The Special Investigating Unit (SIU) welcomes two judgments by the High Court of South Africa: Gauteng local division, Johannesburg, in the awarding of physical security tender worth more than R185 million at the South African Broadcasting Corporation (SABC).
The High Court reviewed and set aside a decision by the former interim board of the SABC to disregard recommendations of bid committees when appointing Mafoko Security Patrols Pty Ltd to provide physical security service despite Mafoko not being the recommended service provider. In another judgment, the High Court dismissed an application by the former interim board of the SABC to review and set aside SIU report which recommended that they be declared delinquent.
Physical security tender set aside
In a judgment dated 10 October 2023, the High Court ruled that the 30 June 2017 decision by the Interim board to appoint Mafoko Security Patrols to provide physical security at SABC offices and guard TV outside broadcast was invalid and is reviewed and set aside. The interim board took a decision to award Mafoko a security tender for a period of 5 years commencing 1 August 2017 at a total contract price of R185 519 425,61, which was R2.300.955,43 more than the contract price for Mjayeli Security. Mjayeli was recommended by three tender committees to the board for appointment.
In terms of the High Court judgment, Mafoko Security Patrols must within 30 days submit an audited statement of the expenses incurred in the performance of its obligations in terms of the tender, the income received and the net profit it would have earned at the expiry of the contract. The High Court also ordered the SABC to obtain an independent audited verification within 60 days. After that, the Court will determine the amount of profits to be paid back by Mafoko to the SABC or the SIU.
Dismissal of application by former interim board members
The High Court dismissed an application brought by former interim SABC board members, Khanyisile Kweyama, Mathatha Tsedu, Febe Potgieter-Gqubule, and John Matisohn seeking an order reviewing and setting aside the remedial actions contained in the SIU Report. The report was in respect of the investigation into the procurement of goods and services on behalf of the SABC from Mafoko Security Patrols.
The SIU investigation found that the interim board had irregularly awarded the security contract to Mafoko Security Services, and their action was wrongful and irregular. The SIU believes they were supposed to consider launching an investigation, cancel the tender, or remitting it for reconsideration. The SIU found that the interim board failed to discharge their fiduciary duties in that respect and failed to act in the best interests of the SABC.
The interim board members argued that the SIU report was irrational, SIU’s investigation was unconstitutional and contravened the principle of legality, and the SIU went beyond the scope of the President’s Proclamation. Furthermore, they contended that the SIU acted irrationally and procedurally unfairly and exceeded its powers in reaching the findings.
However, the High Court dismissed the application and ruled that the SIU acted in accordance with the Proclamation by the President, which included investigating maladministration.
In dismissing the application, Judge D Dosio said that the schedule of the Proclamation gave the SIU wide powers.
The SIU was, in terms of Proclamation R19 of 2018, authorised by President Cyril Ramaphosa to investigate to investigate, amongst others, the procurement of goods, works or services by or on behalf of the SABC from Mafoko and to recover any financial losses suffered by the State or SABC.
The High Court judgments are the continued implementation of SIU investigation outcomes and consequence management to prevent and recover financial losses suffered by the State due to corruption or negligence.
In welcoming the judgements, Head of the SIU, Adv. Andy Mothibi stated that this are important judgments relating to consequence management and accountability of the Accounting Authority (Board of Directors).
“The Court’s reference to the King Code on Good Governance underscores the requirements, as also provided for in the Public Finance Management Act, for the Boards of Directors to always act in the interest of State Institutions”.
Adv. Mothibi further stated that, the SIU has at all times emphasized that all those involved in causing losses to State Institutions should be held to account, irrespective of their level in the State Institutions including members of the Accounting Authority. Private Sector parties and companies involved should also be held to account and face consequences, he said.
The SIU is empowered by the Special Investigating Units and Special Tribunals Act 74 of 1996 to institute civil action in the Special Tribunal or the High Court to correct any wrongdoing it uncovers in its investigation.
The SIU refers the evidence pointing to criminal conduct to the National Prosecuting Authority for further action.
Spokesperson: Special Investigating Unit
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