🔒 Joining the dots from Covid-19 PPE scandal to Ramaphosa spokesperson Khusela Diko

The intricate web of lies, false representation and growing case load of corrupt Covid-19 tender awards is encroaching on President Cyril Ramaphosa’s office. Court documents obtained by The Sunday Times reveal that Thandisizwe Madzikane Diko, the husband of President Cyril Ramaphosa’s spokesperson Khusela Diko, who is on special leave, created a proxy company to win contracts from the state. The Special Investigating Unit (SIU) filed the court papers recently and stated Diko had founded Ledla Structural Development to bid for lucrative tenders for Personal Protective Equipment from the Gauteng Health Department. The SIU confirmed the existence of the court documents but would not give any further comment on the investigation. – Bernice Maune

Proxy company setup by Diko scored 800% profit off corrupt PPE tender deal

By Bernice Maune

The 125m in contracts awarded to Thandisizwe Diko’s company Royal Bhaca have been deemed unlawful and irregular by the Special Investigating Unit. According to Asashanduki Rabali, the SIU lead investigator and prosecutor, a smokescreen was used by Diko to secure the funding which was meant for Covid-19 PPE. This has been revealed in court papers, in the possession of the Sunday Times.

Diko’s Ledla Structural Development company stepped in to finalise bidding for the contract after the media published that Diko was the husband of Khusela, the publication reports. While Royal Bhaca was indeed cancelled from bidding for the contract, Ledla Structural Company allegedly effectively re-applied for the same contract and received R47m for medical equipment and R78m  for hand sanitisers and masks.

The health department had been charged almost 10 times Mediwaste’s price

The tenders were signed off by Thandy Pino, chief director of supply chain management at the Gauteng Health Department, says the newspaper. It has also been discovered that:

  • Gauteng health chief financial officer Kabelo Lehloenya allegedly intentionally sought out Royal Bhaca to bid for the tender and told officials to help them become compliant so they could secure it.
  • Gauteng health MEC Bandile Masuku, a friend to Diko, was reportedy pivotal in arranging the contracts and ensuring Diko won the bid.
  • The mark-ups on the PPE included the purchasing of a million medical disposal bags from a supplier for 75c each and re-selling these to the health department for R7 each. This led to a profit of R6,25m for Royal Bhaca resulting in them closing in on 800% in profit.

    “Royal Bhaca, therefore, stood to make a profit of R6,25m (R7m paid to it by GDH less the R750,000 Royal Bhaca had to pay Mediwaste). For Royal Bhaca, this represents a profit of about 800%.” The health department had been charged almost 10 times Mediwaste’s price. The price charged by Mediwaste “no doubt already included a normal, reasonable profit margin. To charge the provincial government R7 a bag is clearly extortionate,” Rabali is quoted as saying, in the court papers.

  • Lehloenya told a warehouse manager to register the PPE as a donation instead of listing them as paid for. This is understood to be a clear attempt to disguise the source of funds which was the department of health.

Approached by BizNews for details, Kaizer Kganyago, spokesperson for the SIU, said they had noted the reports but could not comment on the investigation as it was still ongoing.

Meanwhile, President Cyril Ramaphosa has written a letter to the ANC, addressing corruption and its effect on the organisation, the poor and society.

“Our lack of discipline and failure to deal with the issues in our movement have eroded our organisational ethos and standing. Over many years, we have seen corruption in the state, in society and in the ANC take several forms.

“Perhaps the best-known form of corruption is the award of tenders and other contracts to certain companies based on conflictual relations such as friendships or family connections. For these people, success depends on who you know in the public service. Sometimes those awarding the tenders receive kickbacks from the successful companies.

“Then there are ‘jobs for pals’, where politicians and officials disregard hiring procedures to employ family members, friends or associates. Not only is this grossly unfair to other prospective candidates, but it often means that the people employed are simply not up to the task. Public services are not rendered, public institutions are poorly managed and public funds go to waste,” said Ramaphosa.

Read also: Covid-19 just makes the corruption pot bigger, activist says

SIU head Advocate Andy Mothibi told BizNews in a webinar with broadcaster Tim Modise that Covid-19 fraud-related cases were being assessed.

“We do have allegations from almost all of the provinces. We’ve got teams on the ground as we speak now. Those teams have collected documentation. They are looking and assessing all of those complex cases,” said Mothibi.

On Thursday last week, the SIU said it had frozen the accounts of 36 companies that had received cash for Covid-19 related projects. However, Diko told The Sowetan he still had access to his funds and had not been officially charged.

“There is no freezing of the Royal Bhaca account. We were not among the companies were in the special investigative tribunal, therefore there could not be any order to that effect. I would comment if it was a situation that they are intending to freeze it, but even if that is the case, no authority could just freeze the account.

“I am not aware of any charges formulated or pressed against Royal Bhaca Projects. If there were any I should as the sole director been made aware. I am not facing any charges. I am not saying that they won’t press any charges if they so wish in future, but there are no charges I know now,” said Diko.

Meanwhile, the controversial self-proclaimed King of the amaBhaca people in the Eastern Cape has drawn the ire of the Cooperative Governance and Traditional Affairs. Mamkeli Ngam, spokesperson for Cogta told SA FM in an interview there is no kingdom in that part of the Eastern Cape.

“There is no king. What we have in our records is that Thandisizwe is a recognised chief for the Elubhacweni area… and that he is reigning over two villages in that area.

There is a difference between a king and a chief; a king is a super person, a chief is junior to the king. In this particular case, Thandisizwe is recognised as a chief in that area; he is not a king.”