South Africa’s special investigation unit urges treasury to blacklist Oracle over flawed tender

By Paul Vecchiatto

South Africa’s Special Investigation Unit, established to tackle corruption and the misuse of public funds, asked the National Treasury to bar Oracle Corp. from doing business with the government because of what it says was a flawed tender.

The contract, which is with the Treasury, is related to a system that keeps track of government accounts, spending and assets aside from state salaries. The tender, worth 800 million rand ($42 million), was awarded almost two decades ago, but a working system has not been delivered. The Treasury is contesting the SIU’s findings.

Oracle didn’t respond to a request for comment sent by email.

Should the so-called blacklisting go ahead, Oracle would join companies including KPMG LLP, McKinsey & Co., SAP SE, ABB Ltd. and Bain & Co. among companies that have been either fined or barred from doing business with South Africa’s government. Those actions were related to allegations of corruption, or because tenders were allegedly improperly awarded.

“Legally we can go ahead with our findings as they are based on evidence,” Andy Mothibi, head of the SIU, told lawmakers in Cape Town on Wednesday. The report is an interim one and will be finalized soon, he said.

The SIU also recommended the criminal prosecution of five Treasury officials and a review of that department’s supply chain management.

When the report is final, “we will formalize our representations to demonstrate why the allegations in the report should be contested,” Treasury Director-General Duncan Pieterse said.

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