IN THE SPECIAL TRIBUNAL ESTABLISHED IN TERMS OF SECTION 2(1)
OF THE SPECIAL INVESTIGATING UNITS AND SPECIAL TRIBUNALS ACT
74 OF 1996
(REPUBLIC OF SOUTH AFRICA)
HELD VIRTUALLY
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: YES
(3) REVISED: YES
14/09/2026
DATE
In the matter between:
SPECIAL INVESTIGATING UNlT
and
MEMBER OF EXECUTIVE COUNCIL
FOR HEAL TH: GAUTENG PROVINCE
MEMBER OF EXECUTIVE COUNCIL
FOR EDUCATION: GAUTENG PROVINCE
CASE NO: GP06/2025
APPLICANT
FIRST RESPONDE NT
SECOND RESPONDENT
IKA THI HEALTH (PTY) LTD THIRD RESPONDENT
RELEBOGILE JUDY BATHIBANG FOURTH RESPONDENT
KAT LABORATORY AND MEDICAL (PTY) LTD FIFTH RESPONDENT
ADAM DODKINS SIXTH RESPONDENT
DENISHE NADESAN N.O. SEVENTH RESPONDENT
TRACEY HEMPHILL N.O. EIGHTH RESPONDENT
JUDGMENT
Mashile J
Introduction
[l] This is a legality review in which the Applicant, the Special Investigating Unit
("SIU"), seeks to impugn the decision of the First Respondent, the Gauteng Department of
Health ("the Department"), to appoint Ikati Health (Pty) Ltd ("Ikati Health") for the supp ly
of 5 000 infrared non-conta ct digital thermometers ("the Thermometers") pursuant to
Request for Quotation ("RFQ") No. COVID 19/155 T. The SIU seeks an order reviewing
and setting aside that decision, together with an order declaring the resultant contract
unlawful, constitutionally invalid and void ab initio.
[2] As a just and equitable remedy in terms of section 4(1)(c), read with sectio n 8(2),
of the Special Investigating Units and Special Tribunals Act 74 of 1996 ("the SIU Act"),
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an order declaring the ensuing contract between the Department and Ikati Health, including
any approva l of award letter, letter of commitment, purchase order or any other document
claiming to establish an agreement (collective ly, "the impugned contract") , constitutiona lly
invalid. In the alternative, the SIU seeks an order review ing and setting aside the impugned
contract as unlawful, invalid and void ab initio. In addition, the SIU seeks consequential
relief directing Ikati Health, together with the Fifth Respondent , Kat Laboratory and
Medical (Pty) Ltd ("Kat Lab") and any other respondent found to have benefited from the
impugned contract, to repay all profits derived therefrom.
[3] The SIU found the review on seven grounds, which I briefly proceed to set out
below:
3.1 When the Department approved Ikati Health's quotation for the supply of 5
000 thermomet ers, the Head of Department failed to comply with paragraphs
3.4 and 3.5, read together with paragraph 3.1 , of National Treasury
Instruction Note No. 05 of 2020121;
3.2 Paragraph 4.6(c) of the Instruction Note required the Department to procure
Personal Protect ive Equipment ("PPE") from suppliers registered on the
Central Supplier Database ("CSD") and any other database approved by the
National Treasury. lkati Health was not registered on the CSD as a supp lier
of medical supplies or PPE at the relevant time. Accordingly , the Departm ent
was not entitled to invite Ikati Health to respond to the RFQ, and its inclusion
in the procurement process was contrary to the requirements of paragraph
4.6(c) of the Instruction Note;
3.3 In approving lkati Health's quotation for the supply of 5 000 thermometers,
the Department acted in contravention of section 2 of the Preferential
Procurement Policy Framework Act 5 of 2000 ("PPPFA") , regulation 6 of
the Preferential Procw-ement Regulations , 201 7, Treas ury Regulations
16A3.2(b) and (c) and 16A6.3(b), and paragraph 26 of the Departm ent SCM
16A3.2(b) and (c) and 16A6.3(b), and paragraph 26 of the Departm ent SCM
Policy. These prescripts were applicable to and binding upon the
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procurement process in question, and the Department's non-compliance
therewith rendered the process irregular, unlawful and constitutionally
invalid;
3.4 In response to the RFQ, Ikati Health furnished a B-BBEE certificate
reflecting that it was a I 00% black female-owned enterprise. The
investigation established that this representation was false and materially
misleading. The submission of the false ownership information constituted a
fronting practice and/or a misrepresentation prohibited by the Broad-Based
Black Economic Empowerment Act 53 of 2003 ("B-BBEE Act") and
rendered Ikati Health liable to criminal sanction under section 130 thereof.
The misrepresentation unlawfully influenced the outcome of the procurement
process and thereby violated the procurement principles enshrined in section
217(1) of the Constitution, namely that public procurement must be
conducted in accordance with a system that is fair, equitable, transparent,
competitive and cost-effective;
3.5 The Department's conduct was inconsistent with paragraph 4.6 of the
Instruction Note. Although more than one quotation was received in response
to the RFQ, the Department proceeded to make multiple awards to different
suppliers under the same RFQ, thereby splitting and duplicating the specified
PPE quantities among those suppliers without first subjecting each award to
a separate competitive process. In effect, each award constituted a distinct
procurement decision, yet no competitive quotations were obtained and
evaluated in respect of the quantities awarded to each successful supplier.
This deprived the Department of the benefit of proper price competition and
rendered the procurement process unfair, non-competitive and inconsistent
with section 217 ( 1) of the Constitution;
3.6 Following the award, Ikati Health effectively ceded or subcontracted the
whole of the impugned contract to Kat Lab. Such subcontracting exceeded
the 25% limit prescribed by regulations 6(5) and 12 of the Preferential
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Procurement Regulations, 20 I 7. Moreover, Kat Lab, which was wholly
owned by Mr Keith Dodkins ("Keith Dodkins") at the time, did not possess
the preferential procurement credentials relied upon by Ikati Health in
securing the award and, at best for the respondents, qualified for a materially
lower preference than that claimed by Ikati Health. The arrangement
therefore undermined the objectives of the PPPFA and the B-BBEE Act,
constituted an impermissible circumvention of the applicable procurement
framework, and rendered the award and its implementation unlawful and
invalid; and
3.7 lkati Health and Keith Dodkins abused the distinct juristic personalities of
Ikati Health and Kat Lab as a fa9ade to obscure the true flow of benefits under
the impugned contract and to conceal the excessive profits jointly extracted
from the transaction. The effect of their arrangement was that the respondents
realised a profit of approximately 185% from a procurement undertaken
during a national state of disaster and a global pandemic . Such conduct
undermined the constitutional imperatives of fairness, transparency,
competitiveness and cost-effectiveness in public procurement, constituted an
abuse of corporate personality, and rendered the resulting transaction
unlawful, invalid and inconsistent with section 217(1) ofthe Constitution.
[4] In opposing the review application, the Respondents advance the following
contentions:
4.1 The procurement was lawfully conducted m terms of the emergency
deviation framework applicable at the time;
4.2 Whether regarded as mandatory preconditions under the earlier Treasury
Instruction Notes or as substantive indicators of constitutional compliance
under the subsequently adopted emergency framework, the procurement
satisfied each of the three recognised safeguards applied by this Tribunal in
COVID-19 procurement matters, which are:
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(a) the thermometers complied with the specifications prescribed by the
Department;
(b) the contract price was materially below the applicable benchmark; and
(c) Ikati Health was properly registered on the CSD.
4.3 Ikati Health submitted the lowest quotation among the responsive bidders;
4.4 The goods were duly delivered, accepted, and deployed for their intended
public purpose;
4.5 The Respondents acted in good faith and were not complicit in any alleged
procedural irregularity; and
4.6 The extraordinary relief sought by the SIU, including disgorgement of
profits, the piercing of the corporate veil, and the imposition of personal
liability, is disproportionate, legally unsustainable, and precluded by recent
authority of the Supreme Court of Appeal. In particular, the Respondents rely
on Mafoko Security Patrols (Pty) Ltd and Others v Mjayeli Security (Pty) Ltd
and Others, 1 in which the Court rejected the proposition that the
disgorgement of profits is automatic or punitive in circumstances where a
contract has been fully performed at competitive market prices.
Factual Matrix
[5] On 23 July 2020, the President of the Republic of South Africa referred allegations
of impropriety relating to the affairs of various state institutions, including the Department
and the Second Respondent (collectively, "the Departments"), to the SIU. The referral was
effected through Proclamation R.23 of 2020 ("the Proclamation"), published in
Government Gazette No. 43546 on 23 July 2020. The Proclamation defined the terms of
reference of the SIU and authorised it to:
5.1 Investigate any unlawful conduct in connection with the procurement of
goods or services during, or in respect of, the National State of Disaster
1 Mafoko Security Patrols (Pty) Ltd and Others v Mjayeli Security (Pty) Ltd and Others [2025) ZASCA 179.
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declared under Government Notice No. 313 of 15 March 2020, by or on
behalf of all state institutions, including the Departments , and any payments
made pursuant thereto in circumstances where such procurement or
payments were irregular or otherwise unlawful; and
5.2 Exercise and perform all functions and powers assigned to or conferred upon
the SIU by the SIU Act, including the recovery of any losses suffered by the
Departments arising from the matters identified in the Schedule to the
Proclamation.
[6] Following the publication of the Proclamation, the SIU conducted an investigation
under the authority' conferred upon it. The present civil proceedings are instituted by the
SIU in terms of sections 4(1)(c) and 5(5) of the SIU Act, read with the Proclamation , and
arise from the investigation conducted pursuant to the Proclamation.
[7] The Second Respondent , the Department of Education, approached the Department
for assistance with the procurement of PPE to prevent and mitigate the spread of the
COVID-19 pandemic in its schools. Accordingly, on or about 21 May 2020, the Health
Procurement Committee convened a meeting to discuss the quantities of PPE required by
the Department of Education to ensure that adequate supplies were available before the
reopening of schools on 1 June 2020. Digital thermometers were among the PPE items
identified for procurement.
[8] Following the above, the Department drafted a specification for the procurement of
5 000 thermometers. The SIU's forensic investigation was unable to establish which
officials were responsible for drafting the specification or what information informed its
formulation. The specification required bidders to supply 5 000 thermometers. On 23 May
2020, the Department issued an RFQ based on that specification to nine companies. The
SIU investigators were unable to locate any records indicating how those nine suppliers
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were identified or selected to receive the RFQ, and no witness could provide an explanation
in this regard.
[9] The closing date for the submission of quotations was 24 May 2020 at 10h00. The
bidders had less than 30 hours within which to prepare and submit their quotations. On
23 May 2020, Mr Adam Dodkins ("Adam Dodkins"), the Administration Manager oflkati
Health, submitted a written quotation by email on behalf oflkati Health to the Department.
In its quotation, Ikati Health offered to supply the Department with 5 000 thermometers at
a unit price of R895.00. The total quoted price for the supply of the 5 000 thermometers
was R4 475 000.00.
[1 0] The minutes of the Bid Evaluation Committee ("BEC") meeting held on 24 May
2020 at I 0h30 reveal that only six of the nine companies invited to submit quotations
responded to the RFQ. Following the evaluation of the quotations received, the BEC
resolved as follows:
I 0.1 Ikati Health be awarded the contract for the supply of 5 000 thennometers at
a total contract value of R4 475 000.00;
10.2 Three other companies were recommended but did not receive any award;
and
10.3 One company was found to be non-compliant.
[11] The quotations submitted by the remaining bidders reflected unit prices ranging
from RI 461.36 to R2 498.00 per thermometer. Accordingly, the quotation submitted by
Ikati Health, at R895.00 per unit, was the lowest-priced compliant bid received by the
Department.
[12) Ms Bathibang ("Bathibang") and Keith Dodkins are reflected as directors of Ikati
Health in a report obtained from the Companies and Intellectual Property Commission
("CIPC"), the statutory body with which the company is registered. The CIPC records
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indicate that both Bathibang and Keith Dodkins were appointed as directors oflkati Health
on 4 April 2019. In addition, the CSD registration report for Ikati Health, dated 6 May
2020, reflects_ that the company was registered on the CSD on 23 April 2020 under the
category of human health and social work activities.
[13] On 25 May 2020, the Department approved the quotation submitted by Ikati Health.
The letter awarding the contract to Ikati Health was signed by Ms K Lehloenya
("Lehloenya"), who at the time served as the Department's Chief Financia l Officer. On the
same date, the award was approved by Professor M Lukhele ("Prof. Lukhele"), the then
Head of Department. The following day, namely 26 May 2020, Bathibang formally
accepted the appointment of Ikati Health.
[14] It is common cause that the Department awarded the bid to lkati Health, following
which the latter concluded a written agreement with the Department. It is further
undisputed that Ikati Health appointed Kat Lab as a subcontractor to procure the 5 000
thermometers required under the contract. In explaining this arrangement, Keith Dodkins
stated that Kat Lab possessed enormous experience in the healthcare industry, whereas
Ikati Health had no such experience. According to him, Ikati Health was primarily
established to assist Bathibang, whose grandmother had been in his employ for many years.
The company was intended to generate income to finance Bathibang's B.Com studies at
the North-West University, where she was then a student.
[15] During the course of its forensic investigation, the SIU requested the Department to
produce the procurement records pertaining to the acquisition of the thermometers. The
Department, however, was unable to furnish a number of documents which, according to
the SIU, ought ordinarily to have been generated and retained as part of the procurement
process. These included:
15.1 documentary proof of the emails allegedly sent to six prospective service
15.1 documentary proof of the emails allegedly sent to six prospective service
providers inviting them to submit quotations in response to the RFQ;
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15.2 the prescribed SBD 4 (Declaration of Interest), SBD 8 (Declaration of
Bidder's Past Supply Chain Management Practices), and SBD 9 (Certificate
oflnd ependent Bid Determination) forms that should have accompanied the
quotations submitted by the six invited service providers; and
15.3 the minutes of the Bid Specification Committee ("BSC"), recording and
confirming the determination of the specifications and quantities required,
together with the minutes of the Bid Adjudication Committee ("BAC"),
recording and confirming the appointment of Ikati Health for the supply of 5
000 thermometers.
[16] Following its appointment, Ikati Health undertook to deliver, and ultimately
delivered, 5 000 thermometers to the 3G Warehouse utilised by the Department for the
storage of PPE during the COVID-19 pandemic. The first consignment, comprising 500
thermometers, was delivered on 28 May 2020, while the remaining 4 500 thermometers
were delivered on 8 June 2020. The letter of appointment expressly stipulated that delivery
of the items ordered was to be "immediate". Notwithstanding this requirement, the full
complement of thermometers was delivered only on 8 June 2020. The SIU contends that
the delivery timeline calls into question the existence of the alleged urgency relied upon to
justify the procurement process. Accord ing to the SIU, this is particularly so in
circumstances where both Departments either knew, or ought reasonably to have known,
well in advance of the anticipated reopening of public schools.
[17] The Department subsequently furnished the SIU with a Purchase Request Form
("RLS 01 Form") linked to SAP Purchase Requisition Number 1002163213. The form
records an amount ofR4 475 000.00 for the procurement of 5 000 thermometers. It further
reflects that the requisition was compiled by Nthombifuthi Pooe, approved by Ms Pino,
captured by Thembile Msibi, and released by Percy Nyambi on 5 June 2020.
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Summary of the SIU's Findings Relating to Ikati Health and Kat Lab
Alleged B-BBEE Fronting and Misrepresentation
[18] The SIU investigation established that Ikati Health was registered on the CSD as a
100% black female-owned enterprise, with Bathibang identified as the sole black female
owner and principal beneficiary of the company. The company's B-BBEE status was
further supported by a confirmation letter issued by its accountants, D Kalmin & Company
Inc., certifying that Ikati Health was a 100% black-owned and 100% black female-owned
entity. However, the investigation revealed facts suggesting that this representation did not
reflect the true position. Although Bathibang was listed as a director, banking records
obtained by the SIU showed that Keith Dodkins was the sole signatory on Ikati Health's
business bank account. The SIU regarded this as inconsistent with the claim that Bathibang
was the effective owner and controlling mind of the company.
[19] The investigation further disclosed that, shortly after the Depa1tment paid Ikati
Health a total of R4 475 000.00 for the supply of 5 000 infrared thermometers, substantial
portions of those funds were transferred to Kat Lab, a business solely owned by Keith
Dodkins. The SIU interviewed Bathibang on 25 November 2020. According to the
interview record, she described her role as largely administrative, involving filing,
photocopying and contacting clients. She further stated that she was a full-time student and
had not been involved in the day-to-day management of the company. She indicated that
she had never previously seen several key company documents, including banking records,
CSD registration documentation and the B-BBEE certification relied upon by Ikati Health.
[20] She also reported that she received a modest monthly salary, initially Rl 700 and
later Rl 0 000 per month for a limited period following payment by the Department. She
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also mentioned that the directors oflkati Health were to receive Rl 00 000.00 performance
bonuses. The Rl 00 000.00 performance bonus that should have been paid to her was
queried by the SIU as no such payment was reflected in Ikati Health's bank statements and
also not in her personal bank statements. She further explained that she had not received
all the money at the time of the interview, i.e. on 25 November 2020.
[21] On the basis of this evidence, the SIU contends that Bathibang served as a director
in name only and that Ikati Health falsely represented itself as a 100% black female-owned
enterprise in order to obtain procurement advantages under the preferential procurement
framework. The SIU alleges that this conduct constituted B-BBEE fronting and fraud,
designed to secure an unlawful advantage in the public procurement process and thereby
prejudice the Department and competing suppliers. The SIU further contends that such
conduct contravened the B-BBEE Act and undermined the constitutional procurement
principles of fairness , equity , transparency, competitiveness and cost-effect iveness
embodied in section 217 of the Constitution.
Procurement of Thermometers and Flow of Funds
[22] The evidence shows that the Department paid lkati Health R4 475 000.00 during
June 2020 for the supply of 5 000 infrared thermometers. Payment was effected in two
tranches:
22.l R447 500.00 on 18 June 2020; and
22.2 R4 027 500.00 on 22 June 2020.
[23] The SIU's analysis of bank statements demonstrated that, after receipt of these
funds, substantial payments were made by Ikati Health to Kat Lab.
[23] According to the invoices reviewed by the SIU:
23.1 Ikati Health sold the thermometers to the Department for R4 475 000.00; and
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23.2 Ikati Health purchased the same thermometers from Kat Lab for
R2 846 250.00 (including VAT).
[24] The investigation further established that Kat Lab had sourced the thermometers
from international suppliers and paid approximately Rl 570 670.71 in acquisition and
transport costs, including purchases from Guangzhou MeCan Medical Limited, Heal Force
International Trading (Shanghai) Co. Ltd, and Natco International Transport (Pty) Ltd.
Alleged Excessive Profits
[25] The SIU contends that Kat Lab served no genuine commercial purpose and
functioned merely as an intermediary through which Keith Dodkins extracted the majority
of the financial benefit arising from the contract. According to the SIU, the arrangement
concealed the true extent of the profits earned and enabled Keith Dodkins to benefit from
the procurement advantages obtained throu gh the alleged B-BBEE front ing structure. The
SIU's profit analysis reflects the following:
25.1 Ikati Health generated a profit of approximately Rl 628 750.00, representing
a margin of about 57% on the contract price paid by the Department ;
25.2 Kat Lab generated a further profit of approximately Rl 275 579.29,
representing a margin of about 81 % on its supply of the thermometers to Ikati
Health;
25.3 The combined profit realised through the transaction amounted to
approximately R2 904 329.29, equating to an overall profit margin of about
185%.
[26] The above translates into the following calculation:
26.1 Total profit: R l 628 750.00 + Rl 275 579.29 = R2 904 329.29;
26.2 Procurement cost: RI 570 670 .71 ;
26.3 Profit percentage: R2 904 329.29 + Rl 570 670.71 x 100 = 184.91%
(approximately 185%).
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Excessive Pricing During the COVID-19 Pandemic
[27] The SIU relies on regulations issued under Government Gazette No. 11057 of 19
March 2020, which were enacted to protect consumers and public institutions against
unjustified price increases during the national disaster. The regulations identified
emergency products and medical supplies as goods requiring particular protection from
excessive pricing practices. They further provided that material price increases
unsupported by corresponding cost increases, or those that substantially elevated profit
margins above pre-pandemic levels, could constitute prima facie evidence of excessive or
unfair pricing. Against this regulatory backdrop, the SIU contends that the profits realised
by Ikati Health and Kat Lab were unjustifiable, excessive and contrary to the objectives of
the emergency pricing regime.
[28) The SIU contends that , on the evidence before the Tri bunal , the amount of Rl 628
750.00, representing the profit retained by Ikati Health, is recoverable from Kat Lab as part
of the proceeds of payments that were unduly made pursuant to the impugned transaction .
The SIU further contends that the amount of RI 275 579.29, being the profit retained by
Kat Lab after payment of its suppliers, is likewise recoverable from Kat Lab. According to
the SIU, Kat Lab was no more than the alter ego of Ikati Health and was unnecessarily
interposed by Keith Dodkins in the transaction to enable him to receive the greater portion
of the funds paid by the Department.
[29] The SIU alleges that this arrangement allowed the transaction to benefit from the
preferential procurement advantages associated with Ikati Health's purported B-BBEE
status while simultaneously concealing the true extent of the excessive profit derived,
directly or indirectly, from the contract with the Department. Accordingly, the SIU submits
that the total profit of R2 904 329.29 realis ed through the tran sact ion is liable to be
disgorged and recovered from the respondents.
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SIU's Conclusion
(30] In summary, the SIU alleges that:
Issues
30.1 Ikati Health falsely represented itself as a 100% black female-owned
enterprise, amounting to B-BBEE fronting and fraud;
30.2 Bathibang was not the true beneficial owner or controlling mind of the
company but a nominal director;
30.3 Keith Dodkins exercised effective control over the company and its finances;
30.4 Kat Lab functioned as an unnecessary intermediary designed to channel the
bulk of the financial benefit to Keith Dodkins;
30.5 The procurement process was tainted by misrepresentation and was
inconsistent with constitutional and statutory procurement requirements;
30.6 Ikati Health and Kat Lab jointly earned excessive profits of approximately
R2.9 million from the thermometer transaction during the COVID-19
national disaster;
30.7 The profits allegedly constitute amounts recoverable by the State as
unlawfully obtained benefits arising from the impugned procurement.
(31] The overarching issue for determination is whether the SIU has established a case
for the relief it seeks. In resolving that issue, the Tribunal must consider and evaluate
whether the grounds advanced by the SIU are sustainable in law and supported by the
evidence before it. The SIU puts forward seven principal grounds upon which it contends
the procurement process and consequent award were unlawful, irregular and liable to be
set aside. These grounds are:
31.1 The Department 's failure to comply with the requirements of paragraphs 3.1,
3.4 and 3.5 of the National Treasury Instruction Note No. 05 of 2020/21;
31.2 The Department 's fai lure to comp ly with paragraph 4.6(c) of the Natio nal
Treasury Instruction Note, which required the procurement of PPE and
related goods from duly registered and qualifying suppliers, by inviting and
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considering a quotation from Ikati Health despite its alleged non-compliance
with the prescribed supplier registration requirements;
31.3 The Department's failure to conduct the procurement process in line with the
legislative and policy framework governing public procurement and
preferential procurement;
31.4 Material misrepresentation of B-BBEE status;
31.5 The Department 's failure to obtain and evaluate competitive quotations in
the manner contemplated by paragraph 4.6 of the Instruction Note;
31.6 Impermissible subcontracting; and
31. 7 Abuse of corporate structures and excessive profiteering.
[32] Finally, I will explore the SIU's contention that Ikati Health and Kat Lab utilised
their separate juristic personalities to conceal the true nature and extent of the profits
derived from the transaction. It is alleged that the arrangement enabled the parties to realise
an excessive profit margin of approximately 185% during the COVID-19 pandemic,
conduct which the SIU characterises as unlawful, unconstitutional and contrary to public
policy.
Legislative Framework
[33] Section 217 of the Constitution deals with procurement, and sub-section (1)
provides that when an Organ of State in the national, provincial or local sphere of
government, or any other institution identified in national legislation, contracts for goods
or services, it must do so in accordance with a system which is fair, equitable, transparent,
competitive and cost-effective.
[34] Section 38(1)(a)(iii) of the Public Finance Management Act 1 of 1999 ("PFMA") is
concerned with the genera l respons ibiliti es of accounting officers . It prescribes that the
accounting officer for a department, trading entity or constitutional institution must ensure
that that department, trading entity or constitutional institution has and maintains an
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appropria te procure ment and provisioning system which is fair, equitab le, transparent,
compe titive and cost-effective. Section 38(1)(b) of the PFMA further stipulates that an
accounting officer is respons ible for the effect ive, efficie nt, economical and transparent
use of the reso urces of the depart ment, trading entity or const itut ional institution .
[35] Treasury Regulatio n l 6A3. l reads as follows :
"The accounting officer or accounting authority of an institution to which these regulations
apply must develop and implement an effective and efficient supply chain management
system in his or her institution for -
(a) the acquisition of goods and services; and
(b) the disposal and letting of state assets, including the disposal of goods no longer
required."
[36] Treasury Regulation 16A3.2(a) provid es that "A supply chain management system
referred to in paragraph l 6A3 .1 must be fair, equitab le, transparent , competitive and cost
effective". Regulation l 6A3.2(b) and (c) state that "A supply chain management system
referred to in paragraph 16A3.l must: (b) be consistent with the Preferential Proc urement
Policy Framework Act, 2000(Act No. 5 of 2000); (c) be consistent with the Broad Based
Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)".
[37] Treasury Regulatio n 16A6.4 reads as follows:
"If in a specific case it is impractical to invite competitive bids, the accounting officer or
accounting authority may procure the required goods or services by other means, provided
that the reasons for deviating from inviting competitive bids must be recorded and
approved by the accounting officer or accounting authority."
[38] Section 216(1) of the Constitution provides for national legislation to establish a
National Treasury and prescribe measures to ensure both transparency and expendi ture
17
control in each sphere of Government by introducing uniform treasury norms and
standards. The PFMA is the national legislation foreshadowed in section 216( 1) of the
Constitution. The National Treasury is established in section 5 of the PFMA. Section 2 of
the PFMA provides that the object of the PFMA is to secure transparency, accountability,
and the sound management of the revenue, expenditure, assets, and liabilities of the
institutions to which the PFMA applies. Section 3(1) of the PFMAprovides that the PFMA
applies to all departments. This will include both Departments.
[39] Section 76(4)(c) of the PFMA endows the National Treasury with powers to make
regulations or issue instructions applicable to all institutions to which it applies concerning,
inter alia, the determination of a framework for an appropriate procurement and
provisioning system which is fair, equitable, transparent, competitive, and cost-effective.
In the face of the COVID-19 pandemic, the National Treasury issued the Instruction Note
in accordance with sect ion 76(4)(c) and (g) of the PFMA.
[40) Paragraphs 3.1, 3.4, and 3.5 ofNational Treasury Instruction Note No. 05 of2020 /21
provide as follows:
"3 . l Accou nting Officers and accounting authorities must put in place the following
additional procurement and expenditure measures to address the programme of
preventing the spread of the COVID-19 virus:
(a) Internal system for financial control, risk management and reporting in order to
account for the funds used for the COVID-19 disaster;
(b) Ensure that officials committing any expenditure are duly authorised or properly
delegated ;
(c) Avail internal audit functions to conduct audit checks in order to pick up and prevent
irregularities pro-actively ;
(d) Regular monitorin g of expenditur e and generat e frequent expenditure reports (at
least weekly) including monitoring any risks that may arise.
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3.4 The emergency procurement provisions provide for accounting officers/authorities
to procure the required goods or services by other means, such as price quotations
or negotiations in accordance with Treasury Regulation I 6A6.4. The reasons should
be recorded and approved by the accounting officer/ Authority or his/her delegate.
3.5 National Treasury Practice Note No. 8 of 2007/08, paragraph 3.4.3, requires
accounting officers and accounting authorities to report within l O working days to
the relevant treasury and the Auditor-General all cases where goods and services
above the value of RI million (VAT inclusive) were procured in terms of Treasury
Regulation I 6A6.4. The report must include a description of goods or services, the
name/s of the supplier/s, the amount/s involved and the reasons for dispensing with
the prescribed competitive bidding process."
[41] The purpose of the Instruction Note is fourfold:
41.1 To prescribe emergency procurement procedures for the CO VID-19
pandemic;
41.2 To avoid abuse in the supply chain management syste m during the disaster;
41.3 To prescribe emerge ncy procurement procedures for COVID-19 PPE items
and cloth masks for ease of supply by the Small, Medium, and Macro
Enterpr ises (SMMEs); and
41.4 To set the maximum price s to be paid by institutions for selecte d COVID-19
PPE items and cloth masks.
[42] Section 1 of the PFMA states that "'this Act' includes any regulations and
instructions in terms o(section 69, ].2., 85 or 91" . As such, this Instruction Note has the
force of law and must be obeyed by both Departments.
Whether There Has Been an Unreasonable Delay in Launching the Application
[43] The parties adopt diam etrically opposed positions on this issue. The SIU contends
that it has furnished a full and satisfactory explanation for the delay and that, properly
assessed, the delay was neither undue nor unreasonable. It further sub mits that, even if this
19
Tribunal were to conclude that the delay was excessive, which the SIU disputes, the
interests of justice warrant that it be excused, particularly because the matter concerns the
recovery of public funds intended to benefit vulnerable members of society. The Third to
Eighth Respondent s ("the Respondents"), on the other hand, maintain that there is no basis
for condonation. Their principal contention is that the SIU's explanation is inadequate
because it contains material gaps and periods of delay that remain unexplained. According
to the Respondents, the authorities require a full, reasonable, and acceptable explanation
covering the entire period of delay, and the SIU has failed to meet that standard.
Consequently, they submit that the delay should not be condoned.
[44] Against that background, I turn to the factual matrix underlying this matter.
Although the impugned decision was taken on 25 May 2020, the SIU acquired the requisite
authority to investigate only when the Proclamation was issued on 23 July 2020. The Ikati
Health and Kat Lab matter was one of many COVID-19 PPE investigations undertaken
across the country under severe resource constraints. The investigation commenced in
August 2020 and was finalised in May 2021.
[45] According to the SIU, the investigation was conducted primarily by a single
investigator, assisted by one other official, while both were concurrently engaged in
numerous investigations of a similar nature across the country. The investigation was
further impeded by the restrictions associated with the COVID-19 pandemic, which limited
access to witnesses, documents and relevant officials. Substantial volumes of documentary
material, including bank records and procurement documentation , had to be obtained ,
collated and analysed. The investigation also entailed tracing the flow of funds, calculating
profits, conducting numerous witness interviews, and considering the evolving Treasury
profits, conducting numerous witness interviews, and considering the evolving Treasury
and supply chain management regulatory framework applicable during the pandemic. In
addition, witness availabilit y was frequently affected by self-isolation requirements , illne ss
and remote working arrangements.
20
[46] Following the completion of the investigation, the matter had to proceed through
the Office of the State Attorney, which was itself under considerable strain as a result of a
significant influx ofCOVID-19 recovery litigation. According to the SIU, the Office of the
State Attorney experienced a range of operational challenges, including:
46.1 Significant case backlogs;
46.2 Administrative inefficiencies;
46.3 Delays in the appointment of counsel;
46.4 Delays in the payment of counsel; and
46.5 The loss of legal practitioners who were unwilling to continue acting in
matters where payment remained outstanding.
[47) The SIU states that it took active steps to mitigate these difficulties, including the
secondment of senior legal officials to the Office of the State Attorney and efforts aimed
at expediting the litigation process.
[ 48) From May 2021 onwards, the SIU sought the necessary authority to brief counsel
and engaged repeatedly with the Office of the State Attorney concerning the appointment
process. According to the SIU, a number of administrative difficulties contributed to
substantial delays, including:
48.1 Mislaid or misplaced instructions;
48.2 The Office of the State Attorney's counsel rotation policies;
48.3 Difficulties in securing the services of junior counsel;
48.4 Procurement requirements necessitating the obtaining of multiple quotations;
and
48.5 Lengthy internal approva l processes.
The SIU maintains that, notwithstanding these challenges, it continuously followed up on
the matter and took active steps to advance the litigation and bring it to finality.
21
[ 49] Because the Office of the State Attorney could not effectively process matters, the
SIU established a panel of private attorneys in late 2022. Although the attorneys were
appointed, implementation was delayed by:
44.1 Service level agreement negotiations;
44.2 Internal procurement processes ; and
44.3 Development of operational procedures.
Further setbacks occurred when evidence bundles were lost and had to be reconstructed.
[50] The SIU further explains that the Auditor-General raised concerns regarding the
legality of the procurement process through which the attorney panel had been appointed.
Pending the resolution of those concerns, and in order to avoid potential non-compliance
with the PFMA, the SIU suspended all work performed by panel attorneys in July 2023.
This, in turn, required the transfer of affected matters back to the Office of the State
Attorney, resulting in further delays and requiring the implementation of fresh
administrative and briefing processes.
[ 51] Throughout the relevant period, the SIU was continuously taking steps to advance
the matter. However, delays resulted from:
51.1 The complexity and scale of the investigation;
51.2 COVID-19 disruptions;
51.3 Institutional capacity constraints;
51.4 Procurement and governance requirements applicable to public bodies; and
51.5 Difficulties in securing and managing legal representation.
[52] The SIU has sought condonation for the delay in bringing its application, which is
founded on the principle of legality. In Buffalo City Metropolitan Municipality v Asia
Construction ,2 the Constitutiona l Court distilled and develop ed the princip les gove rnin g
2 Tn Buffalo City Metropolitan Municipality v Asia Construction (Pty) Ltd 2019 ( 4) SA 33 I (CC) at paras 48-63.
22
delay in legality reviews, particularly where an organ of state seeks to review and set aside
its own unlawful decision. The Court reaffirmed that the two-stage test formulated in
Khumalo v Member of the Executive Council for Education, KwaZulu-Nata/ 3 applies to
legality reviews. The first enquiry is whether the delay in instituting the review proceedings
was unreasonable. If the delay is found to be unreasonable, the second enquiry is whether
the court should neve1iheless overlook the delay in the interests of justice.
[53] In conducting the second enquiry, the Court emphasised that, in contrast to the
Promotion of Administrative Justice Act 3 of 2000, the assessment of legality reviews is
flexible, fact-sensitive and context-driven. Relevant considerations include the explanation
advanced for the delay, whether that explanation covers the entire period of the delay, the
prejudice that may be suffered by affected parties, the consequences of setting aside the
impugned decision, the nature and seriousness of the alleged illegality, and the conduct of
the litigant seeking the review. The Court further stressed that organs of state bear a
heightened constitutional duty to act lawfully, expeditiously and in the public interest, and
are generally expected to provide a full and satisfactory explanation for any delay in
seeking to correct their own unlawful decisions.
[54] The Court also recognised that, notwithstanding an unreasonable delay, the interests
of justice may warrant overlooking the delay where considerations of legality,
accountability and good governance weigh in favour of entertaining the review. In
particular, the strength of the legality challenge and the extent of the impugned
unlawfulness are material factors in determining whether a delay should be condoned.
Ultimately, the enquiry requires a balancing of all relevant considerations in order to
determine whether the interests of justice favour adjudication of the legality challenge
despite the delay.
despite the delay.
3 Khumalo v Member of the Executive Council for Education, KwaZulu Natal [2013] ZACC 49; 20 14 (5) SA 579
(CC); 2014 (3) BCLR 333 (CC).
23
[55] A finding that the delay was unreasonable does not bring the enquiry to an end. The
Court must still determine whether, notwithstanding the delay, it should be overlooked in
the interests of justice. This entails a value-laden and context-sensitive assessment in which
all relevant considerations must be weighed. As the Constitutional Court observed in
Buffalo City, delay cannot be assessed in isolation from the broader circumstances of the
case.
[56] Relevant considerations include the explanat ion for the delay and whether it
accounts for the entire period of inactivity; the prejudice that may be suffered by affected
parties; the practical consequences of setting aside the impugned decision; and whether
any resulting prejudice may be ameliorated through a just and equitable remedy under
section 172(1 )(b) of the Constitution. The existence of prejudice does not, without more,
preclude a court from entertaining a legality review where constitutional considerations
favour intervention.
[57] The strength and nature of the alleged illegality are also material considerations. In
Buffalo City, the Court made clear that the merits are not irrelevant to the condonation
enquiry. On the contrary, the seriousness of the unlawfulness may itself justify overlooking
an otherwise unreasonable delay. A Court is therefore entitled to consider whether the
impugned conduct constitutes a significant departure from constitutional or statutory
requirements.
[58] Particular scrutiny is required where the applicant is an Organ of State seeking to
impugn its own decision. State litigants bear a heightened constitutional obligation to act
lawfully, diligently and without delay. They are ordinarily best placed to explain periods
of inactivity and are expected to furnish a full and satisfactory explanation where a delay
has occurred. An unexplain ed or inad equately explain ed delay by the state weighs heavi ly
against the grant of condonation.
24
[59] The Constitutional Court further emphasised, with reference to MEC for Health,
Eastern Cape and Another v Kirland Investments (Pty) Ltd,4 Khumalo and Merafong City
Local Municipality v Anglogold Ashanti Limited,5 that Organs of State must act as model
litigants. They are required to uphold the rule of law, to take reasonable steps to correct
unlawful decisions, and to do so through proper legal processes rather than by resorting to
self-help or administrative inaction. Their conduct is according ly assessed against a more
exacting standard than that applicable to private litigants.
[60] Nevertheless, a delay may be overlooked where the review is pursued in good faith
and forms part of a genuine effort to remedy illegality, promote accountability and advance
clean governance. In such circumstances, considerations of legality and the public interest
may outweigh the prejudice occasioned by the delay.
[ 61] Even where a Court declines to overlook a delay. the enquiry does not necessarily
end there. As explained in State Information Technology Agency SOC Limited v Gijima
Holdings (Pty) Limited,6 section 172(l)(a) of the Constitution obliges a Court to declare
conduct invalid if it is inconsistent with the Constitution. Accordingly , a Court may be
constitutionally required to declare conduct unlawful notwithstanding the delay. The
remaining question is whether, and to what extent, a remedy should be granted under
section 172( 1 )(b) of the Constitution.
[62] The test for determining condonation is whether it would be ' in the interests of
justice' to do so. The Constitutional Court acknowledged in Grootboom v National
4 Member of the Executive Council.for Health, Eastern Cape v Kirland Investments (Pty) limited t/a Eye and Lazer
institute [2014) ZACC 6; 2014 (3) SA 481 (CC); 20 14 (5) BCLR 547 (CC).
5 Merafong City Local Municipality v Anglogold Ashanti Limited [2016) ZACC 35; 2017 (2) SA 2 11 (CC); 2017 (2)
BCLR 182 (CC) at para 61.
BCLR 182 (CC) at para 61.
6 State Information Technology Agency SOC limited v Gijima Holdings (Pty) Limited [2017] ZACC 40; 2018 (2)
SA 23 (CC); 2018 (2) BCLR 240 (CC) at para 52.
25
Prosecuting Authority and Another,7 that this is a very flexi ble term. Zondo J, as he then
was, set out the test for the granting or refusal of condonat ion in the following terms:
"[50] In this court the test for determining whether condonation should be granted or
refused is the interests of justice. If it is in the interests of justice that condonation be
granted, it will be granted. lf it is not in the interests of justice to do so, it will not be
granted. The factors that are taken into account in that enquiry include:
(a) the length of the delay;
(b) the explanation for, or cause for, the delay;
( c) the prospects of success for the party seeking condonation;
(d) the importance of the issue(s) that the matter raises;
(e) the prejudice to the other party or parties; and
(f) the effect of the delay on the administration of justice.
Although the existence of the prospects of success in favour of the party seeking
condonation is not decisive, it is an important factor in favour of granting condonation."
[63] The interests of justice must be determined with reference to all relevant facto rs.
However , some of the factors may just ifiably be left out of consideration in certai n
circumstances. For example, where the delay is unacceptab ly excess ive, and there is no
explanation for the delay, there may be no need to consider the prospects of success. If the
period of delay is short and there is an unsatisfactory explanation but there are reasonable
prospects of success, condo nation should be granted. However , desp ite the presence of
reasonable prospects of success, condonat ion may be refused where the delay is excess ive,
the expla nation is non-existent and granting condonation would prejudice the other party .
As a genera l proposition, the various factor s are not individually decisive but should all be
taken into account to arrive at a conclusio n as to what is in the interests of just ice.
[64] According to the evidence of the SIU, it had access to all the Departme nt's
[64] According to the evidence of the SIU, it had access to all the Departme nt's
procurement records from the outset of the investigation following the Proclamation
1 Grootboom v National Prosecuting Authority and Another (2013) ZACC 37; 2014 (2) SA 68 (CC).
26
published in Government Gazette No. 43546 of 23 July 2020. The SIU's statutory
investigative powers further enabled it to obtain, by subpoena, all relevant documentation
and bank records. The investigation report, completed on 31 May 2021, confirms that the
SIU had by then obtained all material documentation relevant to its investigation. These
documents included:
64.1 The RFQ documentation and award letter;
64.2 The BEC minutes dated 24 May 2020;
64.3 Delivery notes dated 28 May 2020 and 8 June 2020;
64.4 Payment schedules reflecting the relevant transfers;
64.5 Bank statements of the third and fifth respondents; and
64.6 Interview notes obtained from Bathibang on 25 November 2020.
[65] Accepting that the SIU had immediate access to the documentation required for its
investigation and that the investigation was completed on 31 May 2021, the period
reasonably attributable to the investigation itself must be excluded from the delay enquiry.
The delay must therefore be calculated from 31 May 2021, at the latest. It is well
established that an organ of state seeking condonation for delay is required to furnish a full,
reasonable and satisfactory explanation covering the entire period of the delay. The
explanation must be comprehensive and account for each period of inactivity. Where no
explanation is provided for a portion of the delay, the delay will ordinarily be regarded as
unreasonable. A partial or piecemeal explanation is insufficient. This principle was
affirmed in Buffalo City Metropolitan Municipality v ASLA Construction (Pty) Ltd supra.
[66] Against the backdrop of the preceding paragraph, there was no need for the SIU to
explain events that transpired before 31 May 2021, as its investigations had not yet been
finalised. The period thereafter is, however, relevant to the enquiry into whether there was
an undue delay. Notab ly, the SIU provides no account of what occurred betwee n 26 May
2021, when Dr Wells informed the investigating team that the HOD had authorised the
2021, when Dr Wells informed the investigating team that the HOD had authorised the
briefing of counsel, and 22 June 2021, when Mr Walser requested Ms Zondi to register the
27
matter with the Office of the State Attorney. This unexplained period spans approximately
26 days and does not live up to the principle of full account.
[67] Similarly, on 1 July 2021, the SIU investigating team was requested to prepare hard
copies of the evidence bundle for purposes of briefing Counsel. Yet, there is no indication
that Counsel was appointed at that stage. Instead, it was only on 12 August 2021, some 43
days later, that Mr Walser sought an update regarding progress in the appointment of
Counsel. It can hardly be suggested that the. preparation of hard copies of the evidence
bundle could reasonably have consumed that entire period. Be that as it may, the Tribunal
is further informed that counsel was only appointed on 30 September 2021, a further 49
days later.
[68] Apart from recording that Mr Walser made enquiries concerning the briefing of
Counsel, the SIU provides no explanation for the delay in appointing Adv. Steven
Budlender SC. The SIU is consequently silent on the steps taken during this period and the
reasons why the briefing process was not concluded sooner. Such an omission is
inconsistent with the obligation resting upon a litigant seeking condonation to furnish a
full, detailed and satisfactory account of the causes of the delay.
[69] The SIU's position fares no better in this regard. Although senior Counsel was
briefed on 30 September 2021, no account is provided of what transpired between that date
and 6 December 2021, when the SIU first consulted with Adv. Budlender. During that
consultation, Counsel assessed the matter and requested that a junior Counsel be appointed
to assist him. Thereafter, the SIU offers no explanation why the appointment of junior
Counsel proved difficult. It merely states that Mr Walser made enquiries in February , 9
March, 3 May, 21 June, 13 July, 25 July and 5 October 2022. It was only on the latter date
that he recommended to the Office of the State Attorney that it utilise its own processes to
that he recommended to the Office of the State Attorney that it utilise its own processes to
appoint junior Counsel. Why this course was not pursued at an earlier stage remains
mysterious.
28
[70) The general reference to periods of delay, without any particularity or explanation,
is precisely the defect to which the Court objected in City ofTshwane v Moipone Group of
Companies (Pty) Ltd and Another. 8 The Court observed that there were extensive periods
during which absolutely nothing was done in relation to the impugned tender and for which
no explanation had been provided. It further emphasised that the City of Tshwane ' s
explanation for the delay ought to have commenced from the date on which it became
aware of the impugned decision. Ultimately, the Court found the explanation for the delay
to have been disappointingly insufficient and, in effect, that no satisfactory explanation had
been furnished.
[71] It would appear that the SIU simply abandoned its efforts to appoint junior Counsel.
After Mr Walser's recommendation that the Office of the State Attorney appoint junior
Counsel in accordance with its own protocols, no explanation is provided regarding the
outcome of that process. Instead, the SIU directs the Tribunal's attention to other difficulties
it encountered, including challenges relating to the constitution of a panel of attorneys , the
subsequent dissolution of that panel following the Auditor-General's finding that it did not
comply with section 217 of the Constitution , and the secondment of another attorney to the
Office of the State Attorney.
[72) Even if these matters hampered progress, it remains evident that senior and junior
Counsel ought to have been appointed and briefed substantially contemporaneously. It is
wholly unacceptable that senior Counsel was briefed on 30 September 2021, only for the
SIU to wait almost three months before advising that junior Counsel would be required.
Given the magnitude, complexity and volume of the work involved, it should have been
readily apparent to any legally qualified person that the matter necessitated the appointme nt
of both senior and junior Counsel from the outset.
of both senior and junior Counsel from the outset.
8 City of Tshwane Metropolitan Municipality v Moipone Croup of Companies (Pty) Ltd and Another [2024)
ZAGPPHC 456 at para 164.
29
[73] This contention bears a close resemblance to the argument rejected by the Supreme
Court of Appeal in Special Investigating Unit and Another v Engineered Systems Solutions
(Pty) Ltd.9 Also closely related is the judgment of this Tribunal in Special Investigating
Unit v Member of the Executive Council for the Department of Transport, KwaZulu-Natal
and Another, 10 where the Tribunal held that explanations such as difficulties in briefing
Counsel and the fact that officials were on leave during the festive season do not constitute
acceptable grounds for the delay. The Tribunal regarded such reasons as objectionable and
insufficient to justify non-compliance with the applicable time periods.
[74] In the final analysis, the delay was both substantial and unjustified. On the SIU's
own version, it is evident that these proceedings could have been institute d considerably
earlier than they were. The existence of an undue delay is therefore plainly established.
The remaining question is whether that delay ought nevertheless to be condoned. It is to
that issue that I now turn.
Should The Undue Delay Be Condoned?
[75] Notwithstanding the shortcomings identified in relation to the first leg of the
enquiry, the SIU contends that it has adequately accounted for the delay and that the
Tribunal should therefore find in its favour. It further submits that, should it become
necessary to consider the second leg of the test, the interests of justice justify overlooking
the delay, having regard to the scale of the matter and its public significance. What
ultimately weighs against the SIU, however, is the combination of its poor prospects of
success and its inadequate explanation for the delay. The explanation furnished provides
scant insight into what transpired and why the application was not launched timeously.
9 Special Investigating Unit and Another v Engineered Systems Solutions (Pty) Lid [202 1] ZASCA 90; [2021] 3 All
SA 791 (SCA); 2022 (5) SA 416 (SCA).
SA 791 (SCA); 2022 (5) SA 416 (SCA).
10 Special Investigating Unit v Member of the Executive Council/or the Department of Transport, KwaZulu-Natal and
Another [2024) ZAST 2.
30
[76] As the Constitutional Court observed in Grootboom, a deficient explanation for a
delay may, in appropriate circumstances, be offset by strong prospects of success. That is
not the position here. The SIU's sparse and dissatisfactory explanation is not complemented
by compelling prospects on the merits. In those circumstances, it is difficult to discern any
basis upon which condonation should be granted where both the explanation for the delay
and the underlying application are weak. It may be argued that courts and tribunals have,
in appropriate cases, condoned even lengthier delays where the interests of justice so
warranted.
[77] In those instances, however, the authorities make plain that condonation is a
contextual and fact-specific enquiry, and that the mere invocation of the phrase "interests
of justice" does not suffice. Whether condonation should be granted depends on a
consideration of all relevant factors, including the explanation for the delay and the
prospects of success. In many of the cases where substantial delays have been condoned,
the underlying merits disclosed serious and demonstrable irregularities warranting the
Court's intervention notwithstanding the delay.
[78] This is an appropriate juncture at which to consider the strength of the SIU's case
against the Respondents to determine whether its prospects of success are sufficient to
compensate for its weak explanation of the inordinate delay. The SIU advances seven
grounds which, it contends, justify the relief sought against the Respondents. I now turn to
consider each of those grounds in turn.
Deviation Recordal / Approval and Reporting
[79] The SIU alleges that the Department failed to comply with paragraphs 3.1 , 3.4 as
read with 3.5 of National Treasury Instruction Note No. 05 of 2020/21. According to the
SIU, the Department did not properly record the reasons for deviating from the ordinary
procurement processes contemplated in Treasury Regulation l 6A.6.4, nor did it obtain the
procurement processes contemplated in Treasury Regulation l 6A.6.4, nor did it obtain the
requisite approval for such deviation from the accounting officer or a duly authorised
31
delegate. Additionally, the SIU contends that where goods or services exceeding RI 000
000.00 were procured pursuant to Regulation 16A.6.4, the Department failed to report the
deviation to the relevant treasury and the Auditor-General within ten days, as required by
the Instruction Note. On the strength of these alleged non-complian ce findings, the SIU
submits that the procurement decision was unlawful and consequently invalid.
[80] In Led/a Structural Development (Pty) Ltd and Others v Special Investigating
Unit, 11 the Constitutiona l Court recognised that the COVID-1 9 pandemic created an
exceptional context warranting departures from ordinary procure ment processes , provided
that such departures remained compl iant with the emergency safegua rds prescribed by the
applicable legal framework. The legality of the impugned appointmen t must therefore be
evaluated within the emergency procurement regime that governe d procurement during the
national state of disaster, rather than by reference to the standard competitive procurement
requirement s ordinarily applicable.
[81] The legality of emergency procurement undertaken during the COVID-19 national
state of disaster must be assesse d within the emergency deviation framework established
by Treasury Regulat ion l 6A.6.4 and the National Treasury Instruction Notes issued in
response to the pandemic. Within that framework, the Special Tribunal has consistently
evaluated the substantive lawfulness and constitutional validity of deviation-based PPE
procurement against three recognised safeguards designed to ensure that emergency
measures remain consistent with the principles of legality, accountability, and prudent
financial administration. These safeg uards are:
81.1 The goods complied with the specifications determ ined by the National
Department of Health;
81.2 Pricing was equal to or below the benchmark prices prescribed by the
National Treasury; and
National Treasury; and
11 Led/a Structural Development (Ply} Lid and Others v Special investigating Unit [2023] ZACC 8; 2023 (6) BCLR
709 (CC); 2023 (2) SACR I (CC) at paras 3-5.
32
81.3 The supplier was duly registered on the CSD.
[82] There is no proof that the Department complied with Treasury Instruction Note No.
05 of 2020/21. In the absence of interviews with the relevant departmental officials, can it
be conclusively determined that there was no deviation from the prescribed procurement
requirements? Even if it is assumed that no deviation occurred, the further question is
whether the non-compliance was material when viewed in the context of the National State
of Disaster. The materiality of such non-compliance must be assessed against the
circumstances prevailing during the National State of Disaster, particularly with reference
to the three safeguards mentioned above.
[83] Accordingly, the first enquiry is whether the goods supplied complied with the
specifications prescribed by the Department. While the Applicant seeks to cast doubt on
the quality of the thermometers supplied by the third respondent, its case goes no further
than asserting that it is unable to verify whether those thermometers complied with the
specifications of the World Health Organisation and the National Department of Health.
[84] That falls far short of establishing, on a balance of probabilities, any defect or non
compliance. The evidence shows that, before delivery, a sample of the thermometers was
presented to and accepted by the relevant departmental official on 27 May 2020, and that
the devices were FDA approved. No complaint was ever raised concerning their quality,
specifications, calibration, accuracy or fitness for purpose. Moreover, the goods were
received and consumed without any adverse consequences, which in all probability
supports the contention that the goods were indeed compliant.
[85) The second question is whether the pricing was equal to or below the benchmark
prices prescribed by the National Treasury. It is commo n cause that the maximum am ount
set by the Department was R2 537.00 per unit. By contrast, Ikati Health charged
set by the Department was R2 537.00 per unit. By contrast, Ikati Health charged
approximately R895.00 per unit, substantially below the Department's prescribed
33
benchmark. Furthermore, none of the other bidders submitted prices comparable to those
charged by Ikati Health. In these circumstances, it would be untenable to suggest that Ikati
Health and Kat Lab earned an excessive profit or overcharged the Department. Such an
argument undermines the Department's benchmark amount ofR2 537.00, which served as
guidance of what bidders could not go beyond.
[86] The third question is whether the potential supplier was registered on the CSD. The
argument advanced by the SIU here is that Ikati Health was indeed registered on the CSD,
but such falls short of the requirement that it ought to have been registered to render
services in that specific industry, in this case medical supply. This Tribunal rejected this
specific contention in Special Investigating Unit v Vigario Consulting (Pty) Ltd and
Others, 12 and Special Investigating Unit v Nozihle Construction and Projects CC and
Others 13 adopted a similar approach. Accordingly, any argument to the contrary stands to
be rejected as devoid of any merit.
[87] Organs of State are required, even in emergency procurement situations, to invite as
many suppliers as is reasonably possible in order to preserve competitiveness. However, it
would be impractical to interpret the emergency procurement framework as requiring
accounting officers to invite every conceivable supplier or to embark upon a full public
tender process. Rather, the framework requires accounting officers to promote competition
"as far as feasible" within the limitations imposed by the emergency. This is particularly
so in circumstances such as those that prevailed during the COVID-19 pandemic, where
urgency necessarily constrained the extent to which ordinary competitive procurement
processes could be followed.
[88] The SIU's case is founded primarily on documentary evidence, from which it
concludes that the deviation is non-ex istent or, if it is, it was neither recorded nor appro ved,
12 Special Investigating Unit v Vigario Consulting (Pty} Ltd and Others [2023) ZAST 11.
13 Special Investigating Unit v Nozihle Constn1ction and Projects CC and Others [2025) ZAST 17.
34.
nor subsequently reported. The Respondents dispute this contention, asserting that the
existence of the deviation falls within the knowledge of the Accounting Officer, the Chief
Financial Officer, SCM officials, the Health Procuremen t Committee, and the BEC.
Curiously, the SIU did not seek oral evidence from any of these witnesses. Instead, it relied
solely on documents obtained pursuant to section 5(2) subpoenas, notwithstanding that the
very issues in dispute concerned the conduct and decisions of the officials identified above.
[89] In Vigario supra, this Tribunal deprecated document-only investigations as faJling
short of the SIU's obligation to conduct investigations in the interests of justice. The
Tribunal found it troubling that the SIU disregarded important aspects of [officials']
explanations and/or defences. In doing so, it acted contrary to its duty of investigating in
the interests of justice. To the extent that the SIU failed to interview those departmental
officials identified supra, it cannot escape the criticism it faced in Vigario.
[90] The SIU did not interview, nor obtain confirmatory affidavits from, the Accounting
Officer, Prof Lukhe le, Lehloenya, members of the Health Procurement Committee,
members of the BEC, or the SCM officials who drafted the specifications and RFQs and
evaluated the quotations. Notwithstanding the fact that these officials were central to the
impugned procurement process and were best placed to explain the decisions taken, the
SIU elected to rely exclusively on documentary evidence and to draw adverse inferences
without the benefit of their accounts.
[91] The criticism articulated in Vigario cannot be overstated, particularly in light of the
acknowledged deficiencies in the procurement record in this matter. In the face of that
admission, it was not merely desirable but incumbent upon the SIU, in the proper discharge
of its investigative mandate, to interview those officials directly involved in the
of its investigative mandate, to interview those officials directly involved in the
procur ement proce ss and capab le of explain ing the decisions take n, the approva ls grante d,
and the manner in which the emergency deviation was invoked. The failure to undertake
such enquiries materially undermines the SIU's contention that the absence of documentary
35
evidence is indicative of non-compliance. Where the procurement record is admittedly
incomplete, the accounts of the officials concerned may constitute an important source of
evidence regarding the existence, approval, and implementation of any deviation from the
prescribed procurement procedures. In fact, the SIU's rush to conclude that the lack of
further documentation signified irregularity suggests an excessive eagerness to identify
flaws in the procedure.
[92] The authorities establish that the decisive question is not whether every procedural
requirement was perfectly documented, but whether there was compliance in substance
and, if not, whether any deviation was material in light of the purpose of the requirement
and the circumstances of the procurement. In Transnet SOC Ltd v Tipp-Con (Pty) Ltd and
Others, 14 relying on Altech Radio Holdings Pty Ltd and Others v City of Tshwane
Metropolitan Municipality, 15 and Allpay Consolidated Investment Holdings (Pty) Ltd and
Others v ChiefExecutive Officer, South African Security Agency and Others,16 the Courts
reaffirmed that public procurement processes are rarely flawless and that not every
procedural defect constitutes a material irregularity. The enquiry is whether the purpose of
the provision was achieved and whether the integrity, fairness, transparency,
competitiveness and cost-effectiveness of the procurement process were compromised.
Where those objectives are preserved, an irregularity does not justify setting aside the
procurement.
[93] Applying that approach to Treasury Regulation 16A.6.4, the evidence demonstrates
that a deviation was in fact authorised and implemented. The emergency circumstances
were recognised, quotations were sourced, the bids were evaluated before award, the Head
of Department approved the award, and a contemporaneous audit trail was preserved
14 Transnet SOC Ltd v Tipp-Con (Pty) Ltd and Others (797/2022) (2024] ZASCA 12 (3 1 January 2024) para 55.
15 A/tech Radio Holdings Pty Ltd and Others v City o/Tshwane Metropolitan Municipality [2020] ZASCA 122; 2021
(3) SA 25 (SCA) para 54.
16 Allpay Consolidated Investment Holdings (Pty) Ltd and Others v Chief Executive Officer, South African Security
Agency and Others [2013] ZACC 42; 20 14 (1) SA 604 (CC); 2014 (1) BCLR (CC) at para 22- 23.
36
through the procurement documentation. These facts show that the decision-makers
applied their minds to the emergency procurement process and that the substant ive
safeguards underlying the deviation regime were observed. On the totality of the evidence,
the existence of a deviation can be inferred from the conduct, approvals and procurement
steps undertaken, even if no stand-alone "deviation memorandum " is produced.
[94] In any event, the authorities make clear that the absence of a particular document is
not decisive if the purpose of the requirement has been fulfilled. Gong Lu Maintenance
Services (Pty) Ltd v City of Tshwane Metropolitan Municipality and Others11 confirmed
that courts must distinguish between genuine irregularities and mere failures of form, and
cautioned against elevating procedura l formalism over substantive compliance. Just as the
absence of written budget confirmation did not invalidate the procurement where budget
availability was otherwise established, the absence of a formal deviation record cannot be
material where the reasons for deviation existed, were considered by decision-makers, and
informed an approved emergency procurement process.
[95] This Tribunal in Special Investigating Unit v Kushesh Trading CC t/a Kushesh
Express and Others, 18 recognised that emergency COVID-19 procurement occurred in
conditions of urgency, disruption and administrative disorder, and accepted that lawful
deviation could be established from the totality of the evidence rather than from perfect
documentation. The Tribunal found that emergency procurement provision s authorised a
deviation and upheld the procurement notwithstanding documentary imperfections ,
emphasising that the ultimate question is whether the constitutional procurement principles
were satisfied.
11 Gong Lu Maintenanc e Services (Pty) Ltd v City qf Tshwane Metropolitan Municipality and Others (053301/2024)
(2025] ZAGPPHC 892 (21 August 2025) at para 11 .
(2025] ZAGPPHC 892 (21 August 2025) at para 11 .
18 Special Investigating Unit v Kushesh Trading CC tla Kushesh Express and Others (2025] ZAST 13.
37
[96] It is crucial not to lose sight of the fact that a distinction must always be drawn
between a transaction undertaken in an emergency, as in this matter, and one concluded in
the ordinary course of events. This distinguishes this matter from Allpay Consolidated
Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South African
Social Security Agency and Others, 19 where the Court, concerned with a non-emergency
situation, held that procedural requirements cannot be bypassed based on the outcome.
[97) This matter is also distinguishable from cases such as Special Investigating Unit v
TEPA Trading and Projects (Pty) Ltd and Others,20 where multiple substantive safeguards
were absent. Here, there was genuine competition among suppliers, quotations were
evaluated before the award, the lowest responsive quotation was selected, approvals were
obtained, and the procurement achieved its intended purpose. There is no evidence of
prejudice to other suppliers, manipulation of the process, or departure from the
constitutional values governing public procurement.
[98] Accordingly, the evidence supports either of two conclusions: first, that a deviation
was in fact present and authorised, as demonstrated by the contemporaneous conduct,
approvals and procurement record; or alternatively, that if there was any deficiency in the
formal recording of the deviation, it ought to be overlooked as immaterial irregularity. The
emergency nature of the procurement, together with the achievement of the underlying
purposes of Regulation 16A.6.4 and the preservation of fairness, transparency,
competitiveness and cost-effectiveness, render any documentary shortcoming one of form
rather than substance. Under the principles articulated in AllPay , Tipp-Con, Gong Lu
Maintenance Services and Kushesh, such a defect cannot invalidate the procurement.
19 Allpay Consolida ted Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South African Social
Security Agency and Others [2013) ZACC 42; 20 14 (I) SA 604 (CC); 20 14 (I) BCLR 1 (CC).
20 Special Investigating Unit v TEPA Trading and Projecis (Pty) Ltd and Others (MP02/2024) [2025] ZAST 20.
38
[99] The SIU further relies on the Respondents ' alleged failure to report the deviation to
the National Treasury and the Auditor-General within 10 working days, as required by
paragraph 3.5 of Instruction Note 5. I agree with the Respondents that this contention
amounts to a bare allegation, unsupported by any admissible evidence. In particular , the
SIU has failed to place before this Tribunal:
99.1 A confirmatory affidavit from the National Treasury or the Office of the
Auditor-General attesting that no such report was received;
99 .2 Evidence from the relevant accounting officer or chief financial officer
confirming that no report was submitted; and
99 .3 Proof that it requested, obtained, and exhausted the relevant reporting records
maintained by the National Treasury or the Auditor-General in order to verify
whether such a report had in fact been lodged.
[100] Ther e is furth er merit in the contention that the 10-day reporting requirement
constitutes a post facto oversight obligation rather than a condition precedent to the validity
of the procurement decision itself. Its purpose is to enable the National Treasury and the
Auditor-General to monitor instances of emergency procurement and, where necessary,
identify matters warranting further scrutiny or investigation. It does not operate to
invalidate a procurement decision that was substantively lawful when made. To hold
otherwise would elevate a reporting obligation, designed to facilitate oversight and
accountability, into a juri sdictional prerequisite for validity, notwithstanding the absence
of any indication in the Instruction Note that such a consequence was intended.
[ 101] In conclusion, in the absence of a record of deviation, and unless there is evidence
of corruption, improper interference with the RFQ process, or other wrongdoing by Ikati
Health or the Department, this Tribunal has no basis to intervene. It cannot rely on broad
consideration s of "the interests of justice" to excuse the SIU' s excess ive and poorl y
consideration s of "the interests of justice" to excuse the SIU' s excess ive and poorl y
explained delay. This approach is reinforced by the fact that the transaction substantially
complied with the constitutional requirements governing public procurement. Furthermore,
39
the SIU failed to prove that there was no record of an authorised deviation from the ordinary
procurement process.
Failure to Register on CSD for the Commodity to be Supplied
[ 102] The SIU's complaint is, in essence, that Ikati Health was registered on the CSD
under the commodity category relating to human health and social services and not that of
medical supplies. On that basis, the SIU contends that Ikati Health was not lawfully entitled
to supply medical or PPE-related goods, including thermomete rs.
[ 103] The contention above, however, warrants little consideration because in Special
Investigating Unit and Another v LNG (Pty) Ltd,21 this Tribunal considered and determined
that Instruction Note 5 of 2020/21 required only that suppliers be registered on the CSD
and did not impose a requirement for registration under a commodity-specific category.
The Instruction Note deliberately relaxed such constraints in response to the exigencies of
the emergency procurement environment.
[ 104] It follows that registration under a particular commodity classification was not a
prerequisite for participat ion in the procurement process. The fact that lkati Health was
registered under a category other than medical supplies is therefore of no legal
conseque nce. Accordingly , this ground of review is devoid of merit and falls to be
dismissed.
Failure to Apply the 80/20 or 90/10 Evaluation Formula as Contemplated in the
PPPFA
[ 105] This ground ofreview is entirely dependent on the success of the ground concerning
lack of author ised deviation. The SIU contends th at the D epartm ent acted unl awfully by
2 1 Special Investigating Unit and Another v LNG (Pty) ltd [2024] ZAST I at para 58.
40
failing to apply the 80/20 or 90/10 preference-point system prescribed by the PPPFA when
approving the third respondent's quotation . That contention, however, presupposes that the
procurement was requir ed to follow the ordinary competitive bidding process.
[ 106] The Respondents' case is that the procurement was lawfully conducted through an
emergency deviation under Treasury Regulation 16A6.4 and Nationa l Treasury Instruction
Note 5 of 2020/21. A procurement undertaken pursuant to a lawful deviation is not
conducted through a formal competitive tender process , but through alternative
procurement measures authorised for emergency circumstances.
[ 107] The emergency COVID-19 procurement framework permitted procurement by way
of quotations or negotiation and prescribed its own safeguards, name ly compliance with
the Department of Health specifications, adherence to National Treasury benchmark prices,
and supplier registration on the CSD.
[108] In those circumstances, the focus of the legality enquiry is not whether preference
points were allocated under the PPPFA, but whether the procurement complied with the
emergency procurement framework and the constitutional requirements of fairness,
equitability, transparency , competitiveness and cost-effectiveness under section 217 of the
Constitution. The Special Tribunal's decisions in Kushesh and Nozihle supra recognise that
emergency procurement during the COVID-19 pandemic operated within a distinct
regulatory framework designed to facilitate urgent procurement while maintaining
appropriate safeguards.
[ 109] Requiring full compliance with the ordinary PPPFA evaluation process , including
formal tender documentation, public advertisement, bid committee processes and
preference-point scoring, would have been inconsistent with the urgent circumstances that
justified the deviation. The emergency procurement regime was specifically intended to
permit expedited procurement where competitive bidding was impractical.
41
[ 11 0] Accordingly, if the respondents succeed on the deviation ground in establishing that
the procurement lawfully proceeded through the emergency deviation mechanism , the
premise of the SIU's PPPFA complaint faJls away. This ground therefore stands or falls
with the deviation ground. Once the deviation ground fails, the SIU's reliance on the PPPFA
preferenc e-point system becomes unsustainable. This current ground likewise falls to be
dismissed.
Whether the B-BBEE Status Played any Role in the Award to Ikati Health
[ 111] The SIU's allegation of fronting is difficult to sustain when consider ing the
procurement framework applicable to the award. Under the emergency deviation process,
the B-BBEE status conferred neither a preference nor any compet itive advantage. Neither
the PPPFA preference point system nor the B-BBEE pre-qualification requirements found
application. The award was determined with reference to the applicable safeguards , the
submission of the lowest responsive quotation, registration on the CSD, and compliance of
the products supplied with the Department' s prescribed specificat ions.
[ 112] In those circumstances , the suggestion that Ikati Health deliberate ly structured itself
as a 100% black female-owned entity in order to secure the award lacks any apparent
commercial rationa le. This matter is accordingly distinguishable from cases arising in
conventional competitive procurement processes, where B-BBEE status may materia lly
influence the outcome. Here, B-BBEE status was not a factor relevant to the award and
could not have affected the result.
[113] The evidence objectively establishes that Bathibang was the sole shareholder of
Ikati Health from its inception. The allegation is that the company was founded as a vehicle
for Bathibang 's professional and financia l advancement, with the intention that she would
ultimately assume its management. The arrangement between the late Keith Dodkins and
ultimately assume its management. The arrangement between the late Keith Dodkins and
Bathibang that the company income would contribute towards her maintenance and
42
education is consistent with legitimate enterprise development and mentorship. Viewed
objectively, the structure reflects genuine empowerment rather than artificial ownersh ip.
The Respondents contend that substantial Economic Benefits Accrued to Bathibang.
[ 114] Bathibang, so the argument goes, received substantial and sustained economic
benefits from the company, including salary, bonus payments and tertiary education
funding amounting to R682 253. These benefits were properly reflected in the company's
financial records and were received over an extended period. Such meaningful econom ic
participation is inconsistent with the concept of "paper ownership" and stands in contrast
to arrangements where a purported shareholder receives little or no financial benefit. On
the evidence, the flow of substantial economic benefits to Bathibang militates strongly
against a finding of fronting.
[ 115] The evidence presented by the Respondents may be true in certain respects;
however, substantial portions thereof are not. The allegation that Ikati Health funded all of
Bathibang's university expenses is only partially true. The documentary evidence from
North-West University, which remains uncontested before this Tribunal, demonstrates that
lkati Health paid only her tuition fees while the other part was covered by NSFAS.
Similarly, Bathibang confirmed the payment of a Rl 00 000.00 bonus only in a
supplementary affidavit, after the SIU had challenged the allegation. This confirmation of
the payment, however, is not supported by any bank statement convincing ly establishing
that such payment was indeed made and received by Bathibang. Furthermore, according to
Bathibang, the monthly salary of Rl O 000.00 was paid for only three months. Accordingly,
the financia l benefits alleged to have been received by her have been significantly
exaggerated. In addition, the annua l financia l statements upon which Keith Dodkins relies
exaggerated. In addition, the annua l financia l statements upon which Keith Dodkins relies
to substantiate these amounts have not been audited. Their probative value is therefore
diminished, rendering any reliance upon them untenable.
43
[116] Furthermore, while Bathibang's evidence demonstrates that she was formally
involved in all material strategic decisions affecting the company, including its
establishment, participation in the procurement process, acceptance of the award, supplier
arrangements, financial decisions, and staffing matters, such involvement appears to have
been more apparent than real. On the evidence before this Tribunal, her role was largely
confined to providing the requisite approval or signature after decisions had already been
formulated, rather than participating meaningfully in the negotiations or deliberations that
preceded them.
(117] I am also unable to ascribe the same significance to the Respondents' submission
that, while the late Keith Dodkins attended to the company's day-to-day operational
functions, Bathibang remained actively involved in governance and high-level decision
making. If by this statement the Respondents mean no more than that she was kept
informed of the manner in which Keith Dodkins managed the company, I would agree.
However, if the submission is intended to suggest that she possessed any real ability to
influence, direct, or alter the company's course, the evidence does not support such a
conclusion.
[118] The arrangement described by the Respondents is, in principle, commercially
orthodox where a shareholder is simultaneously pursuing tertiary studies and acquiring
business experience. The distinguishing feature in the present matter, however, is that
Bathibang does not appear to have acquired such experience through active participation
in the management or operation of the company. Rather, the evidence suggests that her
involvement remained largely forma l and retrospective, notwithstanding her position as
shareholder and director.
[ 119] Furthermore, while it is true that Bathibang's evidence demonstrates that she
participated in all material strategic decisions affecting the company, including its
participated in all material strategic decisions affecting the company, including its
establishment, participation in the procurement process , acceptance of the award, supplier
44
arrangements, financia l decisions and staffing matters, these could not have been
meaningful because it is clear that they only involved her signature and not her
participation in negotiations before her signature. I am not certain what the Respondents
mean when they state that while the late Keith Dodkins attended to daily operational
functions, Bathibang remained actively involved in governance and high-level decision
making.
[ 120] I agree that Keith Dodkins' exercise of signing authority over the company's bank
account is not incongruous with Bathibang 's ownership. Ownership and operational
administration are legally distinct concepts. The explanation that banking functions were
delegated to a more experienced individual while Bathibang comp leted her studies is both
plausible and commercially ubiquitous. It must, however, be emphasised that keeping
Bathibang informed of important developments and requiring her signature intermittently
does not constitute mentorship . Rather, it underscores the limited and peripheral nature of
her involvement in the business.
[ 121] It is understandable that if the company were to operate daily, it could not be run
remotely by an owner absent from the area where the business is carried out. So, Keith
Dodkins had to ensure that the company operated in person. However, Bathibang's being
informed of developments can hardly be regarded as indicative of mentorship and
operational support. The plain truth is that she was an insignificant participant.
(122] Having concluded that this matter falls within the emergency procurement
framework , and that its legality must be assessed within that context, the question of
whether the SIU has discharged the burden of proving, through objective evidence, that the
ownership structure was not genuine , that the economic benefits of the enterprise did not
accrue to Bathibang, and that the arrangement was designed to circumvent the B-BBEE
Act, becomes irrelevant.
45
[123] The above is so because B-BBEE compliance was not a prerequisite under the
emergency procurement regime. In those circumstances, the genuineness of the ownership
structure is not determinative of the legality of the award. It is therefore unnecessary to
consider the issue further. All said, while Ikati Health 's B-BBEE status is of no
consequence to the issues requiring determination, it cannot be overlooked that portions of
the evidence presented by the Respondents are not entirely truthful.
Failure to obtain Multiple Quotations based on Multiple A wards from One RFQ
[124] The SIU's case is that the Department failed to comply with paragraph 4.6 of
National Treasury Instruction Note 5 by not obtaining more than one quotation from more
than one supplier in respect of each award made to Ikati Health and other successfu l
suppliers. This allegation is difficult to comprehend in light of the SIU's own averment
that, of the two companies recommended, only Ikati Health was awarded the contract for
the supply of 5 000 thermometers at a value ofR4 475 000.00.
[ 125) Having made that allegation, the SIU then proceeds to contend that, by awarding
the same contract to more than one supplier in response to a single RFQ, the Department
effectively duplicated the RFQ specifications and quantities. This contention is
irreconcilable with the earlier allegation that only lkati Health received the award. The two
allegations are mutually destructive and cannot coexist. Either the contract was awarded
solely to lkati Health, or it was awarded to more than one supplier. Both propositions
cannot simultaneously be correct.
[126] The truth is that the procurement process followed a genu inely competitive
quotation course. Nine suppliers were invited to submit quotations, six responded , and the
lowest-priced compliant quotation was selected. This is perfectly in line with the provisions
of section 21 7( 1) of the Constitution, which provides that:
46
"When an organ of state in the national, provincial or local sphere of government, or any
other institution identified in national legislation, contracts for goods or services, it must
do so in accordance with a system which is fair, equitable, transparent, competitive and
cost-effective."
[127] The process followed in this matter plainly satisfied these const itutional
imperatives. The complaint that the procurement process was not competitive is therefore
unsustainable on the facts and contrary to the documentary record. This ground of review
is, like the others, devoid of merit and must accordingly be dismissed.
Unlawful Subcontracting
[128] The success or failure of this ground is dependent upon whether the emergency
deviation was lawful. If it was, the provisions of the PPPF A and the regulations
promulgated thereunder concerning subcontracting restrictions, including Regulations 6(5)
and 12, were not app licable. Those regulations are directed at competitive bidding
processes eva luated under the 80/20 or 90/10 preference-point systems envisaged by the
PPPFA.
[129] Where a lawful emergency deviation is invoked, procurement is governed by the
distinct emerge ncy procurement framework and its attendant safeguards. The App licant's
reliance on the PPPFA subcontracting provisions is therefore misplaced. According ly, this
ground of review, like the others, cannot be sustained and falls to be dismissed. It is so
dismissed.
[ 130] In light of this conclusion, it is unnecessary to determine whether Kat Laboratories
was, in law and on the facts, a subcontractor. That issue arises only if the PPPF A
subcontracting provisions were app licable. Having found that thos e provisions did not
apply in the context of a lawful emergency deviation , the question of whether Kat
47
Laboratories was a subcontractor becomes academic, and any finding thereon would have
no bearing on the outcome of this matter. This Tribunal therefore declines to decide it.
Excessive Pricing
[ 131] I find it extraordinary that the Department fixed the maximum permissible price for
a thermometer at R2 537.00 per unit, yet now contends that Ikati Health's quotation of
R895.00 per unit was excessive. On any objective assessment, that contention is difficult
to sustain. Ikati Health's quoted price was approximately 65% below the ceiling price
established by the Department itself and more than 50% below what the Department
anticipated suppliers might charge.
[ 132) The minutes of the BEC further reveal that lkati Health's quotation of R895.00 per
unit was the lowest-price d responsive quotation received. That contemporaneous market
evidence is inconsistent with the allegation that Tkati Health engaged in opportunistic or
excessive pricing. If anything, the fact that the successfu l quotation fell substantially below
the Department's own benchmark pricing strongly challenges any suggestion that the
procurement process yielded an exorbitant outcome. The complaint is therefore not borne
out either by the objective pricing data or by the comparative quotations considered during
the evaluation process.
[ 133] The SIU sought to link Keith Dodkins' representation of Bathibang as the sole
shareholder oflkati Health, and the alleged generation of excessive profits by both entities,
to its contention that the corporate veils of lkati Health and Kat Lab should be pierced.
Section 20(9) of the Companies Act 71 of 2008 empowers a court to pierce the corporate
veil only where it finds that "the incorporation of the company, any use of the company, or
any act by or on behalf of the company, constitutes an unconscionable abuse of the juristic
personality of the company as a separate entity". The term "unconscionab le abuse" includes
personality of the company as a separate entity". The term "unconscionab le abuse" includes
conduct that is unreasonably excessive, egregious, blatant, unscrupulous, or shows no
regard for conscience. It includes circumstances where the corporate structure is used as a
48
sham, device, stratagem, or to commit fraud, for a dishonest or improper purpose, or as a
fayade to conceal true facts.22
[ 134] In Butcher Shop and Grill CC v Trustees for the Time Being of the Bymya m Trust, 23
the court firmly rejected the notion that courts possess a general discretion to pierce the
corporate veil in the mere "interests of justice" absent fraud, abuse, or unconscionable
conduct. The Court held that as a matter of principle, there must at least be some misuse or
abuse of the distinction between the corporate entity and those who control it which results
in an unfair advantage being afforded to the latter.
(135] My earlier finding that lkati Health's B-BBEE status was immaterial and could not
have influenced the decision to appoint it negates any suggestion that its appointment was
procured through fraud or misrepresentation, or if there was, it played no role in the
appointment. Likewise, the evidence does not support the allegation of excessive
profiteering. The Department's benchmark price was R2 537.00 per unit, whereas Jkati
Health charged only R895.00 per unit. Besides, none of the other responsive bidders
tendered below lkati Health's bid. In those circumstances, any contention that lkati Health
made exorbitant profits is unsustainable. It too falls to be rejected.
Prejudice
(136] Having failed to establish the factual basis for its claim, the SIU fares no better in
demonstrating prejudice. Although prejudice is not, strictly speaking, decisive in
determining whether a delay should be excused, the nature and extent thereof remain
relevant to the exercise of this Tribunal's discretion. In assessing prejudice, the parties
ordinarily affected are the organ of state, the successful bidder, and the public.24 The
22 See Cel/ucity (Proprietary) limit ed v Garcia and Others [2025] ZA WCHC 55 1.
23 Butcher Shop and Grill CC v Trustees/o r the Time Being of the Bymyam Trust 2023 (5) SA 68 (SCA) at para 45.
24 See Transnet SOC l td v Tipp-Con (Pty) ltd and Others [2024] ZASCA 12 at para 47.
49
commercial prejudice suffered by Ikati Health as a consequence of the delay includes the
following:
136.1 Since August 2020, Ikati Health has been "red-flagged" and effective ly
prevented from trading;
136.2 The company is presently undergoing deregistration proceedings as a result
of its failure to file annual financial statements;
136.3 Its inability to secure additional tenders has deprived it of the income
necessary to sustain its operations; and
136.4 The corporate vehicle established to partially fund and facilitate Bathibang's
education and long-term professional development has, for all practical
purposes, been destroyed.
[137] The prejudice suffered by Ikati Health as a consequence of the SIU's delay is both
substantial and irreversible. Commercially , the delay has rendered the company effect ively
incapable of trading, resulted in its red-flagging and impending deregistration, deprived it
of opportunit ies to secure further tenders and generate income, and ultimately destroyed
the corporate vehicle established for the finance of Bathibang's partial education and long
term professional development.
[138] Evidentially, the prejudice is even more acute. The death of Keith Dodkins, the
central witness and controlling mind oflkati Health and Kat Laboratories, has permanently
deprived the Respondents of direct evidence concerning the establishment and operation
of the business structure, the supplier arrangements, funding transactions and profit
allocations. The passage of time has likewise resulted in the loss or deterioration of critical
financial and accounting records, substantially impairing the Respondents' ability to
reconstruct historical transactions, verify costs, and respond meaningfully to the SIU's
claim s, particular ly its claim for the disgorgcment of profits.
50
[139] The delay has further hampered the Respondents' ability to obtain third-party
records, verify procurement and logistics arrangements, and establish the bonafides of the
relationships underpinning the transaction. Collectively, these factors have materially
compromised the Respondents' ability to defend the proceedings and occasioned prejudice
that cannot now be remedied.
[ I 40] In contrast, the Department stands to suffer little, if any, prejudi ce should
condonation be refused. The contract concluded with Ikati Health was fully performed.
The goods were procured and delivered during a period of emergency, were accepted and
utilised for their intended purpose, and there is no suggestion that their quality was
deficient. Nor is there any indication that the Department paid excessive prices or failed to
receive value for money. Equally, the public has suffered no palpable prejudice. On the
contrary, the procurement achieved its intended objective of safeguardin g learners and
edm.:ators during the COVID-19 pandemic at a competitive cost. Weighing these
considerations against the substantial and irreversible commercial and evidential prejudic e
suffered by Ikati Health as a result of the SIU's delay, the interests of justice favour the
refusal of condonation.
Finality
( 141] Lastly, I agree that, following nearly four years of silence after the conclusion of the
investigation, Ikati Health was entitled to assume that no proceedings would be instituted.
The contract had been fully performed and payment completed by June 2020. The
investigation was finalised in May 2021. By April 2024, approximat ely three years after
the investigation had concluded, it was reasonable for the Respondents to regard the matter
as having reached finality. The public interest in finality assumes particular significance in
circumstances where:
141.1 The procurement occurred during a national emergency, namely the COVID-
19 pandemic;
SI
141.2 The goods were delivered , accepted and utilised for their intended purpose,
the protection of learners and educators· '
141.3 There is no allegation of corruption, bribery or political interference;
141.4 The pricing was competitive and approximately 65% below the applicable
benchmark maximum; and
141.5 The constitutional imperatives embodied in section 2 17 of the Constitution,
fairness, transparency, competitiveness and cost-effectiveness, were
substantially achieved.
[142] In these circum stances, the public interest is not served by reopening an emergency
procurement process some five years after its completion, where the goods were delivered,
accepted and used for the benefit of the public, and where no allegation of corrupt conduct
has been advanced. Rather, the interests of justice, legal certainty and finality weigh
heavily against overlooking the delay.
[143] For an undue delay to be excused, the interests of justice must favour condonation.
That enquiry necessarily requires a satisfactory explanation for the delay and a proper
consideration of the prejudic e occasioned as a result. In the present matter, significant
periods of delay remain unexplained notwithstanding that an explanation was plainly
necessary. Coupled with this is the absence of any material prejudic e to the Department or
the public should condonation be refused, contrasted with the substantial and irreversible
prejudi ce suffered by Ikati Health as a consequence of the delay.
[144] Moreover, this is not a case where the merits overwhelmingly favour the SIU to
justify overlooking its inadequate explanation for the undue delay. The merits do not
constitute an exceptional circumstance warranting the exercise of the Tribunal's discretion
in favour of condonation. In these circumstances, there is no cogent basis upon which this
Tribunal ought to exercise its discretion in favour of condonation. Against that backdrop,
condonation is refused.
52
Just and Equitable Remedy
[145] I considered whether, notwithstanding my refusal of the condonation , it was
necessary to determine the just and equitable remedy that would have followed had the
matter proceeded. I ultimately concluded that such an enquiry would serve no practical
purpose in light of the dismissal of the condonation application. Neve rtheless, the question
of whether this would have been an appropriate case for disgorgement remains of
significance.
[146] Had I found that Ikati Health was complicit in wrongdoing or had acted fraudulently
in relation to the Department, I would have applied the principle that a party should not
profit from its own wrongdoing and ordered the disgorgement of any unlawfully obtained
gains. However, in the absence of such a finding, and being bound by the decision of the
Supreme Court of Appeal in Mafoko Security Patrols (Pty) Ltd and Others v Mjayeli
Security (Pty) Ltd and Others supra, the principle of "no loss, no gain" cannot be applied
as a mandatory rule. The question of disgorgement must instead be determined with
reference to what is just and equitable in the particular circumstances, including whether
the supplier was complicit in the illegality.
[147) In the absence of any finding of corruption, fraud, dishonesty or other impropriety
on the part oflkati Health, Kat Lab, Adam Dodkins, Bathibang, or the trustees representing
the late estate of Keith Dodkins, there is no basis for piercing the corporate veil or imposing
personal liability upon them. The facts of this matter are, in material respects, comparable
to those considered by the Supreme Court of Appeal in Mafoko Security Patrols, where the
court emphasised that disgorgement and other remedial measures depend upon
considerations of justice and equity, including the extent of a party's complicity in the
impugned conduct. ln the absence of evidence establishing such complicity , neither
disgorgement nor the imposition of personal liability would be warranted. Against that
disgorgement nor the imposition of personal liability would be warranted. Against that
backdrop, I consider the following order to be appropriate:
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1. The review application is dismissed;
2. The SIU is liable for the costs of the Respondents , including those of two Counsel
where so employed.
Appearances:
For the Applicant: Adv J Motep e SC
Adv C Motsepe
Instructed by: Seanego Attorneys Inc
JUDGE BA MASHILE
MEMBER OF THE SPECIAL TRIBUNA L
For the Third to Eight Respondents: Adv T Lipshitz
Instructed by: Hamilton Attorney s
Date of judgment: 14 September 2026
Mode of delivery
This judgment is handed down by email transmission to the parties· legal representatives.
uploading on Caselines and release to SAFLil and AFRlCANLll. The date of delivery is
deemed to be 14 September 2026
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