Johannesburg - Ledla Structural Development, a front company used by the Gauteng Health Department to pay Royal Bhaca Projects R80 million, paid R300 000 towards Thandisizwe Diko’s R4m personal protective equipment (PPE) bill with the supplier.
One of its directors, former Nedbank senior manager Rhulani Lehong-Mboweni, who was joined by Diko when she visited Mediwaste to negotiate payment terms for Royal Bhaca, also swindled Diko of R1m by asking the PPE manufacturer to inflate prices and deposit the difference into her personal account.
This is contained in an affidavit given to the Special Investigating Unit (SIU) by Mediwaste director Jonathan Maake this week.
Sources said the SIU interviewed Maake at his offices in Edenvale and left his premises with an affidavit, emails and financial records relating to Royal Bhaca’s R139m PPE contract.
They said Lehong-Mboweni was also interviewed but the SIU investigators “struggled” to get hold of the Dikos, who failed to return calls.
This came as the SIU this week opened criminal charges against Royal Bhaca, Ledla and Mediwaste at a police station in Joburg.
The unit also froze the three companies’ bank accounts and those of their suppliers as part of a crackdown on Covid-19 PPE procurement fraud and corruption.
Sunday Independent reported last week that the Gauteng government paid Royal Bhaca through Ledla after concerns of procurement corruption were raised.
Royal Bhaca, owned by the husband of President Cyril Ramaphosa’s spokesperson, Khusela Diko, was later paid at least R80m in 12 tranches of between R120 000 and R38m within a week.
The payment was made through Ledla even though the company did not appear on the original list of 75 successful bidders who shared R2.2billion worth of PPE contracts.
Ledla invoiced the provincial health department for items which bore a striking resemblance in value, quantity and pricing to those supplied by Diko.
In response to the exposé, the Dikos sent Sunday Independent a lawyer’s letter threatening legal action unless it retracted the story and apologised.
The letter, sent by law firm Mbabane Maswazi and Mkosana Inc last Sunday, claimed “these false and untested allegations are deliberate and aimed at mobilising vicious public views against our clients with the sole aim of tarnishing their dignity”.
In his affidavit, however, Maake said Lehong-Mboweni and her fellow Ledla director Norman Lehong, visited his premises on April 3 to order PPEs.
“They informed me that they represented Royal Bhaca Projects (Pty) Ltd.
“They showed me a commitment letter from the Gauteng Department of Health in which Royal Bhaca was awarded the supply of 1 000 000 bio-hazard health-care waste boxes and 1 000 000 bio-hazard health-care disposable bags plain red.
“They informed me that they did a search on Google to identify a service provider who could supply the boxes and the bags and found my company, Mediwaste,” Maake said.
He said they reached a verbal agreement in which Mediwaste would supply 100 000 bags, which he had in stock, and the rest of the 1million order within 10 days.
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Later in April, Lehong-Mboweni and Lehong returned to place another order for plastic bags, boxes and containers.
“At the time of their request, I still regarded them as Royal Bhaca officials as they were previously ordering on behalf of Royal Bhaca.
“I indicated to them that I have already provided some of the plastics bags to Royal Bhaca. Both Lehong and Lehong-Mboweni indicated that they are now running a separate business from that of Royal Bhaca and they were the representatives of Ledla Structural Development.”
This time, Lehong-Mboweni and Lehong ordered 1million plain red bags, 1 million boxes and 500 000 500ml bottle sanitisers.
“When both Lehong and Lehong-Mboweni came with this second order, I did not request the commitment letter obtained from their client, which is Gauteng Department of Health.
“The reason was that we have already established a relationship and in some of the deliveries payments were already made. Because this occurred during the initial lockdown period, I indicated to Ledla that I would be increasing the price due to the fact that there was a huge demand and this was putting a straining on Mediwaste’s production level.
“My initial price was R0.65 before VAT which was charged (to) Royal Bhaca, I then increased it to R0.95 before VAT. Ledla agreed to the price increase,” said Maake.
At a meeting held to discuss payments and prices, Maake said, Lehong-Mboweni gave assurance that payments would be made and “she even confirmed that with the chief financial officer, which at that time I did not even know her name, and I later learnt that it is Kabelo Lehloenya”.
Lehloenya mysteriously resigned from her position in May.
“Lehong-Mboweni requested me to inflate the price from R0.95 to R2.95, because I was invoicing them and she was a representative and a director of Royal Bhaca, I did not have a problem with that.
“The inflation of price resulted in the total value of the order amounting to R3 390 000. Lehong-Mboweni indicated that she will pay an amount of R3 390 000 and then Mediwaste will have to deduct an amount R2 390 000 and the remaining R1 000 000 will be sent to her account after payment has been made,” the affidavit said.
Maake said Mediwaste was paid a total of R4m in four tranches of R302 235.25 on May 18, R74 750 on May 20, R195 500 on May 20 and R3 390 000 on August 3, this year, after delivering most of the items to a warehouse in Roodepoort.
However, when The Sunday Independent exposed Ledla as a front for Royal Bhaca, Lehong-Mboweni instructed Maake to return payments made towards Diko’s PPEs, saying it would be made in cash.
“The amount of R302 235.25 which was paid by Ledla came as a result of the amount owed to us by Royal Bhaca. Lehong-Mboweni instructed us to credit the amount paid to the statement of Royal Bhaca.
“Later when the media reported on the news, Lehong-Mboweni instructed us to move the money from Royal Bhaca’s account statement to Ledla’s statement of account.
“She indicated this money will be used to set off some of the deliveries and outstanding payments which Ledla requested. She further indicated that, they will bring a cash amount of R302 235.25 to settle the amount outstanding from Royal Bhaca.
“I instructed my staff member to do as instructed by Lehong-Mboweni.
“The account of Royal Bhaca is now in arrears with an amount of R302 235.25 and the account of Ledla has an excess amount of R302 235.25,” said Maake’s affidavit.
Lehong-Mboweni and Diko failed to respond to requests for comment yesterday.
SIU spokesperson Kaizer Kganyago said: “We do not give rolling commentary on our investigations. The only thing I can confirm is that so far we have referred two officials to the premiers’ office for disciplinary hearing, and we have opened criminal cases against three companies.”
Kganyago declined to give the names of the companies involved, but The Sunday Independent has established that they are Royal Bhaca, Ledla and Mediwaste. We have also learnt that the officials referred to Gauteng Premier David Makhura for disciplinary hearings are Letloenya and the department’s chief director for supply chain management, Tiny Pino, who signed off on the PPE contracts. Lehloenya yesterday referred all questions to the Gauteng Department of Health.
Without mentioning them by name, Makhura told the media that Lehloenya and Pino would be dealt with for “allegedly enabling this large-scale grand corruption”.
He said Pino was suspended.
This week Ramaphosa and Finance Minister Tito Mboweni moved to curb the PPE fraud. The president appointed a ministerial task team, led by the Minister of Justice and Correctional Services Ronald Lamola, to deal with corruption in the procurement of Covid-19 resources.
He requested all ministers and premiers to provide all procurement records including the names of the companies and contract values.
Mboweni told MPs the National Treasury has instructed all government departments and entities to refrain from using emergency measures in the procurement of PPEs in favour of normal regulations set out in the Public Finance Management Act.