MP RESIGNS FROM COMPANY IN E72.6 MILLION ICC TENDER

MBABANE – Hhukwini MP Nkhanyeti Ngwenya resigned from Destiny Group seven months ago.

He was a director of Destiny Group Propriety Limited. In 2016/2017, Destiny entered into a joint venture with BXB/EOH to supply and install electronics at the International Convention Centre (ICC) in Ezulwini. The partnership is known as BEB Joing Venture (JV). In an interview, MP Ngwenya said he was not a director of Destiny in 2018 when he was elected by the people of Hhukwini to be a legislator. He said he made the disclosure when he became the director. This was post-2018 elections. He said he was not a shareholder to assume ownership of Destiny, but merely a director. “You can be a director of a company even if you don’t own it,” said MP Ngwenya. “I did not have shares.” He said the tender at ICC was not based on an agreement with government, but the KISS Joint Venture (JV), which was the trio of Kukhanya Civil Engineering, Inyatsi Construction and Stefanutti Stocks.

contract

He said the DEB was a subcontractor to the KISS Joint Venture. KISS Joint Venture had a contract with the Government of Eswatini. It must be said that it was the Ministry of Economic Planning and Development that engaged the engineers to evaluate the tenders that were submitted for the installation of electronics at ICC. The actual money spent on the ICC project as at March 31, 2021, is E2 255 983 000 and the total estimated cost of the project is E4 484 109 000. The Five-Star Hotel (FISH) is estimated to cost E2 580 086 000 and its current expenditure as at March 31, 2021 stood at E1 846 439 000. Asked on why he had to resign from a company that appeared to be doing well in the market, the Hhukwini MP who happens to be the current portfolio committees’ chair of chairs said there was nothing untoward about his resignation. “You become or you decide not to become a director,” he said. He resigned on July 21, 2022.

For other politicians’ information, it is stated in Section 97 (1) (g) that a person does not qualify to be appointed, elected or nominated as the case may be, a senator or member of the House if that person –
is a party to, or is a partner in, a firm or a director or manager, of a company which is a party to any subsisting government contract and has not made the required disclosure of:
(i)     the nature of the contract;
(ii)     the interest of that person in the contract;
(iii)     the interest of that firm or company in the contract.

According to the Constitution, the elected members of the House shall make disclosure to the Speaker while senators should report their relationship with companies to the Senate president. This is not enough as the supreme law provides that the disclosure shall be posted conspicuously for a period of at least one month within the Parliament building. In terms of the Constitution, government contract means any contract with the government for or on any account of the public service, the consideration for which exceeds E5 000 or such other amount as Parliament may prescribe or which forms part of a larger transaction or series of transactions in respect of which the amount or value or the aggregate amount or value of the transaction exceeds E5 000.

Section 60 (2) of the Public Procurement Act of 2011 provides that public officers and politicians shall not participate as tenderers in public procurement. Subsection (1) states that all public officers and politicians who have responsibilities for procurement shall:
(a)     Always act in the public interest and in accordance with the objectives and procedures set out in this Act and public procurement regulations;
(b)     Exercise powers and discharge duties for a proper purpose consistent with their responsibilities and with the degree of care and diligence that a reasonable person would exercise in similar circumstances;
(c)     Discharge duties impartially so as to assure fair competitive access to the public procurement by tenderers;
(d)     Not use their position or information obtained because of their position improperly to gain advantage for themselves or someone else or cause a detriment to a procurement activity or decision; 
(e)     Not interfere with or exert undue influence on any person to affect a procurement activity or decision;
(f)     At all times, avoid conflicts or interest and the appearance of conflict of interest.

Asked if he was aware that MP Ngwenya was a director of a company that has a government contract through a joint venture, Dr Tambo Gina, the Minister of Economic Planning and Development, said such information was ‘news’ to him. “I am honestly not aware that he is a director of the company you have just mentioned to me,” the minister, who was in the Democratic Republic of Congo (DRC) could only say in a brief interview. Destiny’s face has been Tom Lin, the Managing Director and Director. Lin advised the Times SUNDAY to contact the main project management team or government for any updates or clarity.

Among other things, he had been asked about its joint venture with EOH, which was beleaguered in corruption accusations in South Africa. This resulted in EOH being hauled before the Judicial Commission of Inquiry into Allegations of State Capture, Corruption, Fraud in the Public Sector, including Organs of State, better known as the Zondo Commission or State Capture. Speaker Petros Mavimbela said he was not quite sure who declared his assets and directorship in 2018, but there were some MPs who did.

difficult

“It’s difficult to single out a name because that was done through the office of the clerk,” the Speaker said. Benedict Xaba, the Clerk to Parliament, said MP Ngwenya did submit a letter of declaration on his position with Destiny. He said he did not actually recall when he submitted the letter. He did not respond to the question on why such declarations were not posted conspicuously for at least a month within the Parliament building. In another development, the installation of electronics at the ICC was expected to cost government a sum of E72.6 million. The tender was given to the BXB/EOH & Destiny JV. In his affidavit to the Commission of Inquiry into the State Capture in South Africa, marked ‘Flow of Funds – Exhibit W1’, Stephen van Coller, the new Chief Executive Officer of EOH, declared that there was indeed an over-pricing of services to the National Treasury. To solve the problem, it signed an agreement with the Special Investigating Unit to repay E42 million to the Department of Defence.

According to the affidavit, the new management, under van Coller engaged a law firm, ENSafrica to institute an enquiry, which unearthed wrongdoing that included the following:
* Artificial/inflated software licence sales;
* Potential tender irregularities;
* Use of politically connected middlemen who are suspected to have been used as introducers and sales agents;
* Payments of E1.2 billion made to subcontractors and no evidence that work was done;
* Suspicion that potential irregular payments could stand at approximately E865 million.

EOH whose revenue was E11.28 billion in 2020, with its operating income at E2.5 billion, is one of South Africa’s largest technology companies. Its subsidiaries include; EOH Mthombo (Pty) Ltd, EOH Network Services, Rothwell International and Mehleketo Resourcing (Pty) Ltd. The current Chairperson of EOH Holdings is a liSwati and former civil servant Andrew Fana Bambaphansi Mthembu, who joined the Board in 2019. However, he resumed his chairmanship duties in February 2020. It has been also been discovered that there is no mention of the Eswatini project in EOH’s financial records from in 2016-2020. In its restructuring process, EOH is now suing its own founder and former CEO Asher Bohbot and Chief Financial Officer E1.7 billion in damages apiece of their alleged failure to effectively deal with management breaches.

In August 2022, it was reported that EOH was being sued E136 million by liquidators of one of its subsidiaries, Mehleketo Resourcing. On the other hand, BXB Electronics, which is part of the JV, is a company based in Taiwan. It is a manufacturer and exporter of PC and conference systems, specialising in IP camera, intrusion detection, intercoms, transmission, among other things.   

established

It has been established that BXB/EOH & Destiny submitted a successful tender to the Eswatini Government, which was represented by the Ministry of Economic Planning and Development. This was in 2016. The project is still ongoing at the ICC in Ezulwini. It could not be established if EOH is still active in the JV, but projects it executed in South Africa were used to back up the tender document submitted to the Eswatini Government. The projects, at that time, which it listed in the tender document, were worth E18 million. Those who are privy to bidding said the tender was awarded to the JV and the audit is carried out on the basis of it. In fact, they said the job was awarded on the basis of the JV. Its business profile is said to have given weight to the bid for the job. It has to be revealed that the projects undertaken by EOH, which were included in its references were; the fixing of the network cabling, data services, renovations and maintenance of BP Chevron.

It also worked on cabling, maintenance and data centre services for Paarl Media. The tender evaluators remarked: “Based on the magnitude of the projects they have completed and those they are currently busy with, this tenderer is considered capable of successfully undertaking and completing the project on time, if awarded.” There was a concern though by the engineers evaluating the ICC tender that BXB/EOH & Destiny did not provide completion dates for the projects. Initially, funds that were availed for the ICC electronic project amounted to E58 527 501.59. However, the two tendering companies proposed figures that were above the available funds. Commit/Fure-Lin Engineering submitted a tender price of E125.9 million, while BXB/EOH & Destiny JV fixed theirs at E72.6 million.

declaration

In their declaration, the engineers evaluating the tenders recommended the acceptance of the JV of BXB/EOH & Destiny for the sum of E72 603 090.59. This was inclusive of value added tax (VAT), which was to be charged at E8 916 169.02. The price (E125.9 million) submitted by Commit/ Fure-Lin Engineering JV, which competed with BXB/EOH & Destiny was 88 per cent above the engineer’s estimate. The price (E72.6 million) submitted by BXB/EOH and Destiny JV was nine per cent above the engineer’s estimate. This was attributed to currency fluctuations, which could exert upward pressure on tender prices. It was said that components in the scope of work were largely imported. In its conclusion with regard to pricing, the tender evaluators said the price submitted by Commit/ Fure-Lin Engineering Company JV was excessive. Consequently, they opted for BXB/EOH& Destiny JV.

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