The Special Investigating Unit (SIU) has successfully concluded settlement agreements with several companies and individuals following a 2022 judgment by the Special Tribunal, which reviewed and set aside contracts to the value of R431 million awarded by the Gauteng Department of Education (GDE) to various service providers for the decontamination, disinfection, and sanitisation of schools during the COVID-19 pandemic. The SIU has since concluded settlement agreements with some service providers and individuals linked to the Chachulani Group Investment Holdings (Pty) Ltd respondents, who have agreed to pay the SIU R25 million in full, out of the R40 million paid by GDE.
The service providers and individuals linked to the Chachulani Group Investment Holdings respondents who have signed the settlement agreements include:
- Muta Investment Holdings (Pty) Ltd
- Netvision Energy Savers (Pty) Ltd
- Psychin Consulting (Pty) Ltd
- Home Ground Trading 1105 (Pty) Ltd
- Mpale Investments Holdings (Pty) Ltd
- Finds Energy Suppliers (Pty) Ltd
- Favoured Street Properties (Pty) Ltd
- Mozambula Group (Pty) Ltd
- Imani Portfolio Holdings (Pty) Ltd
- Twin Cam Trading (Pty) Ltd
- Naledzi Investment Trust
- Ofhani Negota
- Munshedzi Ivy Motau
- George Negota Family Trust
- Munshedzi Ivy Motau N.O.
- Ofhani Negota N.O.
The service providers have consented to the following preserved amounts being debited from their respective bank accounts:
- R707,892.00 from the bank account of Chachulani Group Investment Holdings.
- R1,708,749 from the bank account of Netvision Energy Savers.
- R1,684,639.91 from the bank account of Mpale Investments Holdings.
- R12,898,728.09 from two offshore unit trusts of Naledzi Investment Trust.
- R8,000,000 from the bank account of Naledzi Investment Trust.
The financial institutions are required to transfer the settlement amount into the SIU’s bank account within seven days of the Tribunal granting the order.
This follows the Special Tribunal’s order preserving assets worth R27 million pending the final determination of the review application, which was finalised in 2022.
An SIU investigation found that the GDE deviated from standard procurement processs after schools were closed during the peak of the pandemic in March 2020 and subsequently reopened in June 2020 under the COVID-19 Disaster Management Regulations.
As part of preparations for the reopening of schools, the GDE implemented cleaning protocols requiring schools with reported COVID-19 cases to close temporarily for decontamination and sanitisation.
The SIU’s probe found that service providers were sourced informally from exsting supplier databases, referrals, and WhatsApp messages without the involvement of the GDE’s Supply Chain Management (SCM) division, despite SCM being responsible for sourcing and vetting suppliers.
The investigation revealed that the procurement process was not cost-effective, as service providers were not paid per square metre of the area cleaned. Rather, a senior official in the GDE appeared to have arbitrarily decided to offer a fee of R250 000 to R270 000 for the decontamination of primary schools; R250 000 to R290 000 for secondary schools; and R250 000 to R300 000 for district offices.
The fees charged were not proportionate to the work performed by the service providers or the cost of materials used.
The SIU found that the selection and appointment of the service providers were conducted in a haphazard, unfair, and inequitable manner, contrary to the requirements of Section 217 of the Constitution.
Senior officials involved in the procurement process also admitted that prescribed SCM procedures were not followed.
Tribunal ordered the service providers to submit detailed financial statements and records, commonly referred to as a “statement and debatement of account”; explain the process through which they were appointed; disclose the services rendered; indicate the amounts paid to them; and enable the SIU to calculate the profits derived from the contracts.
Meanwhile, the service providers have agreed to withdraw their appeal before the Johannesburg High Court formally.
This settlement is a critical outcome of the SIU’s relentless efforts to recover public funds lost during the COVID-19 national state of disaster. The SIU remains committed to protecting public funds, restoring integrity in procurement, and ensuring that those who unlawfully benefit from state contracts are brought to justice.
President Cyril Ramaphosa directed the SIU, under Proclamation R23 of 2020, to investigate allegations of corruption, maladministration, and malpractice, as well as payments made by State institutions, in relation to PPE procurement and the conduct of State employees.
The SIU is also empowered to institute civil action in the High Court or a Special Tribunal to address any wrongdoing uncovered during investigations related to corruption, fraud, or maladministration.
In line with the Special Investigating Units and Special Tribunals Act 74 of 1996, the SIU refers any evidence of criminal conduct it uncovers to the National Prosecuting Authority for further action.
Enquiries:
Selby Makgotho
Spokesperson: Special Investigating Unit
Cell: 083 718 6128
SIUMedia@siu.org.za
ISSUED BY THE SPECIAL INVESTIGATING UNIT