High Court orders Eastern Cape Service Provider to pay back R3 million plus interest earned in irregular contract
The High Court of South Africa: Eastern Cape Division, Grahamstown has ordered Johannes Hermanus Bouwe Smith and three other trustees of the Siegesmund Trust to pay back R3 million earned in a 2014 procurement deal that was deemed to be unlawfully and irregularly awarded.
The order follows an investigation by the Special Investigating Unit (SIU) into the awarding of a R59 365 163.50 tender to an entity named the Siegesmund Trust for the delivery and supply of computers which purported to be Learner Teacher Support Materials by the Eastern Cape Department of Education (EC DOE).
The SIU investigation has revealed that the goods concerned were procured unlawfully and/or irregularly, in contravention of the provisions of the Department’s Supply Chain Management policy, in contravention of section 2(1)(a) and (b)(i) of the Preferential Procurement Policy Framework Act No.5 of 2000, and in contravention of section 217(1) of the Constitution of the Republic of South Africa, 1996.
The SIU investigation had found that the Siegesmund Trust had indeed delivered the resource material. As result, the SIU calculated the profit earned from the procurement contract and demanded it be paid back. The trustees of Siegesmund Trust agreed to pay back R3 million in three instalments plus interest and the agreement was made an order of the High Court on 11 March 2021.
During the course of the payment process, one official misrepresented certain facts to certain officials, resulting in and/or contributing to the irregularities not being detected and/or payment(s) not being prevented. In addition, the SIU uncovered evidence that the DOE official received unauthorised gratification in the form of two laptops and a Samsung S3 cell phone in contravention of the provisions of section 10 the Prevention and Combating of Corrupt Activities Act No. 12 of 2004 (“PACOCA”).
In this regard, the SIU has referred the evidence pointing towards fraud and contravention of PACOCA to the National Prosecuting Authority (NPA). The SIU is working closely with the NPA and South African Police Service on the matter.
Additional results from the SIU’s investigation included the referral of evidence of misconduct in relation to six officials at the EC DOE, referrals to the South African Receiver of Revenue and the State Information Technology Agency.
The SIU is an independent forensic and litigation agency established by the President in terms of the Special Investigating Unit and Special Tribunal Act, Act 74 of 1996, to investigate serious malpractice, corruption, malfeasance and maladministration in relation to the administration of State institutions, State assets and public money as well as any conduct which may seriously harm the interest of the State and the public.
Fraud and corruption allegations may be reported via the following platforms: siu@whistleblowing.co.za / Hotline: 0800 037 774
Enquiries:
Mr Kaizer Kganyago (SIU)
Tel: 012 843 0048
Cell: 082 306 8888
E-mail: kkganyago@siu.org.za
