Financial Mail and Business Day

SIU win is a blow to Mkhize’s ambitions

Thando Maeko Political Writer

Former health minister Zweli Mkhize’s bid to clear his name ahead of the ANC’s elective conference in December has been dealt a blow by a court order that the state can immediately recoup R150m spent on a dodgy contract his office awarded to his close associates.

On Wednesday, the Special Investigating Unit (SIU) was granted an order by the Special Tribunal, a civil court set up to recover public funds siphoned from the fiscus through corruption, fraud and illicit money flows, to recoup funds from All Out Trading, Tusokuhle Farming, Cedar Falls Property, Sirela Trading and Sithokozile Khaliphile Mkhize.

The judgment comes days after Mkhize scored a small victory when the parliamentary ethics committee cleared him of any wrongdoing.

It said he could not be held liable for his adult son allegedly benefiting from the contract, which was awarded to Digital Vibes to manage communications around National Health Insurance, a contract that was later extended to its Covid-19 communications campaign.

But it is a setback for Mkhize’s efforts to restore his political credibility, as some branches in his home province of KwaZulu-Natal gave him public support to run for a top six position at the ANC’s leadership contest in December.

Mkhize, who resigned last year as health minister in the wake of the scandal, has not explicitly stated in public if he will run for a leadership post. However, various ANC branches in KwaZulu-Natal, including KwaXimba in eThekwini, have endorsed him as a contender to lead the party and to take over from Cyril Ramaphosa when his term ends in December.

Business Day previously

reported that corruption accused Zandile Gumede, who was recently elected as chair of the influential eThekwini region, had thrown her weight behind Mkhize to unseat Ramaphosa as president of the ANC.

Mkhize has taken the SIU report, which implicates him and other health department officials, on review to set aside the findings and the report’s recommendations.

The SIU report concludes there was a “distinct lack of oversight” on Mkhize’s part.

“The SIU is of the view that the beneficiaries of Digital Vibes money have no right to retain the proceeds of the Covid-19 contract. The SIU seeks orders from the Special Tribunal against the Digital Vibes beneficiaries for the repayment of the proceeds,” said SIU spokesperson Kaizer Kganyago.

The former health minister declined to comment.

In its application to have six companies joined to its main application, the SIU described a web of payments from the department to Digital Vibes, and then eventually to the companies linked to the Mkhize family.

The SIU has been granted permission to recover funds from the companies. Azwakele Trading and Projects was not joined in the review application. Tusokuhle and Sirela are allegedly linked to Mkhize’s son Dedani, while Cedar Falls was allegedly linked to Mkhize’s wife, May Mkhize.

The SIU says Mkhize’s family received more than R10m from the Digital Vibes contract, including a R1.8m payment to state-owned entity Ithala Development Finance Corporation and to Cedar Falls Properties, through Sirela Trading, to finance a farm. May Mkhize is one of the directors of Cedar Falls, according to the SIU.

She contends the amount Sirela paid to Ithala was disbursed in the ordinary course of business, and repayment to the SIU by Mateta, owned by a Mkhize family associate, absolves Cedar from responsibility. Cedar Falls, Tusokuhle and Sirela argued during the hearing last month that they should not be held liable for the health department’s losses stemming from the Digital Vibes contract because they were not involved with the government, but were transacting only with Digital Vibes.

R10m

how much the Special Investigating Unit says Zweli Mkhize’s family received from the Digital Vibes contract

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2022-04-14T07:00:00.0000000Z

2022-04-14T07:00:00.0000000Z

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