Johannesburg – The Special Investigating Unit (SIU) has successfully reviewed and set aside Royal Bhaca and its proxy Ledla Structural Developments’ contracts with the Gauteng department of health at the Special Tribunal Court in Joburg.
The SIU also secured a forfeiture order of millions of rands against funds contained in the two companies’ bank accounts, the companies’ directors and another entity linked to the two controversial companies.
Interestingly, the court has also heard about the involvement of Cyril Ramaphosa spokesperson, Khusela Diko’s cousin Sangoni, who the court papers indicate was involved in the payment of R16.5-million to a company called K Manufacturing under the assumption that the company had delivered goods to Ledla on credit.
These payments, according to the court judgment, were made on the instruction of Sangoni, who was neither a director of Ledla or Royal Bhaca.
The papers show that a further R8.5-million was also paid to Sangoni’s company Zakheni Strategic Solutions from Ledla’s payment made to K Manufacturing, and when confronted to explain the payment to Sangoni’s company, Ledla claimed that it was a payment of a loan.
But in his judgment, judge Billy Mothle indicated that they failed to produce a loan agreement and instead produced an agreement for a different company and not that of Sangoni’s Zakheni. Mothle further said the contracts awarded to Royal Bhaca and Ledla were unlawful, set aside and cancelled on the grounds of their illegality.
Mothle explained in his judgment that prices quoted by Royal Bhaca and Ledla were inflated, noting that the department had turned a blind eye and accepted the prices, which were far in excess of the maximum prices regulated in terms of the Treasury note 8 and 5.
“No evidence officials tried to negotiate for cost-effective prices”
The judgment reads: “There was no evidence that one or more, or all senior department officials made attempts to negotiate with the bidders to bargain for cost-effective prices from those quoted in the bids. Quotations were just accepted on the same terms with no evidence of meetings to evaluate and adjudicate.”
Mothle also ruled that Ledla was not registered on the central database of suppliers of medical goods and said its substitute of Royal Bhaca occurred in a corrupt manner because only one official was involved in the process. About the SIU’s interdict application against Government Employees Pension Fund’s release of former department of health chief financial officer (CFO) Kabelo Lehloenya’s pension and retirement benefits, the tribunal judge granted an extension to the SIU.
He indicated that the former CFO’s argument that the SIU failed to disclose to the court that the payment of R38-million to Ledla happened when she had already left the department was not enough for him not to grant an extension.
This, Mothle said, was because the interdict was granted based on her alleged role in the awarding of the contracts to Royal Bhaca and Ledla and not the payment of R38-million as she argued in her affidavit.
In his judgment, Mothle ordered that all monies belonging to Ledla Structural Development, K Manufacturing and accounts belonging to Rhulani Mboweni Lehong and Kgodisho Norman Lehong be forfeited to the state.
The judge ordered that 27 companies including Royal Bhaca should be further investigated by the SIU.
Spokesperson for the special tribunal Selby Makgotho confirmed the judgment, including that Ledla and bank accounts belonging to its directors Rhulani Mboweni Lehong and Kgodisho Lehong were forfeited to the state.
Follow @SundayWorldZA on Twitter and @sundayworldza on Instagram, or like our Facebook Page, Sunday World, by clicking here for the latest breaking news in South Africa. To Subscribe to Sunday World, click here.