—as balance for a botched M44 million medical equipment deal
—But DCEO says it is probing same deal for corruption
Moorosi Tsiane
A BOTCHED M44 million medical equipment supply deal has returned to haunt the government.
This after an Indian company went to court this week to demand what it claims to be an outstanding balance of M13 million for the medical equipment it ‘supplied’ to the Ministry of Health.
But the Directorate on Corruption and Economic Offences (DCEO) says it is investigating the same deal, amid allegations it was mired in serious corruption.
In 2018, the Ministry of Health under the political leadership of Nkaku Kabi, awarded a lucrative USD 3,018,159.75 (about M44,6 million) to Verobien Healthcare Private Limited, an Indian company that had been registered for just six months prior to clinching the deal.
Verobien Healthcare was contracted to “supply, deliver, install, commission, and maintain medical equipment” to various health centres across Lesotho.
The company had been registered just six months before it was awarded the lucrative contract, suggesting that it lacked experience and should never have been considered.
Verobien Healthcare had been registered in New Delhi, India on March 23, 2018 under the corporate identification number U74999DL2018PTC331460, with one Sanjeev Gupta listed as its sole director. It was then awarded the contract in Lesotho about six months thereafter in October 2018.
The Ministry of Health reportedly awarded the maintenance tender without following proper procurement procedures and under very dubious circumstances.
This led to a public spat between the then Health Minister, Mr Kabi, and his Principal Secretary Lefu Manyokole.
Mr Manyokole had just been moved to become Principal Secretary of Health from being Principal Private Secretary to then Prime Minister Thomas Thabane. After studying the deal, he promptly refused to authorize further payments to the company which had already received about M25 million for work it claimed to have done.
Mr Manyokole, among other things, found fault in the manner Verobien Healthcare had escalated its tender costs from M33.4 million to about M44 million. Mr Manyokole accused the company of inflating its claims for inland logistics from Maseru to delivery sites, among other things. Mr Manyokole also took umbrage with the company’s claims that it had supplied first class medical equipment.
He flatly refused to sign off further payments to the company, citing “corrupt inflation” of its costs. At the same time, Mr Kabi pushed for payment to the company and pushed Mr Manyokole to sign the necessary paperwork to effect payment.
After he refused, Mr Manyokole was then suddenly removed from the health ministry to become Cabinet Principal Secretary for Economic Affairs in the Prime Minister’s office, a demotion that he initially resisted but failed to forestall in the end.
The issue had caused a public uproar between Messrs Manyokole and Kabi, with the PS accusing the minister of being “deeply corrupt” for having facilitated the dubious M44 million deal. Mr Manyokole told the Lesotho Times at the time that he had become a victim for exposing Mr Kabi’s corruption.
Further payments appeared to have stalled despite Mr Manyokole’s removal. Now Verobien Healthcare has just filed court papers demanding about US US$712,730.75 (about M13 million), which it claims as the outstanding balance for its work. But the DCEO says it is probing the corruption allegations which underpinned the deal.
Speaking to the Lesotho Times this week, DCEO spokesperson ‘Matlhokomelo Senoko, confirmed that the anti-graft body is investigating the matter. However, Ms Senoko said she could not disclose the details of the probe as it was ongoing.
“Yes, we have such a case that is still under investigation, and unfortunately it is still too early to reveal what we have found out so far,” Ms Senoko said. “Once the investigations are completed, then we will know the way forward.”
Verobien Healthcare has nonetheless filed its case at the Commercial Court to compel the ministry to settle the M13 million balance.
It claims it entered into a valid contract, which has never been disputed, in October 2018 for the “supply, delivery, installation, commissioning and maintenance of medical equipment” across the country.
However, the ministry had failed to pay the agreed amount, prompting the company to take legal action.
The first to fourth respondents are Principal Secretary of the Ministry of Health Maneo Ntele, Health Minister Selibe Mochoboroane, the Ministry of Health, and Attorney General Rapelang Motsieloa.
Verobien’s representative, Dr Vineet Arora, contends that the company procured and supplied the required equipment as per contract and it was all received by the Ministry of Health.
According to Dr Arora, a technical team was also sent to install the equipment, and the company incurred costs. Still the ministry had not cleared the outstanding payment of US$712,730.75.
“On or around October 2018 the Applicant (Verobien) and the Ministry of Health entered a binding agreement for supply, delivery, installation and maintenance of medical equipment throughout the country of Lesotho and to the sites to be identified and made available to the Applicant by the Third Respondent (Ministry of Health).
“In furtherance of its obligations per the contract of agreement, Applicant procured the needed equipment and processed shipping and delivery of the same until it was received in Lesotho by the Ministry of Health. The supply of the referred medical equipment was followed by a technical team that was employed and transported to Lesotho by the Applicant at its cost….,” submits Dr Arora.
Furthermore, Dr Arora claims that while the company had begun installing the equipment, the Ministry of Health failed to provide access to other sites until the visas of the company’s technical team expired, forcing them to return home before the work could be completed.
“This unfortunate scenario meant the applicant had to pay the engineers their full engagement packages despite the work remaining incomplete,” Dr Arora submits. Still, he claims most of the work was done and completed.
“It is worth mentioning that delivery of equipment was completely done, but payment was partly made, inland logistics completely done but no payment received; delivery of additional equipment completely done but no payment received, and installation is 95 percent complete but no payment received,” Dr Arora submits.
“I liaised with various Lesotho Government officials to find a solution to this non-payment issue. The last of them was the legal officer who clearly showed that, as the Ministry of Health, they do not deny their obligations. Every possible means in our power to have this issue settled failed hence we opted for the legal route as herein done. The Respondents have no reason not to make payments as agreed. The Honourable Court will know that the amount owed by the Third Respondent is USD 712,730.75 which is the balance over the completed exercise by the Applicant.”
Dr Arora, therefore, wants the court to order the Ministry of Health to pay its outstanding contract obligations.
“…The Third Respondent (the health ministry) has kept promising to do that but to date no payment has been made. It is worth mentioning that through its officials, the Third Respondent has never denied liability. However, with passage of time without performance of their obligation, the Applicant is continuing to suffer financial loss in its business endeavour.
“There is absolutely no good reason why to date the Third Respondent has not performed accordingly in terms of the signed contract. The conduct of the Third Respondent constitutes breach of contract to which the First and Second Respondent are liable to rectify….
“The Honourable Court will know that per the agreement the total amount of the equipment was USD 3,018,159.75 per the invoice number VH/L5/MOU/2019/09 dated 6 May 2019 and the total cost of inland logistics per the agreement was USD 143,134.00. Out of the total amount of this, the Third Respondent only paid USD 244,563.00 with the balance of USD 712,730.75 as herein claimed. Despite numerous demands, the Respondents have failed, neglected and refused to perform their obligations by paying the Applicant as agreed,” Dr Arora submits.
Attempts to reach PS Ntene and Minister Mochoboroane for comment failed yesterday. However, it must be noted that even if they are cited as respondents, the scam occurred well before they joined the ministry. They only got their positions after the October 2022 general elections.
In a previous interview with the Lesotho Times, Mr Manyokole had expressed his concerns over the awarding of the contract stating that it had been “irregularly awarded”.
His outspokenness against the corrupt deal is what had led to his demotion from the Ministry of Health to the lesser post of Cabinet PS for Economic Affairs.
Mr Manyokole argued the contract costs had been inflated and the ministry charged much more than it should have paid.
Mr Manyokole’s battle with Mr Kabi, who is now leader of the opposition All Basotho Convention (ABC), had appeared spirited. He had described Mr Kabi as “deeply corrupt”.
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