the Special Investigating Unit on Wednesday 29 June, the Special Tribunal has ordered that Zakheni must pay back all profits earned from the unlawful and invalid tender. The Special Tribunal reviewed and set aside the multimillion tender following an application by the Special Investigating Unit (SIU).
The SIU investigation in the Department of Health revealed that Zakheni was awarded a R103.7 million tender without following regulations governing public procurement.
SIU probe found that on 19 April 2020, the Department, through its Chief Financial Officer (CFO), Ms. Kabelo Lehloenya, received a quotation from Zakheni for the supply to the Department of specified PPE items like gloves and masks. Twenty-four hours later, the Department issued a commitment letter to Zakheni, signed by the CFO. In terms of the commitment letter, Zakheni would supply PPE to the Department to the value of R103 770 000.
Handing down the judgment, Judge President of the Special Tribunal, Lebogang Modiba stated: “The irregular manner in which the contract was awarded constitutes a material infraction to the constitutional values of fairness, transparency, equity, effectiveness and cost-effectiveness. Therefore, it is just and equitable to set aside the contract.
“Zakheni is not entitled to profit from an irregular contract. I find no basis to exercise my discretion to permit Zakheni to benefit from the contract under the present circumstances. It is therefore just and equitable that Zakheni is ordered to account to the Department for the profits it has earned or stands to earn from the impugned contract and to be divested of such profits.”
The company has been ordered to render to the Registrar of the Tribunal and to the SIU, within 30 days, audited financial statements for the financial year covering the period during which the parties performed under the contract, to the extent that the audited financial statements reflect all financial information pertaining to the impugned contract.