Special Investigating Unit Scores High Court Victories Regarding R185 Million SABC Tender

The Special Investigating Unit (SIU) has won two High Court cases regarding the South African Broadcasting Corporation’s R185 million physical security tender. The Court invalidated the interim board’s decision to award the tender to Mafoko Security Patrols Pty Ltd instead of the recommended service provider and dismissed an application by the former interim board to review and nullify an SIU report recommending they be declared delinquent. The SIU welcomed the judgments, stating that they were significant for consequence management and accountability.

What was the outcome of the Special Investigating Unit’s recent High Court victories over the R185 million SABC tender?

The High Court invalidated the decision by the former interim board of the SABC to award a physical security tender worth over R185 million to Mafoko Security Patrols Pty Ltd instead of the recommended service provider. The High Court also denied an application by the former interim board of the SABC to review and nullify an SIU report recommending they be declared delinquent. The SIU welcomes the judgments, stating they were significant for consequence management and the accountability of the Accounting Authority.

High Court Annuls R185 Million Security Tender

The Special Investigating Unit (SIU) welcomes two recent judgments by the High Court of South Africa: Gauteng local division, Johannesburg, related to the awarding of a physical security tender worth over R185 million to the South African Broadcasting Corporation (SABC). The High Court invalidated a decision by the former interim board of the SABC to disregard bid committee recommendations when awarding a contract to Mafoko Security Patrols Pty Ltd instead of the suggested service provider. In a separate decision, the High Court denied an application by the former interim board of the SABC to review and nullify an SIU report recommending they be declared delinquent.

On October 10, 2023, the High Court found that the interim board’s decision to appoint Mafoko Security Patrols for physical security at SABC offices and guarding TV outside broadcasts on June 30, 2017, was invalid. The interim board granted Mafoko a five-year security tender, starting on August 1, 2017, at a total contract price of R185,519,425.61, R2,300,955.43 higher than the proposed amount for Mjayeli Security, which three tender committees recommended to the board. According to the High Court’s ruling, Mafoko Security Patrols must provide an audited statement of expenses incurred while fulfilling its obligations under the tender within 30 days. The SABC must obtain independent audited verification within 60 days, after which the Court will decide the amount of profits Mafoko must reimburse to the SABC or the SIU.

High Court Dismisses Application to Review SIU Report

The High Court also rejected an application by former interim SABC board members Khanyisile Kweyama, Mathatha Tsedu, Febe Potgieter-Gqubule, and John Matisohn, who sought to review and overturn remedial actions in the SIU report. The report focused on the investigation into the procurement of goods and services for the SABC from Mafoko Security Patrols. The SIU investigation concluded that the interim board improperly awarded the security contract to Mafoko Security Services, and its actions were wrongful and irregular. The SIU asserted that the interim board should have considered initiating an investigation, canceling the tender, or submitting it for reconsideration, but failed to fulfill their fiduciary duties in this regard and did not act in the best interests of the SABC.

The interim board members contended that the SIU report was irrational, its investigation was unconstitutional and violated the principle of legality, and that the SIU exceeded the scope of the President’s Proclamation. They also claimed that the SIU acted irrationally and procedurally unfairly, overstepping its powers in reaching the findings. However, the High Court dismissed the application and ruled that the SIU had acted in compliance with the Proclamation by the President, which included investigating maladministration.

SIU’s Broad Powers and Consequence Management

In dismissing the application, Judge D. Dosio noted that the schedule of the Proclamation granted the SIU extensive powers. President Cyril Ramaphosa authorized the SIU through Proclamation R19 of 2018 to investigate the procurement of goods, works, or services by or on behalf of the SABC from Mafoko and recover any financial losses incurred by the State or SABC.

The High Court’s judgments, a product of the ongoing implementation of SIU investigation outcomes and consequence management, aim to prevent and recover financial losses suffered by the State due to corruption or negligence. In welcoming the judgments, SIU Head Adv. Andy Mothibi stated the rulings were significant for consequence management and the accountability of the Accounting Authority (Board of Directors). He also stressed that all individuals responsible for causing losses to State Institutions should be held accountable, regardless of their position within the State Institutions, and that private sector parties and companies should also face responsibility and consequences.

The Special Investigating Units and Special Tribunals Act 74 of 1996 empowers the SIU to file civil action in the Special Tribunal or the High Court to rectify any wrongdoing discovered in its investigation. The SIU refers evidence indicating criminal conduct to the National Prosecuting Authority for further action.

What was the amount of the physical security tender awarded to Mafoko Security Patrols by the interim SABC board?

The interim board of the SABC awarded a physical security tender worth over R185 million to Mafoko Security Patrols Pty Ltd.

Why did the High Court invalidate the interim board’s decision to award the tender to Mafoko Security Patrols?

The High Court invalidated the decision by the former interim board of the SABC to disregard bid committee recommendations when awarding a contract to Mafoko Security Patrols Pty Ltd instead of the suggested service provider.

What was the outcome of the application by the former interim board to review and nullify an SIU report?

The High Court denied an application by the former interim board of the SABC to review and nullify an SIU report recommending they be declared delinquent.

What is the significance of the SIU’s recent High Court victories?

The judgments were significant for consequence management and the accountability of the Accounting Authority (Board of Directors).

What powers does the SIU have?

The SIU has broad powers granted by the President’s Proclamation, including investigating maladministration and recovering financial losses incurred by the State or SABC.

What actions can the SIU take after investigating wrongdoing?

The SIU can file a civil action in the Special Tribunal or the High Court to rectify any wrongdoing discovered in its investigation, and it can refer evidence indicating criminal conduct to the National Prosecuting Authority for further action.

What is the Special Investigating Units and Special Tribunals Act of 1996?

The Special Investigating Units and Special Tribunals Act 74 of 1996 empowers the SIU to investigate and take action against corruption or negligence in State Institutions and the private sector.

What is the deadline for Mafoko Security Patrols to provide an audited statement of expenses?

Mafoko Security Patrols must provide an audited statement of expenses incurred while fulfilling its obligations under the tender within 30 days of the High Court ruling. The SABC must obtain independent audited verification within 60 days, after which the Court will decide the amount of profits Mafoko must reimburse to the SABC or the SIU.