Firm ordered to pay back profits gained under unlawful PPE contract

The Special Tribunal has declared the awarding of a R113m personal protective equipment (PPE) tender to LNG Scientific invalid and unlawful. 

The Centurion-based company had scored the tender from the Gauteng department of health at the height of Covid-19 in 2020. 

In a default judgment handed down last week, the tribunal ordered that the company owned by Letloega Thabiso Lekoana be divested of all profits enjoyed under the invalid contract.

The company was also ordered to submit audited statements within 30 days setting out its income and expenses in relation to the PPE items it delivered to the Gauteng health department pursuant to the impugned contract supported by expert reports.

The Special Investigation Unit (SIU) had been tasked to investigate all questionable PPE tenders that were awarded by the state during Covid-19. The SIU had brought the application before the tribunal. 

According to the SIU, in April 2020 the then department CFO Kabelo Lehloenya took a decision to procure:

• 500,000 N95 masks at R55,50 each;
• 1-million three-ply surgical masks at R18 each; and
• 250,000 boxes of 100 sterile, powder-free surgical gloves at R270 per box.

“An SIU investigation in the affairs of Gauteng health department has found that competitive bidding process was not followed and deviation from this process was not duly approved, and the contracted prices were high.

“Furthermore, the SIU found that LNG was not registered on the government’s Central Supplier Database for the supply of PPE when it was awarded the multimillion-rand contract,” said SIU spokesperson Kaizer Kganyago. 

The company was ordered to pay legal costs for the application while the SIU was ordered to file expert report on the reasonableness of the income and expenses set out in LNG statements.

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