Coordinated syndicates allegedly bypassed the National Treasury’s Central Supplier Database (CSD) in an elaborate scheme that saw R2 billion siphoned from Tembisa Hospital.
This is according to the Special Investigating Unit’s (SIU's) interim report on the public health facility.
In a statement yesterday, the SIU revealed there is a “devastating plunder of the public purse, which we found in our probe into Tembisa Hospital, uncovering three coordinated syndicates responsible for the looting of over R2 billion".
“This staggering sum, intended for the provision of healthcare to the most vulnerable, was instead ruthlessly siphoned off through a complex web of fraud and corruption, representing an egregious betrayal of the nation’s trust.”
The CSD, an online platform managed by South Africa’s National Treasury, serves as the single source of key supplier information for all government institutions, state-owned entities and municipalities.
Suppliers – including individuals, small businesses and large corporations – must register on the CSD to qualify for government procurement opportunities.
The platform was designed to help curb corruption by making procurement more transparent, centralised and verifiable.
Massive procurement fraud
According to the SIU, analysis of 2 207 procurement bundles revealed serious maladministration and procurement fraud.
Key officials from the Gauteng Department of Health (GDOH) and Tembisa Hospital are accused of benefiting from corrupt payments that facilitated irregular appointments of service providers, including money-laundering, fronting and use of false supply chain management documentation.
The investigation currently involves 207 service providers that traded with Tembisa Hospital under 4 501 purchase orders (POs), each purportedly linked to a three-quote procurement process. The total value of matters under investigation is R2 043 293 404.10.
The SIU notes a clear pattern of corruption by officials and service providers, which significantly undermined the intended purpose of allocated funds.
A sound procurement process normally includes a purchase request form, fair vendor selection and adherence to CSD guidelines.
However, the SIU found these protocols were circumvented, allowing irregularities and concealment of supplier identities.
The findings reveal severe breaches of trust and authority, including fronting and syndicated activities.
According to the SIU, the standard request for quotation (RFQ) process begins with a purchase request form (RLS01), detailing the available budget, required items and estimated unit prices, and signed by the end-user and authorised by the CEO of Tembisa Hospital.
The form is then submitted to the supply chain management section, which distributes RFQs, evaluates responses, adjudicates and makes recommendations for service providers.
Normally, RFQs are sent to suppliers selected from the CSD; however, at Tembisa Hospital, RFQs were sometimes sent to suppliers not registered on the CSD, or chosen without a fair and transparent selection process.
“It must be highlighted that none of these transactions resulted in goods being delivered to Tembisa Hospital. All money went from the hospital to fronts or conduits, and then to beneficiaries and then to purchasing assets. It is all smoke and mirrors. The hospital derived no value for money,” says the SIU.
The investigation also identified links between winning and unsuccessful bidders through electronic transfers, shared directorships and collusion among family members.
To date, the SIU has traced payments totalling R1 113 270 made by or on behalf of successful bidders to unsuccessful bidders that purportedly competed for specific RFQs.
The SIU has referred four matters to the National Prosecuting Authority (NPA) involving corruption by GDOH or Tembisa Hospital officials and implicated service providers, with R42 233 938.61 paid to officials.
Its civil litigation team will pursue legal action to recover misappropriated funds and freeze assets, which will be forfeited to the state and returned to the Department of Health. The investigation is expected to conclude by November 2027.
Grave concern
Meanwhile, chairperson of the portfolio committee on health Dr Sibongiseni Dhlomo expressed grave concern over the findings, noting that the acts of criminality represent a profound breach of public confidence and an unacceptable diversion of healthcare resources from the most vulnerable.
He welcomed the SIU’s ongoing efforts and the referral of matters to the NPA, stating: “Some of these officials supported the syndicates with impunity, and there must be consequences. Such criminality cannot go unpunished.”
Dr Dhlomo added that the committee will engage with the Department of Health and the SIU to monitor progress and ensure accountability is upheld at all levels, restoring public confidence in the healthcare system.
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