NHLS CEO and CFO fired after two years on suspension

More than two years after being suspended, the National Health Laboratory Service’s Chief Executive Officer and Chief Financial Officer were fired for fraud and corruption with a final ruling from a disciplinary hearing recommending that they should not be employed in future senior jobs involving money matters and that legal proceedings be instituted to recover the money.

Former CEO Joyce Mogale and CFO Sikhumbuzo Zulu have been on suspension since February 2017 with NHLS Board Chair Professor Eric Buch accusing the two of orchestrating a disciplinary process “marred by a series of delay tactics and legal technicalities”.

Mogale and Zulu were charged with irregularities and failure to fulfill their duties in relation to three procurements, totaling approximately R200-million. The charges related to “exceeding delegations of authority, irregular payments made to service providers and irregular appointment of service providers”. However, Spotlight understands that parallel investigations by the Special Investigating Unit may uncover fraud and corruption totaling closer to R1-billion.

Chair of the disciplinary hearing Advocate Nazeer Cassim said in his judgement: “In the circumstances of this case, it suffices for summary dismissal. They breached the trust vested in them by their employer. They acted contrary to their duty of good faith, contravened the law and the employer’s Supply Chain Management Policy. They plunged their employer in serious financial prejudice. No employer can be expected to put up with their conduct”.

Yesterday’s ruling comes less than two months after President Cyril Ramaphosa instructed the Special Investigating Unit to look at multiple allegations of maladministration, improper or unlawful conduct and intentional or negligent loss of public money at the NHLS.

Although the President did not say so, it is known that all of this happened on Mogale’s watch and could involve irregular expenditure of close to a staggering R1-billion.

The SIU is investigating a number of suspicious transactions among others the leasing of motor vehicles worth millions from the controversial company Afrirent Fleet Management (a company that made suspicious payments to a Julius Malema-linked company), various renovations and additions to buildings that were not priorities as well as IT contracts.

It is understood that Mogale personally signed off on a number of contracts and jobs that were all, on paper at least, just under the R10-million threshold that would require for the job to go out to tender. There are also claims from well-placed sources that in some cases the quoted price for services were hugely inflated once the contract had been awarded.

Ramaphosa specifically directed the SIU to investigate the following contracts (where the information is readily available Spotlight has placed in brackets who the contract was awarded to – it is understood that a company called Bonganala was awarded a number of construction related contracts):

• the provision of end user computer hardware and related maintenance and support services for a period of three years in terms of Tender RFB 027/15-16 – (Blue Future);
  • the provision of a multi-protocol label switching wide area network (MPLS WAN) service to the NHLS for a period of three years in terms of Tender RFB 030/15-16 (DV8 Consulting);
  • the leasing of motor vehicles for the NHLS for a period of five  years in terms of Tender RFP 001/15-16 (Afrirent)
  • the replacement of water, sewer and drainage pipes in terms of Tender RFP1455602;
  • the  renovation of the library at the National Insitute of Occupational  Health in Braamfontein in  terms of Tender RFQ 1438906;
  • the renovation of the virology laboratory at Charlotte Maxeke Academic Hospital in terms of Tender RFQ 1481824;
  • the renovation of toilets at the National Institute for Communicable Diseases in terms of Tender RFQ 0695750;
  • professional services for the construction of a refectory at the National Institute for Communicable Diseases in terms of Tender RFQ 1409815;
  • professional services  for  the design,  project  management  and the certification of renovations and structural changes to the Ermelo Laboratory in terms of Tender RFQ 706002;
  • the replacement of the waterproofing at the Centre for Enteric Diseases in terms of Tender RFQ 0961241;
  • the renovation of the Centre for Respiratory Diseases and Meningitis in terms of Tender RFQ 1486702;
  • professional  services  for the design,  project  management  and the certification of renovations and structural changes to the Diagnostic Media Products Building in terms of Tender RFQ 1351823; and
  • construction of a kitchen and function area in terms of Tender RFB031/16-17, which was re-advertised as Tender RFB062/15- 16.