President Cyril Ramaphosa says the release of the Special Investigating Unit (SIU) report is encouraging as it provides encouragement that unlawful deeds are being uncovered and action is being taken against those who are responsible.
President Ramaphosa said the report released last week by the SIU into procurement during the Coronavirus state of disaster makes for disturbing reading.
“What is most disturbing is that this was not simply a matter of negligence or poor oversight. There was wilful intent to defraud.
“I would like to assure South Africans that the net is closing on those involved in corrupt acts. This includes not just private companies, but also those in the public service who thought they could collude with outside individuals to sell off resources meant for our people,” President Ramaphosa said.
President Ramaphosa said as scores of people became ill and many dying, some people saw an opportunity to cash in.
“They purposefully set out to steal millions in public money, misuse state property and divert resources meant for the South African people into personal pockets.
“Individuals and entities with no experience in the manufacture, supply of distribution of critical medical supplies hastily set up companies. In some instances they were registered on national databases and received purchase orders. In others they weren’t even registered but profited nonetheless,” President Ramaphosa said.
According to the report, some suppliers used different front companies to obtain multiple contracts from the same department.
Personal protective equipment and other supplies were procured at inflated prices, in some cases at mark-ups exceeding 400%. Some products did not meet the necessary specifications.
President Ramaphosa said diversion of resources meant for public benefit came at a direct cost to people’s health and lives.
“That is why all involved in wrongdoing will be dealt with harshly and appropriately. They will not get to enjoy their ill-gotten gains as steps have been taken to recover stolen money including freezing of bank accounts.
“A number of civil litigation cases have been instituted for the return of ill-gotten money. Specific cases have been referred to for prosecution.
“Contracts found to be unlawful have been cancelled. Government entities have been directed not to make payments to the service providers pending the outcome of investigations and or civil proceedings,” President Ramaphosa said.
President Ramaphosa said all this has taught government that every regulatory, legislative and procedural loophole must be closed to ensure there is no point of entry for those who seek to exploit them.
“It is clear that those who have made profits from the COVID-19 disaster, and those who have colluded with government officials, took advantage of the urgency of the moment to disregard National Treasury and provincial treasury instructions.
“This was especially the case in the earliest days of the pandemic when PPEs and other equipment were in short supply.
“It has shown the need for a coordinated approach to fighting corruption that brings in several organs of state,” the President said.
The SIU investigation looked into over 2 500 PPE contracts. While some investigations are ongoing, in many cases the allegations were found to be without substance and the companies were cleared of wrongdoing.