COVID-19 PPE Suppliers Ordered To Repay Millions Against Fraudulent Contracts

COVID-19 PPE service providers who unlawfully profited from the global health crisis of 2020 will be forced to reimburse the full value of contracts.

Special Investigating Unit (SIU) has obtained a Special Tribunal order against 16 suppliers that provided overpriced Personal Protective Equipment (PPE) to the KwaZulu-Natal (KZN) Department of Social Development (DSD).

While the SIU and Special Tribunal lack the power to initiate criminal prosecutions, they have confirmed that evidence will be referred to the National Prosecuting Authority (NPA).

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Implicated companies were awarded 18 contracts worth a combined R21.2 million, with investigators finding that prices were deliberately inflated. The SIU also uncovered corruption involving department officials.

“These contracts were issued at the peak of the COVID-19 pandemic. Investigations revealed that all service providers charged excessive rates that exceeded National Treasury guidelines,” the SIU stated on Tuesday.

Disciplinary action has been recommended against several officials, along with a criminal case registration.

However, SIU intervened after an earlier investigation failed to assess financial recoveries or quantify the state’s losses.

“The initial report did not account for the state’s financial losses or attempt to reclaim funds lost due to overpricing or irregular procurement processes,” the SIU explained.

In March 2020, emergency procurement regulations were relaxed to facilitate a swift government response to the pandemic. However, a dedicated COVID-19 Audit Report by the auditor-general cited by Corruption Watch found that these emergency measures were exploited for financial gain.

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Since 2020, the SIU has been investigating 600 companies involved in fraudulent PPE contracts, uncovering widespread fraud, wasteful expenditure, and procurement irregularities.

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