The Special Tribunal has ordered businessman Hamilton Ndlovu and his companies to pay back at least R158 million in monies gained from unlawful and irregular personal protective equipment (PPE) tenders.
Ndlovu benefitted at least R172 million from some 19 National Health Laboratory Service (NHLS) PPE tenders.
Ndlovu’s properties and a trust account to the value of R42 million and a further R60 million in assets were already frozen last year, and will be handed over the State or sold to make up some of the R158 million.
The specialised court handed down judgment on Tuesday afternoon following an application by the Special Investigating Unit (SIU) and the NHLS to have those tenders set aside.
In handing down the order, President of the Special Tribunal, Judge Lebogang Modiba, also instructed that Ndlovu be blacklisted from doing business with government.
“Abuse of the public procurement system can only be effectively abated when the infracting parties are restricted from trading with the State. On the basis of the findings made against Hamilton Ndlovu [and] the companies he represents… the NHLS is urged to invoke section 15 of the Preferential Procurement Policy Framework Act and list these entities, their directors and shareholders on the database of restricted suppliers,” Modiba said.
Ndlovu has also been ordered to pay the legal costs of the SIU and the NHLS.
“The applicants should not be out of pocket as a result of the legal costs they incurred to preserve assets and to recover the losses to the State, as a result of the impugned transactions and payment.
“Given the abuse of corporate entities, tender fronting and fraud that has taken place, a punitive costs order is warranted against Hamilton Ndlovu and the companies he represents. He masterminded the fraudulent procurement scheme and [channelled] funds deriving from the impugned payments through these companies,” Modiba said.
Special Investigating Unit (SIU) spokesperson, Kaizer Kganyago, said the corruption-busting unit welcomed the sentence, following an intense investigation into the allegations of corruption against Ndlovu.
“[Ndlovu] was the controlling mind of all the front companies, and the direct and indirect beneficiary of the funds flowing to them from the payments made by the NHLS.
“The links and interrelationships between the front companies and the fact that they were all controlled by Mr. Ndlovu were not disclosed to the NHLS. The companies operated jointly as part of an unlawful scheme directed by Mr. Ndlovu and under the pretence that they were independent entities.
“Instead of operating at arm’s length and in competition with each other to supply PPE to the NHLS at the best available prices, the companies were a front whereby Mr. Ndlovu could obtain multiple contracts from the NHLS at excessive prices without revealing his involvement in each of them,” Kganyago said.