Tembisa Hospital Looted of Over R2 Billion: SIU Report Exposes Deep-Rooted Corruption

A Special Investigating Unit (SIU) interim report has laid bare the extent of the corruption that has plagued Tembisa Hospital, revealing how syndicates bypassed standard tender processes to loot more than R2 billion from the facility. The investigation, triggered by the tragic murder of whistleblower Babita Deokaran, has uncovered a web of collusion between corrupt officials and service providers, all exploiting weaknesses in the procurement system.

Babita Deokaran, an official at the Gauteng Department of Health, was the first to raise the alarm, flagging suspicious payments to over 200 companies, totalling around R850 million at Tembisa Hospital. Her brave actions in exposing large-scale fraud, corruption, and maladministration ultimately cost her life; she was killed in August 2021. The SIU investigation has since revealed that the actual amounts siphoned off exceed R2 billion, highlighting the scale of the looting.

At least 15 current and former employees have been implicated in the scandal, suggesting a deeply entrenched culture of corruption within the hospital. The SIU investigation also detailed how the syndicates deliberately kept the value of purchase orders below R500,000, the threshold for formal tenders. This allowed them to exploit a less stringent three-quote system for procurement, which proved far easier to manipulate.

The report stated that this was intentionally abused to circumvent the tender process and to keep the authorisation level as low as possible. Officials intentionally split the requests for quotations (RFQs) for similar goods and services into smaller contracts to ensure they remained below the R500,000 threshold. The SIU also found that suppliers frequently provided separate invoices for different items, all issued on the same day for the same amounts linked separate purchased orders.

According to the report, “In addition to the service providers ranking in millions, it is the officials on the ground, at the grassroots level, who benefited most financially from the unscrupulous looting at Tembisa Hospital. These officials controlled the supply chain management (SCM) processes, they created a fictitious need, went through a bogus procurement process and fraudulently signed for goods which were, most likely, never delivered.”

The SIU confirmed the existence of major syndicates operating at Tembisa Hospital. "Various service providers formed groups, i.e. syndicates, they colluded with one another, committed acts of fraud and corruption, all to hide the true identities of those who finally benefited from the Tembisa Hospital cash cow, the ultimate Kingpins, private individuals living the high life, spending millions on lavish lifestyles,” the report stated.

The investigation has revealed that suppliers were not sourced from the central supplier database (CSD), nor were they on the required commodity list. There was no rotation of service providers to keep it fair and equitable. Instead, most service providers could be traced back to a small coterie of beneficial owners.

The report explained that “For the exploitation of Tembisa Hospital to succeed, the selection of service providers could not be random; it had to be controlled to ensure that preselected bidders were appointed, which would ultimately benefit the kingpins.”

The SIU also found that the syndicates awarded contracts to front companies that did not legitimately qualify. Investigations showed extensive fraud, including fabricated company documents, tax clearance certificates, and Black Economic Empowerment affidavits.

Many of the goods procured by the hospital qualified as “medical devices” under the Medicines Act, which requires registration and licensing from the South African Health Products Regulatory Authority (SAHPRA). However, none of the service providers were issued with the relevant SAHPRA licences to supply the purported medical devices.

The three main syndicates identified are the Maumela syndicate, the Mazibuko syndicate, and syndicate X. The Maumela syndicate is linked to Hangwani Maumela (the nephew of President Cyril Ramaphosa through a previous marriage) and is associated with R816m in fraudulent contracts at the hospital. The SIU has identified and preserved significant assets, including luxury vehicles and properties, related to this syndicate. Three of the companies awarded contracts under the Maumela Syndicate are linked to Vusimuzi ‘Cat’ Matlala, who was arrested in May and charged with the attempted murder of his former partner, actress Tebogo Thobejane.

The Mazibuko syndicate is linked to Rudolph Mazibuko and is connected to fraudulent transactions worth R283m. The investigation has identified properties in Gauteng and the Western Cape linked to this syndicate. The X syndicate is linked with procurement bundles valued at R596m, with assets worth about R150m identified. The SIU also found a number of smaller, interconnected syndicates that collectively looted millions through a network of corrupt officials and service providers.

Governance expert Professor William Gumede said this shows that corruption is so deep that criminals are taking control of the state. “And they don’t care about providing services. Even Nhlanhla Mkhwanazi (KwaZulu-Natal police commissioner) saw that criminals are taking charge of the State and they are protected by politicians,” he said, adding that more officials could be implicated in the scandal. Gumede added that part of the problem is that procurements has become politicised and only those associated with politicians are awarded contracts.

Professor Zwelinzima Ndevu from the University of Stellenbosch, another expert, said the SIU investigation paints a picture of a public service that is rotten, adding that corruption has become a norm in the departments. He described this as a sad reality 'of our time in South Africa'. “What we see in the reports on Tembisa is a tip of the scale on corruption happening in the country, I think there is more to come,” he said.

The SIU investigation into Tembisa Hospital is ongoing, with the promise of further revelations and potential prosecutions. The report serves as a stark reminder of the devastating impact of corruption on public services and the urgent need for greater accountability and transparency in procurement processes.

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