The Special Investigating Unit (SIU) has secured an interim preservation order from the Special Tribunal to freeze three high-value properties valued at approximately R8.4 million. The properties are linked to the alleged looting of approximately R26.96 million from the Northern Cape Department of Health. This decisive action forms part of the SIU’s ongoing civil proceedings to recover public funds paid unlawfully for a Personal Protective Equipment (PPE) contract during the COVID-19 pandemic.
The interim preservation order prohibits the respondents from selling or dealing with three properties in Kimberley and Bryanston, which are suspected to have been bought with the proceeds of this fraud. 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 Northern Cape Department of Health with:
- 50,000 Coveralls
- 250,000 Surgical Masks
- 250,000 FFP2 (N95-equivalent) Masks
This award, made by the Department’s then Chief Financial Officer, Mr Daniel Gaborone, and approved by the Acting Head of Department, Dr Dion Theys, was for a total value of R26,960,025.00. The PPE was intended for distribution to healthcare facilities and workers across the province.
Key Findings of the SIU Investigation
The SIU’s investigation revealed systemic fraud and corruption:
A Predetermined, Unlawful Procurement: The contract was awarded without any lawful procurement process. A “deviation” dated 24 March 2020 was used to illegally bypass National Treasury rules. Crucially, this deviation was drafted on 11 March 2020, before the relevant Treasury instruction was published, proving a premeditated scheme.
Gross Inflation of Quantities: The final order bore no relation to the department’s actual needs. The department’s own approved submission of 23 March 2020 did not request any coveralls and specified a need for only 30,000 N95 masks. However, the contract with Macronym unlawfully included 50,000 coveralls and inflated the mask order from 30,000 to 250,000, creating an over-expenditure of over R8 million on masks alone.
Fabricated Evidence and Fictitious Invoices: Forensic analysis proves that key invoices from the sub-contractor, Masedi Star, were created in 2022, two years after the alleged deliveries, solely to mislead the SIU investigations. Two contradictory versions of the invoice exist, and bank records show that Macronym paid Masedi Star only R2 million, not the R13.248 million claimed.
Immediate Diversion of Public Funds: Financial tracing reveals that within days of receiving the R26.96 million from the state, Macronym, previously in overdraft, used the funds for extensive personal enrichment. This included R3.86 million for property purchases, R4.2 million transferred to a related party, Aphiwokuhle Holdings, over R8.2 million to other Sibisi family members and entities, as well as R1.12 million in cash withdrawals. Additionally, there were payments for a jacuzzi, a high-end sound system, motor vehicles, and school fees.
Supplier Non-Compliance and Collusion: At the time of the award, Macronym was not tax-compliant and was not registered in the Central Supplier Database as a medical supplier. Evidence shows direct WhatsApp communication between Macronym’s director, Mr Christopher Somandla Sibisi, and the Department’s CFO, Mr Daniel Gaborone, during the procurement process.
Poor Delivery and Non-Existent Records: The department’s storage facility at the Henrietta Stockdale Nursing College had no effective stock management system. Records were so poor that a shortfall of 44,438 coveralls could not be accounted for, and the Auditor-General flagged the inability to verify deliveries.
President Cyril Ramaphosa directed the SIU, under Proclamation R23 of 2020, to investigate allegations of corruption, maladministration, malpractice, and payments made by State institutions concerning 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:
Kaizer Kganyago Spokesperson: Special Investigating Unit
Cell: 082 306 8888
E-mail: KKganyago@siu.org.za