MTN Faces Setback as Special Tribunal Application is Rejected in South Africa

Telecommunications giant MTN has recently faced legal challenges following the dismissal of a Special Tribunal exception application regarding its alleged involvement in the irregular supply of mobile devices intended for COVID-19 screening to the Limpopo Department of Health. This legal development stems from an investigation conducted by the Special Investigating Unit (SIU), which was prompted by concerns over the procurement processes within the department. The SIU’s inquiry revealed that MTN had submitted an unsolicited proposal to provide the department with 10,000 cell phone devices for mass COVID-19 screenings in the province. The financial implications of this proposal were significant, amounting to R10 million, and it was determined that the proposal contravened the provisions of the Public Finance Management Act (PFMA), which governs the financial affairs of government entities.

Despite the apparent irregularities, the Limpopo Department of Health accepted MTN's proposal and proceeded with the delivery of the mobile devices. However, the investigation by the SIU highlighted serious concerns regarding the procurement process. Specifically, it was found that Dr. Thokozani Florence Mhlongo, the former head of the department and its accounting officer, allegedly exposed the department to unnecessary financial risks by authorizing the purchase of the cell phones without adhering to the proper procedures. The procurement was labeled as wasteful expenditure, particularly as the department could only distribute a mere 388 of the 10,000 devices between September 2020 and March 2021. Additionally, these distributed phones were reportedly given out without the required screening application, raising further questions about the validity and efficacy of the procurement.

In response to the findings of its investigation, the SIU has taken decisive legal action by instituting civil proceedings in the Special Tribunal. The objective of this action is twofold: to review and ultimately set aside the contract between MTN and the Limpopo Department of Health and to recover the financial losses that the department incurred as a result of this procurement fiasco. The SIU's commitment to accountability in public spending is evident in its pursuit of justice in this matter.

Moreover, the SIU has successfully interdict the pension payout of Dr. Mhlongo, who resigned from her position amidst the fallout from these allegations and the accompanying disciplinary action. This move underscores the SIU’s proactive approach in ensuring that individuals held responsible for misconduct do not benefit financially from their actions.

The SIU operates under the legal framework provided by the Special Investigating Units and Special Tribunals Act of 1996, which empowers it to initiate civil actions in the High Court or a Special Tribunal to address any misconduct identified during its investigations into corruption, fraud, or maladministration. Furthermore, the SIU is mandated to refer any evidence of criminal conduct uncovered during its inquiries to the National Prosecuting Authority for further legal proceedings.

This case serves as a crucial reminder of the ongoing challenges faced in combating corruption within public sectors and the importance of transparency and accountability in government procurement processes. As investigations like these unfold, they highlight the need for stringent adherence to regulatory frameworks to safeguard public resources and ensure that funds intended for vital public health initiatives are used effectively and ethically. The outcomes of this case could have significant implications for the governance of public contracts and the integrity of procurement processes in South Africa.