The Special Investigating Unit (SIU) probe into the health department’s dealings with Digital Vibes includes adverse findings against former health minister Zweli Mkhize, former head of communications Popo Maja, former acting director-general Dr Anban Pillay and former director-general Sandile Buthelezi.
President Cyril Ramaphosa on Wednesday released the report about the health department’s dealings with the obscure private company Digital Vibes, which was first paid to offer communications services regarding National Health Insurance (NHI) and later commissioned to work on Covid-19 media campaigns.
The SIU recommends Pillay be criminally prosecuted for suspected financial misconduct.
SIU head Andy Mothibi said evidence justifies disciplinary action against Pillay, Maja, Buthelezi and four other health department officials. The SIU also justifies banning Digital Vibes from doing business with the government.
Ramaphosa released the 114-page report three months after it was signed off. Mothibi authorised the document on June 30, and Ramaphosa received it early the next month. Ramaphosa explained the lag in releasing the report by saying that in the interests of fairness he gave parties the chance to object to its publication.
Irregular processes
The report homes in on R150m the department of health paid to Digital Vibes, owned by Mkhize’s long-time friend and former PA Tahera Mather.
The SIU found procurement processes for the department’s NHI and Covid-19 media deals with Digital Vibes were irregular, making associated agreements void. “In this regard, irregular expenditure amounting to about R150m, and fruitless and wasteful expenditure amounting to about between R72m and R80m was incurred,” the report reads.
Soon after finalising the investigation, the SIU secured an interim preservation order to pin down assets associated with the alleged swindle. In June, a designated anticorruption court, the Special Tribunal, granted an order freezing R22m held in several bank accounts.
A Nedbank account held by Digital Vibes and assessed by investigators shows that on May 2 the company transferred R300,000 to an intermediary, which forwarded the funds to a firm owned by Mkhize’s son Dedani. Two days later, Digital Vibes paid R160,000 to a car dealership in Pietermaritzburg for a second-hand 2003 Toyota Land Cruiser, which was registered in Dedani Mkhize’s name.
When these transactions occurred, the department had transferred about R50m to Digital Vibes for the Covid-19 campaign, the SIU found. Digital Vibes transferred significant funds to Dedani Mkhize via EFTs converted into cash, the SIU reports.
Oversight failure
It found the circumstances in which the health department entered the R141m NHI campaign and R35m Covid-19 campaign were “highly irregular” and conflicted with procurement laws.
While the department endorsed a R35m quotation for the Covid-19 drive, it spent about R125m on this campaign. This, asserts the SIU, indicates Mkhize’s failure to conduct oversight.
The SIU cites a letter Pillay sent to the National Treasury asking for permission to deviate from the amounts after the department had already done so. The SIU found he grossly misrepresented the facts.
Mkhize personally benefited when Digital Vibes paid R6,720 for repairs to his Bryanston, Johannesburg, property. The SIU reviewed invoices with the name “Mkhize” and a phone number listed.
The former health minister said he did not ask for the repairs and the phone number was not his. “However, the indicated cellular number, in eNatis records, is linked to vehicles registered in the name of the minister,” the SIU notes.
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