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Company awarded R103m PPE tender by Gauteng Health ordered to pay back the money

Company ordered to hand back PPE money from unlawful tender. Picture: Reuters/Mike Segar

Company ordered to hand back PPE money from unlawful tender. Picture: Reuters/Mike Segar

Published Jun 30, 2022

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Johannesburg – The Special Tribunal has ordered Zakheni Strategic Supplies to pay back profits earned from their invalid and unlawful R103m personal protective equipment (PPE) tender by the Gauteng Health Department.

The Special Investigating Unit (SIU) declared the Gauteng Health multimillion PPE tender awarded to Zakheni Strategic Supplies (Pty) Ltd to be invalid and unlawful following their probe into the contract on April 19, 2020.

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SIU Head of Stakeholder Relations and Communications, Kaizer Kganyago said: “The SIU probe uncovered 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.”

He said, 24 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.

Special Tribunal Judge President, Judge Modiba said: “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.”

Zakheni was ordered to provide audited financial statements for the financial year covering the period during which Zakheni and other parties performed under the contract in question ensuring that all audited financial statements reflect all the financial information pertaining to the contract.

The statements are expected to be handed over to the Registrar of the Tribunal and to the SIU, within 30 days.

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