MTN SA loses tribunal case over COVID-19 mobile device supply

MTN South Africa has lost a Special Tribunal exception application for an alleged irregular supply of mobile devices for COVID-19 screening to the Department of Health in the country's Limpopo province.

The loss comes after South Africa's Special Investigating Unit (SIU) launched a probe into the affairs of the department. It exposed that the telco allegedly made an unsolicited proposal to supply the department with 10,000 mobile devices intended for COVID-19 mass screenings in that province.

"This proposal cost the department R10 million (US$540,000). This falls outside the prescripts of the Public Finance Management Act (PFMA). The department of health accepted the proposal and subsequent delivery of the devices," the SIU explained.

"The SIU's investigation also found that the former Head of the Department, Dr. Thokozani Florence Mhlongo, as the accounting officer, allegedly exposed the Department to a wasteful expenditure when she authorized the procurement and payment of 10,000 cellphones to the value of R10 million for COVID-19 household screening," the SIU continued.

The SIU said the department could only manage to distribute 388 of the 10,000 cellphones between September 2020 and March 2021, and the cellphones were distributed without the required screening application.

"The SIU has instituted a civil action in the Special Tribunal to review and set aside the contract and recover financial losses suffered by the Limpopo Department of Health," it added.

So far, the SIU said it has successfully interdicted the pension payout of Dr. Mhlongo after she resigned from her position as head of the department in the face of disciplinary action.

"The SIU is also empowered to institute civil action in the High Court or a Special Tribunal in its name to address any wrongdoing uncovered during investigations related to acts of corruption, fraud, or maladministration," the SIU continued.

"In line with the Special Investigating Units and Special Tribunals Act 74 of 1996, the SIU refers any evidence of criminal conduct it uncovers to the National Prosecuting Authority for further action," it concluded.

MTN responds

Responding to the allegations, MTN SA told Connecting Africa via email that it can confirm that it submitted the proposal to the Limpopo Department of Health (DOH) for the supply of the 10,000 cellphones, and that the proposal was accepted in April 2020.

"MTN supplied the devices and DOH paid for the devices accordingly," an MTN spokesperson said.

MTN said the SIU issued summons against the then Limpopo DOH Director General and MTN, claiming that payment made to MTN was fruitless expenditure and that MTN must be disgorged of profit it made from the transaction.

MTN SA CEO Charles Molapisi. (Source: MTN SA)

"MTN applied for exception of the summons on the basis that they did not disclose a cause of action and they never alleged anything unlawful and unconstitutional done by MTN. The Special Tribunal dismissed MTN's exception application," MTN SA added.

"We are now considering the summons on the merits of the case and will prepare MTN's plea in answer to the summons," the telco said.

will be interesting to see how the telco navigates these recent allegations in South Africa.

The pan-African operator has faced challenges in other markets, like its offices in Guinea-Conakry being sealed by the local post and telecommunications regulator in January 2024 over a licensing payment issue.

The telco recently appointed new executives in Nigeria and Congo-Brazzaville.

— Matshepo Sehloho, Associate Editor, Connecting Africa