Legal experts bypassed when tenders awarded

The KwaZulu-Natal Department of Health’s own legal experts had been bypassed for at least two years when it came to the awarding of tenders, the Durban Labour Court heard on Wednesday. Its suspended general manager for legal services, Kantha Padayachee, told the court how her superiors had overlooked her concerns about certain irregularities, including the transfer of a “significantly” large amount of money to an NGO despite there being no valid contract. Padayachee testified that her “strict adherences” to the law had made her unpopular, not only with department officials, but also her staff who she said were irked by her exposing of irregularities relating to the multimillion-rand tender of oxygen and water purification plants.

“I have indicated that there seems to be some kind of plot to discredit my reputation and to also get rid of me,” she said. Padayachee has asked the court to overturn her three-year suspension and interdict the department and its head, Dr Sibongile Zungu, from continuing with disciplinary action against her. She was suspended in February 2010 and charged with seven counts of misconduct, a day after she met a Hawks detective who was investigating the tender. The investigation led to the “Amigos” corruption case involving Uruguayan businessman Gaston Savoi, owner of Intaka Holdings, the company awarded the water purification tender.

In the same case several senior KZN government officials were charged with money laundering, racketeering and fraud. However, the charges against ANC politicians Peggy Nkonyeni and Mike Mabuyakhulu were withdrawn. Padayachee said she had reported to her immediate supervisor, Zungu, about some “highly irregular” processes in the awarding of a tender to a certain NGO as well as a large sum of money that was paid out to an unregistered NGO. “I made recommendations regarding this to the second respondent (Zungu) saying that disciplinary proceedings be instituted against relevant officials and at the time none of my recommendations were acted on,” she said.

Padayachee said not all tender documents were submitted by the NGOs and she discovered that one of them, called Siphilile, was not registered and an instruction had been made for payment to it to be made via another NGO, Isolabantu, that was registered. “This is a highly irregular process,” she said. Padayachee also revealed that the services of accounting firm Ernst & Young had been procured with some irregularities and/or illegally without an engagement letter being signed. She said the firm learnt this during its investigation into Addington Hospital when it had uplifted certain hospital documents. When there were issues regarding payment for services rendered, the firm had withheld those documents, Padayachee testified.

“(Health MEC Dr Sibongiseni) Dhlomo was led to believe that I was the responsible person for holding up the contract with Ernst & Young and he expressed his extreme displeasure at what he believed to be my insubordinate conduct,” she said. Padayachee said Dhlomo had contacted her telephonically and had accused her of hampering service delivery and she tried to advise him of her real concerns regarding procurement processes in the department. When questioned on the charges that she was facing, Padayachee said the department had to ensure that discipline was fair. She said that there were resolutions that govern the conduct of government procedures. “My employer has had no regard or very little regard for those resolutions.”