Civil litigation launched against companies involved in corruption
FIRM: Gauteng ANC chief whip Brian Hlongwa.
JOHANNESBURG – Civil litigation has been launched against 3P Consulting and the Baoki Consortium, two of the key companies involved in corruption that cost the Gauteng Department of Health R1.2 billion, to prevent the department from having to pay outstanding claims worth billions more to these two companies.
A Special Investigating Unit (SIU) report revealed the civil litigation was aimed at preventing the department from having to pay an alleged outstanding claim of R125 million to 3P Consulting and R800m to the Baoki Consortium, whose members included 3P Consulting, AME Africa Healthcare, Kemsing Services and Amethst.
The report, which was released this week by Section27, Treatment Action Campaign and Corruption Watch, uncovered evidence of various trips provided by 3P Consulting to former Gauteng MEC for Health and current ANC chief whip in the Gauteng provincial legislature Brian Hlongwa and some officials between 2006 and 2009.
It said bribes were paid to Hlongwa and shelf company Ukwakha used by 3P Consulting director Richard Payne.
The SIU has referred criminal proceedings against department officials to the South Gauteng Director of Public Prosecutions alleged corruption by 3P Consulting directors and Baoki Consortium to the relevant prosecuting authorities and the Asset Forfeiture Unit (AFU).
The company, 3P Consulting subsequently went into liquidation and attorneys Brooks & Brand, representing the liquidator, pursued the payment of the R125m claim, which had increased to about R300m with costs and interest.
The SIU provided evidence to assist the State Attorney to submit claims on behalf of the department in the 3P Consulting liquidated estate.
This included evidence of duplicated payments, payments for the compilation of the 2007/2008 budget, to sub contractors to 3P Consulting and payments made in relation to a 5 percent administration fee that 3P Consulting was not entitled to.
A contract worth R779 500 was awarded to 3P Consulting to compile the 2007/2008 budget for the department.
The company also provided false timesheets for work done.
The report said the AFU used this evidence of corruption to obtain a preservation order in terms of which all rights accruing to 3P Consulting in terms of the contract with the department were preserved pending final forfeiture to the state.
“The liquidator of the 3P liquidated estate and PwC, a creditor of 3P who delivered services to the department, are opposing the forfeiture order. The matter is continuing,” it said.
Procurement irregularities and irregular and wasteful expenditure totalling R470.8m was involved in a contract awarded by the department to the Baoki Consortium, 3P Consulting and The Life Channel Africa for the provision of an information system and electronic health records.
In terms of the contract, the department had to pay Baoki set monthly fees even if Baoki did not deliver any services.
Baoki was paid a total of R470 million for the proof of concept, roll out contract and the Gauteng Province Wide Area Network (VSAT) but had an outstanding claim of R800m.
The Baoki contract was cancelled by the department in 2009.
Baoki instituted arbitration proceedings for payment of the R800 million, with the State Attorney defending the matter and claiming the contract was concluded in contravention of the PFMA.
The AFU obtained a preservation order against Baoki’s contractual rights to the value of R800m, together with interest, and a final forfeiture order was obtained.
“Together with interest, this amounted to a saving to the state of approximately R1.5 billion,” the report said.
– BUSINESS REPORT
Source: iol.co.za
