Business Report can today reveal how Maseko appointed Ranamane Mokalane Inc in June 2016, utilising the group’s “emergency procurement process”, despite the fact that the company’s sole director was suspended and subsequently banned by the Law Society of the Northern Provinces.
The condonation report, signed by Maseko on August 15, 2016, motivated for the normal supply chain management (SCM) process to be subverted.
“The chief executive (Maseko) had to urgently seek for potential alternative remedies for the court case which was to sit on an urgent basis,” reads the report.
“The emergency process was therefore followed due to the urgency of the matter. Given the processes of the night before, it was not feasible to engage into a fully fledged SCM process requesting a minimum of three quotes of using the panel process.” Mokalane was appointed in the evening of June 26, 2016, to appear in court the following day.
Maseko’s bizzare request was approved by the company’s national bid adjudication committee and the firm was hired against 15 other approved by the legal services panel. The committee however, did not approve the further appointment of the firm beyond June 27, 2016, or its inclusion in the approved legal panel.
On August 11, 2016, Ranamane Mokolane Inc billed Acsa for R2.2million, including R349454.90 for a legal opinion.
Acsa’s payment history requisition report datedFebruary 10, 2017, show that Ranamane Mokalane was paid in excess of R7m between August 2016 and February last year. Acsa refused to give the exact amount paid to Ranamane Mokolane Inc to date. But a source close to the company said the amount could be more than R14m.
In November last year, the Auditor-General Kimi Makwetu said Acsa had irregular expenditure of R1.1billion in the 2016/17 financial year, up from R134m in the previous financial year.
In its 2017 annual report, Acsa admits that SCM faced challenges during the year related to due diligence process and business alignment.
Interestingly, according to Acsa’s records, payments to Ranamane Mokolane Inc were ceded to a certain Peter Maphepha Maake.
This according to a source was because Ranamane Mokolane was not in possession of a tax clearance certificate.
Acsa last week confirmed that Ranamane Mokolane was indeed not in possession of a tax clearance when it procured its services.
“During the vendor vetting process in October 2016, it was discovered that there was no valid Sars tax clearance certificate and Airports Company South Africa could not pay, as this would have been deemed irregular expenditure,” Acsa said. “A cession of debt was entered into between Acsa, Ranamane Mokalane Inc, and a senior council who was also working on the matter, for payment until January 2017. This is a standard commercial process.”
The company said Ranamane Mokalane Inc subsequently submitted a valid tax clearance certificate.
The firm was previously known as Ranamane Phungo Inc. However, at the time of the invoicing, it was trading as Ranamane Mokalane, with Ranamane as its sole director.
The Law Society suspended him on March 10, 2016, before being finally being struck off the roll of practising attorneys seven months later by a court order.
Judge AC Basson had found that Ranamane had misappropriated R5m, which was deposited by the Gauteng’s Department of Public Works, Roads and Transport into the trust account of the firm. Ranamane was further found to have overreached when it did work for the National Health Laboratory Service.
“For example, on October 3, 2010, Ranamane spent 22 hours on conducting research which on the face of it is excessive taking into account a 24 hour day,” reads the judgment.
“Further, on October 3, 2010, Ranamane spent 32 hours on the instruction for which a fee of R48000 was debited. This is clearly an example of overreaching as it is not possible to spend 32 hours during a 24 hour day.”
Acsa’s legal panel comprised of some the industry’s heavyweights, including Cliffe Dekker Hofmeyer, Bowman, Hogan Lovells and Norton Rose Fulbright. Acsa could not explain how the firms were not available to deal with the matter.
The legal panel went through a public advertisement and was assessed and approved by the Acsa National Bid Adjudication Committee.
This panel was for a period of 3 years from September 1, 2013, to September 31, 2016, but it was further extended for a few more months to allow for the evaluation of a new legal public tender until May 2017. A new panel has since been appointed, but Ranamane Molakane still does not form part of the new panel and according to the source the firm continues to do work for Acsa.
According to legislation, an accounting officer could provide for procurement through deviations using Treasury regulation 16A6.4 in emergency situations when it was impractical to invite competitive bids.
However, regulation also stipulates that the accounting officer must report to treasury and the auditor-general all cases where goods or services above the value of R1m VAT inclusive were procured in terms of the Treasury Regulation 16A6.4 within 10 working days. A source who was close to the process said the National Treasury and the Auditor-General were kept in the dark about payments to Ranamane Mokalane.
“There was never a notification to the Treasury or the Auditor-General informing them as per the regulations that payments to Ranamane Mokalane exceeded R1m, and no request was made to the Treasury to approve payments to the firm that have exceeded by 15percent the original appoinment for the period to June 27, 2016,” the source said.
In response to Business Report on why the company did not report the irregular appointment to the Treasury, Acsa said: “Treasury Regulation 16A does not apply to Schedule 2 companies. Therefore Regulation 16A does not apply to Acsa. Acsa has to comply with its own internal SCM policies and procedures only when it comes to emergency procurement. We therefore did not have to report to the Treasury.”
There have been allegations of mismanagement levelled against Maseko and the company’s board had previously wanted to suspend Maseko without any success.