5 officials, 59 companies could pay for EC procurement fraud

The Eastern Cape department of health has referred the cases of five officials who had allegedly manipulated procurement processes at the East London Emergency Services to the National Prosecuting Authority (NPA) for possible prosecution.

In addition, 59 companies could be prosecuted.

Sizwe Kupelo, department spokesperson, said: “Although the internal investigation implicated the officials in fraudulent and corrupt activities the decision to prosecute (lies) with the NPA.”

The officials are among a group of individuals and suppliers who allegedly colluded and defrauded the department of more than R42 million from 2004 to 2011.

This was revealed by a forensic investigation aimed at identifying irregular expenditure, illegal contracts, tax transgressions and recovering funds lost through fraud and corruption.

It was conducted by the Special Investigating Union (SIU), the SA Revenue Service (Sars), and the Asset Forfeiture Unit (AFU).

So far, said Kupelo “the investigation has uncovered that 39 companies that rendered services to the East London Emergency Services between January 2004 and December 2011 were not tax compliant”.

“The department has referred findings on the 39 companies to Sars to be investigated for possible VAT fraud,” he said.

Close to R11 million was paid to these companies over the eight-year period.

Twenty other companies that did business with the department during the period under investigation and which were implicated in fraud and corruption could also be prosecuted, according to Kupelo.

“One company has signed an acknowledgement of debt, and has offered to repay R197 000 to the department,” he said.

Meanwhile, the department has insisted that reports stating it had lost R1.4 billion to fraud and corruption were an attempt to tarnish the name of health MEC Sicelo Gqobana.

Kupelo said: “This gross exaggeration is viewed as a deliberate attempt by mischievous elements outside the department to create chaos and confusion.”

“There is no official report suggesting these allegations which have misled the nation about our efforts and commitment to find graft in the department,” he said.

The department said it was only aware of the R42.8 million lost through alleged corruption.