A court has ruled that Tepa Trading must repay R4.7 million earned from an irregular Mpumalanga PPE deal during the Covid-19 pandemic.
The Special Tribunal has ordered a company to repay R4.7 million in profits from an unconstitutional Mpumalanga personal protective equipment (PPE) contract, after an investigation exposed irregularities in mask procurement.
The Special Investigating Unit (SIU) revealed it secured a court order to recover profits from a R4.73 million PPE contract. The Mpumalanga Department of Health unlawfully awarded the contract to Tepa Trading and Projects (Pty) Ltd.
The judgment reviewed and set aside the department’s April 2020 decision to appoint Tepa Trading.
Tepa Trading to repay R4.7m in profits
The department appointed the company to supply and deliver 222 000 three-ply masks worth R4.72 million under a request for quotation dated 3 April.
“The decision of the Department appointing Tepa Trading for the supply and delivery of 220 000 three-ply masks to the value of R4 720 000 under the request for quotation dated 3 April 2020 with reference COVID1901/2020 in Mpumalanga province is declared unconstitutional, unlawful and invalid,” Judge Brian Mashile of the Mpumalanga Division of the High Court said in the Special Tribunal’s 30 October judgment.
“Tepa Trading is ordered to disgorge the profits enjoyed directly or indirectly by it, and to that end, it must, within 30 days of this order, submit a detailed statement, supported by all relevant documentation, of all income received and expenditure made in respect of its appointment, performance and payment as a service provider by the department, to determine the profits derived by it.”
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The SIU’s investigation revealed that the department did not follow a fair and transparent procurement process. It also found the process was not equal, competitive, or cost-effective.
The Tribunal concluded that there were numerous irregularities in the procurement process. An official who lacked the required financial authority illegally approved the contract.
“To claw back the public funds, the Special Tribunal has ordered Tepa Trading to file a detailed, audited statement of account with the Tribunal within 30 days,” SIU spokesperson Kaizer Kganyago said on Thursday.
Judgment important for SIU’s efforts to recover misappropriated funds
Kganyago added that the statement must outline all income and expenditure related to the contract. Investigators will use this information to determine the exact profit to recover.
The Tribunal also ordered Tepa Trading to pay the SIU’s legal costs.
Kganyago said the judgment is an important outcome of the SIU’s ongoing efforts. He said it shows the unit’s commitment to recovering public funds misappropriated during the Covid-19 national state of disaster.
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“It sends a clear message that suppliers who fail to meet essential legal requirements have no entitlement to profit from the state, and the SIU will use its litigation powers to the fullest to ensure such funds are returned,” he said.
