MTN Loses Tribunal Case Over Disputed R10m Deal with Limpopo Health Department

In a pivotal ruling, the Special Tribunal has dismissed an exception application by MTN, concerning a R10 million contract for mobile phones with the Limpopo Health Department, an incident probed due to allegations of corruption by the Special Investigating Unit (SIU).

The contract, which originated in 2020 amid the COVID-19 pandemic, involved the health department accepting an unsolicited proposal from the telecom titan, MTN, to provide 10,000 cell phones that were intended for virus screening activities. The transaction, however, was later scrutinized and deemed noncompliant with the public finance and procurement protocols.

In the inquiry led by the SIU, it was revealed that the transaction, authorized by the former head of the Limpopo Health Department, Dr. Thokozani Mhlongo, resulted in what could be marked as wasteful expenditure, raising serious concerns over the governance within the department. Moreover, the SIU's investigation uncovered that a staggering number of 9,588 phones were never distributed to the designated users, and the remaining 388 units that were disseminated between September 2020 and March 2021 did not even have the essential screening app installed.

MTN's defense in the tribunal was to separate themselves from any wrongdoing by arguing that their proposal should not be seen as unlawful, and any decision made was ultimately the responsibility of the department which could have rejected their offer. Furthermore, MTN contested that the funds expended should not be classified as fruitless or wasteful since the phones could still serve a purpose.

Despite MTN's arguments, the tribunal's decision, as announced by SIU Spokesperson Kaizer Kganyago, confirmed the telecom company's exception was not valid, thereby holding them accountable for the flawed transaction. This judgment brings to the fore MTN's misstep and the department's lack of diligence in the expenditure of public funds.

In addition to the tribunal's decision against MTN, the SIU has been proactive in mitigating further losses by freezing Dr. Mhlongo's pension following her resignation to preclude disciplinary proceedings.

With procurement fraud and corruption rampant within public departments, this case serves not only as a cautionary tale to corporations engaging in public contracts but also highlights the tenacious efforts of the SIU in upholding the integrity of public finance management and rooting out administrative malfeasance.