Telecommunications giant MTN has been dealt a setback in its legal battle concerning the procurement of mobile devices for COVID-19 screenings in Limpopo. The company’s attempt to dismiss a case brought by the Special Investigating Unit (SIU) has been rejected by the Special Tribunal.
The SIU initiated an investigation into the Limpopo Department of Health’s handling of a proposal from MTN to supply 10,000 cellphone devices for COVID-19 mass screenings. According to the SIU, MTN’s unsolicited proposal resulted in the department spending R10 million, which allegedly circumvented the rules of the Public Finance Management Act. Despite this, the department accepted MTN’s offer and received the devices.
The SIU’s findings suggest that the former head of the department, Dr Thokozani Florence Mhlongo, approved the procurement and payment, which they claim led to wasteful expenditure. Out of the 10,000 cellphones procured, only 388 were distributed without the required screening application.
In response to these allegations, MTN South Africa confirmed it submitted the proposal to the Department of Health, which was accepted in April 2020. MTN delivered the devices as agreed upon, and payment was made by the department accordingly.
The SIU has taken legal action to review and nullify the contract, seeking to recover financial losses suffered by the department. They have also halted Dr Mhlongo’s pension payout following her resignation amidst disciplinary proceedings.
MTN contested the SIU’s claims in the Special Tribunal, arguing that the summons did not adequately state a legal basis against them. However, their exception application was dismissed. MTN now plans to respond to the summons on its merits, preparing its defense against allegations of wrongful conduct.
The SIU, empowered by the Special Investigating Units and Special Tribunals Act, continues to refer evidence of criminal conduct to the National Prosecuting Authority as part of its mandate to combat corruption, fraud, and maladministration.
The case underscores ongoing scrutiny of public procurement processes and highlights the legal complexities facing both private companies and government entities in such matters.
