May 27, 2021

DRAFT MEDIA STATEMENT

FOR IMMEDIATE RELEASE
27 MAY 2021

ORDER GRANTED TO FREEZE OVER R40 MILLION OF SERVICE PROVIDERS

APPOINTED BY GAUTENG EDUCATION DEPARTMENT TO SANITIZE SCHOOLS

The Special Investigating Unit (SIU) has been granted a preservation order to the value of
R40.7 million by the Special Tribunal to freeze bank accounts and assets belonging to 14
service providers. The service providers were contracted by Gauteng Department of
Education to decontaminate schools to the tune of over R431 million.

The SIU approached the Special Tribunal for preservation order to freeze accounts with the
sum of R6 million and assets with an estimated value of over R4.7 million belonging to seven
companies, five individuals and two family trusts. The assets include two Mercedes Benz V
Class, Landrover Range Rover Sport, Haval H6 and Toyota Avanza. The action follows an
investigation into allegations of unlawful procurement of services by the education
department to decontaminate, disinfect, and sanitize schools.

The collaboration with the Financial Intelligence Centre (FIC) is very effective and the FIC
assisted and based on the information presented by the investigating team issued
intervention directions under Section 34 of the FIC Act to place a hold on R30 million of the
funds received from the education department. This after seven service providers began
dissipating the funds received from the department, upon receipt. A portion of the funds
were transferred to multiple beneficiaries who have, in turn, disposed of them.

The order prohibits Fikile Mpofana Pty Ltd, Insimu Projects Pty Ltd, Insimu Consulting Pty
Ltd, Insimu Medical Group, Mangaliso Pty Ltd, Lisondalo Pty Ltd, Zenaldo Consulting Pty

Page 1
Gauteng - Head Office: 74 Watermeyer Street, Rentmeester Building, Meyerspark, Pretoria, 0184
Tel: +27 012 843 0000/1 Fax: +27 12 843 0115 Hotline: 0800 037 774 Website: https://www.siu.org.za E-mail: info@siu.org.za
Ltd, Sigwile Bright Mhlongo, Fikele Eugenia Mpofana, Lindokuhle Bridget Mkhize, Njabulo
Mabaso, Richard Mweli, Shuphula Family Trust, and Madangu Family Trust from dealing
with the funds held in the bank accounts and assets.

The SIU will forthwith launch review proceedings in the Special Tribunal within the next 30
days and also seek an order against the service providers to pay back all profits as
consequence of their appointment.

The SIU investigation has revealed that the procurement process conducted by the Gauteng
Education Department was manifestly unlawful. The Gauteng Department of Education (the
Department) paid over R431 million to service providers pursuant to a process that was hap-
hazard, unfair and littered with procurement irregularities.

The department obtained a deviation under Treasury regulations to conduct the

procurement process without inviting competitive bids. The department did so on the basis
that emergency procurement was warranted, given the urgent and pressing need to appoint
service providers to decontaminate schools exposed to COVID-19. The request for the
deviation expressly stated that the Department would “appoint accredited service providers
from the Central Supplier Database (CSD)”.

The SIU investigation revealed that the department failed to comply with the express
requirement of the deviation. The vast majority of service providers that were appointed (173
out of 280) were not accredited and were not on the CSD. On this basis alone, the SIU will
argue before the Special Tribunal that the procurement process was unlawful and falls to be
reviewed and set aside.

Furthermore, the SIU investigation revealed that the procurement process was not cost-
effective. The service providers were not paid per square meter of the area cleaned. Rather,
a senior official in the department appears to have arbitrarily decided to offer a fee of R250
000 to R270 000 for the decontamination of primary schools; R250 000 to R290 000 for
secondary schools; and R250 000 to R300 000 for district offices. The fees bear no relation
to the work done by service providers or the cost of material used.

Gauteng - Head Office: 74 Watermeyer Street, Rentmeester Building, Meyerspark, Pretoria, 0184
Tel: +27 012 843 0000/1 Fax: +27 12 843 0115 Hotline: 0800 037 774 Website: https://www.siu.org.za E-mail: info@siu.org.za Page 2
The selection and appointment of suppliers was done in a hap-hazard, unfair and inequitable
manner. Ordinarily, the Supply Chain Management (“SCM”) division of the Department
would select and appoint suppliers. In this case, the SIU investigation has revealed that the
SCM division was not involved in the selection and appointment of service providers. Some
of the names of service providers appointed were received via WhatsApp from officials in
the Department. The service providers were appointed without first checking whether they
were accredited or appeared on the CSD, the SIU investigation has revealed.

Though there are legal outcomes, the SIU investigation into the affairs of the education
department are continuing. Evidence pointing to criminal conduct will be referred to the
National Prosecuting Authority (NPA), as well as the Hawks in the South African Police
Service (SAPS) for further action.

Fraud and corruption allegations may be reported via the following platforms:
siu@whistleblowing.co.za / Hotline: 0800 037 774

Enquiries:
Mr Kaizer Kganyago
Special Investigating Unit
012 843 0048
082 306 8888
kkganyago@siu.org.za

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ABOUT THE SIU:

The SIU is an independent statutory body with a primary mandate to investigate allegations
of corruption, malpractice and maladministration in the affairs of government departments,
municipalities and State Owned Entities, and to recover financial losses suffered by State
institutions. The SIU was established in terms of the Special Investigating Units and Special
Tribunal Act, Act No 74 of 1996 (SIU Act).

Gauteng - Head Office: 74 Watermeyer Street, Rentmeester Building, Meyerspark, Pretoria, 0184
Tel: +27 012 843 0000/1 Fax: +27 12 843 0115 Hotline: 0800 037 774 Website: https://www.siu.org.za E-mail: info@siu.org.za Page 3
The SIU has powers to subpoena witnesses, bank statements and cellphone records,
search, seize evidence and interrogate witnesses under oath. The SIU can take civil action
to correct any wrongdoing it uncovers in its investigations.

Where criminal conduct is uncovered during investigations, the SIU will bring the matter to
the attention of its partners Hawks in the South African Police Service (SAPS), as well as
the National Prosecuting Authority (NPA) for further action.

Gauteng - Head Office: 74 Watermeyer Street, Rentmeester Building, Meyerspark, Pretoria, 0184
Tel: +27 012 843 0000/1 Fax: +27 12 843 0115 Hotline: 0800 037 774 Website: https://www.siu.org.za E-mail: info@siu.org.za Page 4