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Limpopo company accused of overcharging municipality by R76m lodges complaint about SIU

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Limpopo company accused of overcharging municipality by R76m lodges complaint about SIU

Public Protector House

14th June 2022

By: News24Wire

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A Limpopo company embroiled in a bitter showdown over R76-million allegedly overcharged to the local municipality, has lodged a complaint with the Public Protector about the apparent "misuse and abuse of power" by the Special Investigating Unit (SIU).

The SIU had made a finding that Mphaphuli Consulting (Pty) Ltd should pay back R76-million which it overcharged the Greater Fetakgomo Tubatse municipality when contracted to roll out the multi-million rand electrification project in the area.

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At the core of the complaint to the Public Protector lies the manner and the process which led the SIU to launch an investigation around the contract and the subsequent finding to pay back the R76-million.

In the complaint document seen by News24, the company stated that the SIU appeared to have been lobbied by the mayor and municipal manager to investigate its affairs after the municipality lost a court appeal over unpaid invoices totalling R49-million.

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"This is so, especially taking note that in a briefing of 16 March 2017 by the municipal manager, he complained about the Polokwane High Court judgment. Some three days after the Supreme Court of Appeal judgment, the municipality approached the SIU to conduct forensic investigations on Mphaphuli Consulting," the complaining company said.

They added, "Despite knowing that the disputes between Mphaphuli Consulting and the municipality were adjudicated by the courts, the SIU persisted in claiming that the investigations of Mphaphuli Consulting were based on the SIU's Proclamation R52 of 2014 for the Greater Tubatse municipality."

"The information demanded by the SIU was not in the scope described in the schedule of the proclamation. The SIU was not authorised to investigate matters that were not referred to it by the president and stipulated in the proclamation," the company said.

They also complained that the SIU played an advisory role to the municipality which resulted in the municipality cancelling the contract without stating the alleged malfeasance, but alleged contractual breach.

They alleged the SIU had not identified the political office-bearer or official of the municipality who deliberately authorised the "the overcharging". The SIU continued to create a negative public narrative of overcharging by the company, they further claimed.

The company's chief executive officer, Lufuno Mphaphuli, confirmed the lodging of a complaint with the Public Protector.

"The manner in which the SIU continues with the negative narrative affects future business dealings of the company. It appears I'm being punished for winning in court," he said.

The Office of the Public Protector confirmed receipt of the complaint. It said the matter was receiving attention.

SIU spokesperson Kaizer Kganyago said the matter cannot be commented upon as "it is before court". 

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