The Special Investigating Unit (SIU) has found that former health department acting director-general Dr Anban Pillay committed fraud, gross misconduct, negligence and dereliction of duty and should be prosecuted for his alleged “main actor” role in the irregular awarding of a multimillion-rand communications contract to Digital Vibes.
The SIU’s final report, which President Cyril Ramaphosa received in July and released on Wednesday, looked into the awarding of a R150m tender to Digital Vibes for work related to the proposed National Health Insurance plan. The contract was later extended to projects on Covid-19.
Digital Vibes is headed by former health minister Dr Zweli Mkhize’s former personal assistant, Tahera Mather, and his former secretary, Naadhira Mitha. Mkhize resigned over the saga in August, hours before Ramaphosa reshuffled his cabinet.
The release of the SIU’s final report also comes a few days after the health department’s current director-general, Sandile Buthelezi, was suspended for his alleged role in the saga. The department has said that while the contract between the department and Digital Vibes was already in place when Buthelezi was appointed in 2019, it was what he potentially failed to do afterwards that resulted in his suspension.
In the report, the SIU dismissed the Digital Vibes contract as fruitless and wasteful expenditure incurred by the national health department.
In the report, the SIU said Pillay — he is now deputy director-general for health regulation and compliance — in a letter to the Treasury on May 11, where he requested approval to deviate from normal procurement procedures, “made numerous material intentional misrepresentations ... in an attempt to obtain belated approval to deviate from normal procurement procedures. The obtained evidence indicates that he committed fraud in this regard”.
It said he should be “criminally prosecuted for financial misconduct” and for disciplinary action to be instituted against him for contravening sections of the public finance management act (PFMA), the Constitution, and gross dereliction of duty, among other charges.
On March 6, Pillay sent an email from his private email address to Mather requesting a quotation for the printing of 20-million pamphlets, airtime vouchers, four billboards, radio advertising and television slots over two weeks for the Covid-19 awareness communication. Pillay had acknowledged in the email to Mather that “this is not currently part of your scope”.
“It is noteworthy that Dr Pillay had decided to [send] the email from his private email address instead of his official [departmental] email address, which indicates that Dr Pillay may have been trying to hide his conduct from the [department] or public scrutiny,” the SIU report stated.
“On the same day [March 6 2020], Mather responded with an outline of the services and a quotation from Digital Vibes in the amount of R35,906,450. The quotation was for 15-million pamphlets, 18.75-million airtime vouchers, four billboards, radio advertising and 90 wall murals (10 wall murals in nine provinces in prominent places for a period of three months including taxi ranks).”
Pillay had responded to Mather’s email with: “Your proposal is approved. Please advise on the expected payment schedule for this plan and the timelines for implementation.”
The SIU said that taking into account the amounts received from the department and an analysis of Digital Vibes’ bank account(s), “it appears that Digital Vibes failed to declare and pay company tax and failed to pay the required VAT to the SA Revenue Service”.
“Evidence was obtained justifying the blacklisting of Digital Vibes from conducting business with the public sector,” the report said.
The SIU also found that health department CFO Ian van der Merwe and Buthelezi both contravened the PFMA, with the latter criticised for “allowing payments to Digital Vibes amounting to approximately R60m, in circumstances where such payments constituted irregular expenditure, as envisaged in the PFMA, and parts thereof also constituted fruitless and wasteful expenditure, as envisaged in the PFMA”.
Buthelezi should have conducted a comprehensive due-diligence exercise before allowing such any payments, the SIU said.
In court papers filed in the Special Tribunal in July, the SIU wants the R150m contract reviewed and set aside and for those implicated to be ordered to pay the SIU or the department of health the money they received with interest.
It said there was evidence that Mkhize had directly and indirectly received gratifications from Digital Vibes, citing R3.8m that flowed to Mkhize’s son, Dedani, while another R6,720 was used for repairs at Mkhize’s Bryanston property. Digital Vibes paid R160,000 to purchase a Toyota Land Cruiser for Dedani from a Pietermaritzburg car dealership on May 4.
The former health minister has denied wrongdoing.
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