THE Special Investigating Unit (SIU) wants to recover R33.4m million paid to the Cuban government by the Department of Defence for the procurement of Interferon alfa-2b drug during the outbreak of the Covid-19 pandemic five years ago.
Briefing the standing committee on public accounts yesterday, SIU chief operating officer Leonard Lekgetho said an allegation was made during an investigation into Personal Protective Equipment (PPE) that the department procured 930 units of drugs the Interferon alfa-2b drug and paid R217m to Cuba.
The drug was to be used as an immune booster for soldiers during the Covid-19 pandemic.
The SIU probed the unlawful and improper conduct of all officials that were involved in the procurement of the drug supplied in April 2020.
Lekgetho said the department’s Military Command Council (MCC) approved the acquisition of the drug using the defence cooperation agreement signed between South Africa and Cuba.
“We found that the signing of 10 agreements was signed after the delivery of medicine was finalised,” he said.
The first assignment of the Cuban drug was for delivery of 130 vials and the department paid R33.4 million while the second and third consignments were never paid for by the defence.
“The department did not procure Interferons from Cuba by means of bidding process. The MCC exercised a power they did not have when they approved the procurement,” Lekgetho said.
In the Department of Defence, the Secretary of Defence is the accounting officer and all procurement needs to be signed by the accounting officer.
“In this instance, the procurement was not signed by the accounting officer.”
He added that the Interferon alfa-2b was not approved by the South African Health Products Regulating Authority (SAHPRA) to be imported and used in the country when it was brought.
“The department did not have funds in its budget allocated for the acquisition of the Interferons and the drugs were never used by Department of Defence. They were returned to Cuba following a court order on application by SAHPRA.”
The SIU found that only 15 vials imported from Cuba were used as 10 were administered on a patient at 1 Military Hospital and five others by SAHPRA in order to do the testing.
Lekgetho said the department did not recover the payment made to Cuba for drug that was returned back after SAHPRA found them not fit for purpose, a move that resulted in the payment to be fruitless and wasteful expenditure.
He said the SIU was preparing a referral to disciple the official that caused the irregular expenditure.
The SIU did not find any evidence of criminal conduct or money make way to members of the Defence Department or any other person.
However, the corruption-busting body is in the process of referring to the Special Tribunal the setting aside the Interferon contract and also recover the payment made to Techno Import on behalf of Cuba.
“We are in the process of going to court in order to cancel that contract to the value of R217m entered into by the Department of Defence with Cuba, and also to institute civil proceeding in order to recover the R33.4m, which was paid for that medicine because the medicine was never used and it was found by SAPHA not fit for purpose.”
Meanwhile, the SIU has made damning findings in the investigation into the procurement of PPE in the Department of Defence after allegation were made that there regular supply chain management processed were not followed, and there was collusion identified with members of the adjudication committee.
“We found excessive pricing charged to the Defence in terms of PPE which was approved and we also found collusion between members of SANDF and service providers.
“We can confirm today some of them bought vehicles, some received money through cash-send. There is a lot that happened to members involved in adjudicating this contract,” he said.
Lekgetho said they also found money laundering attempts.
“We have done financial analysis and we are in the process of assisting the DPCI in the criminal matter so that people involved are charged.”
He said the SIU has made 33 referrals to the NPA and Asset Forfeiture Unit, one disciplinary action referral and two administrative action referrals to the Competition Commission for price fixing.