The contract was flagged as a possible irregular expenditure in the first week of March 2024 and confirmed as irregular in May.
Vusimuzi ‘Cat’ Matlala has reluctantly explained how his company, Medicare24 Tshwane District, was awarded the R360 million South African Police Service (Saps) health services contract.
Matlala appeared before Parliament’s ad hoc committee on Wednesday, which has now moved to the Kgosi Mampuru Correctional Centre in Pretoria.
While the contract was advertised for R360 million, R600 million was available in the Saps budget, according to a News24 report.
On Tuesday, Saps chief financial officer (CFO), Lieutenant-General Puleng Dimpane, told the committee that the contract was flagged as a possible irregular expenditure in the first week of March 2024 and confirmed as irregular in May.
R466 million was disclosed as irregular expenditure. A few invoices remain in the system for this tender; however, Dimpane has instructed her team to stop the payments.
Cat Matlala’s businesses
After matric, Matlala ventured into “informal business”, buying and selling goods. In 2001, he was arrested for buying “stuff which was illegal” and sentenced to four years in prison. The sentence was converted to a correctional supervision.
In 2017, he formally registered his first business, which is a security business. Matlala provided security services to the late Pretoria taxi boss Jothan ‘Mswazi’ Msibi’s farm.
He met Deputy National Police Commissioner Shadrack Sibiya at Msibi’s farm, where Sibiya was a “regular”.
He then ventured into the healthcare business in 2018.
The idea of Medicare24 Tshwane District came through Mike van Wyk, who lives on the same estate as him.
Matlala then went on to rent a hospital on the Saps training academy in Pretoria West in December 2023, months before securing the tender in June 2024.
He told the committee the timing of the two events was coincidental. He saw a business opportunity to service the police trainees and took it.
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“That hospital, I’ve been trying to secure the lease for, I think, for the past three years. So when they say, you know, you are about to get a tender, for me, that does not add up. I can remember that my first engagement with Public Works was somewhere around 2021. And that was far from the tender being even advertised,” said Matlala.
“So, I just learned that the students who are being trained by the college sometimes get injuries, or even when they seek help, they have to go to the nearest hospital, which is outside the premises of Saps. So I wanted to use that hospital as an opportunity for them to render the services to them.”
Medicare24 Tshwane District
The deal between Matlala and Van Wyk is between a franchisor and its franchisee, with Van Wyk owning Medicare24 Holdings.
The agreement was that Matlala would register his company under Medicare24 Holdings and pay a management fee to the company on every contract secured by Medicare24 Tshwane District.
ALSO READ: Saps CFO describes Cat Matlala contract as an ’embarrassment’
On why Van Wyk approached Matlala, he explained: “He first asked me, what do I do for a living? And I told him that, besides the security thing, I do RFQs, meaning I supply medical equipment to hospitals. So then, when I mentioned the hospitals, maybe that’s when I got his attention, because he’s also into healthcare. Then he told me we want to send proposals to manage the clinics in the townships.
“But since you are black and maybe you can have a much more advantage than us, so why don’t you register the company for yourself? And then you get the business, we handle the management, and then you can take the rest.”
Fronting?
Evidence leader Advocate Norman Arendse said it sounded like Van Wyk wanted Matlala to front for him.
“No, that’s not the deal. What I believe is that if someone is in fronting, I don’t think he will be 100% in charge of their finances. It’s a genuine business,” Matlala responded.
Matlala explained that bidding for the Saps contract under the banner of Medicare24 Holdings provided the necessary track record.
Although it was his company that bid for the contract, he submitted documentation showing he was a franchisee and that Medicare24 Holdings would do the actual work.
He said the Saps contract was the first for his company.
“I was bidding for a contract there, and then it was just the Saps contract that I was lucky with,” he explained.
He resigned from the company as a director in December 2024. However, he failed to inform the Saps of this fact and said it was an “oversight”.
He “learned later” that he should have informed Saps.
The contract has been terminated.
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