About R40m frozen in bank accounts of firms linked to PPE scandal

A Special Investigating Unit (SIU) tribunal has granted an urgent order freezing nearly R40m in the bank accounts of 40 companies in Gauteng involved in supplying personal protective equipment (PPE) during the coronavirus pandemic.

The accounts include those belonging to Ledla Structural Development, Royal Bhaca Projects and Mediwaste.

The SIU’s special tribunal’s spokesperson, Selby Makgotho, said Judge Billy Mothle had granted an order on Thursday to freeze R38.7m held in the company accounts.

“In the papers before the special tribunal, Ledla Structural Development was awarded a contract by the Gauteng department of health for the supply of Covid-19 items, which the SIU contends was unlawfully, irregularly and corruptly awarded, and at prices which were grossly inflated way in excess of market-related prices.”

Makgotho said the contract was awarded on April 6.

“Ledla Structural Development subsequently transferred a large portion of the proceeds it received into various banking accounts belonging to entities and individuals, which funds, the SIU contends in court papers, are liable to be forfeited to the state.”

The Sunday Times reported at the weekend that bank accounts containing millions allegedly obtained fraudulently from the Gauteng health department by three companies accused of inflating the prices of goods meant to fight Covid-19, had been frozen.

According to IOL, the provincial department of health allegedly paid Royal Bhaca Projects at least R80m for its personal protective equipment (PPE) services.

Royal Bhaca Projects is owned by Thandisizwe Diko, who is married to President Cyril Ramaphosa's spokesperson, Khusela Diko.

Khusela Diko is on special leave while the investigation is under way.

Mothle further ordered that the pension of the former CFO of the department of health, Kabelo Lehloenya, be frozen. Authorities have identified Lehloenya as having allegedly signed off irregular PPE contracts worth more than R2bn.

“The special tribunal held that civil recovery proceedings against Lehloenya be instituted within 15 days of the granting of the order for recovery of financial damages suffered by the department resulting from actions of illegality, misconduct and acts of dishonesty.”

Makgotho said in terms of the order, the respondents had until October 6 to show cause why it should not be made final.