Financial Mail

In hot water once again

The entity is back in the firing line over dodgy procuremen­t practices but Patel’s support is unwavering

- Claire Bisseker bissekerc@fm.co.za

The auditor-general’s (AG) finding that R128m of the competitio­n commission’s 2017/2018 expenditur­e was irregular has put it back under the spotlight.

It also raises the question as to why economic developmen­t minister Ebrahim Patel — who declined to institute an inquiry after an FM exposé in July – continues to praise the commission.

The FM reported that all was not well at the commission after being tipped off by a whistleblo­wer about bubbling dissatisfa­ction among its staff, the legal fraternity and the business community.

Sandton lawyers alleged that the Bryanston firm Ndzabandza­ba Attorneys, run by a former commission employee, was being handed a disproport­ionate amount of cartel work, while at the commission’s Pretoria head office, allegation­s swirled about nepotism and favouritis­m in appointmen­ts.

There were also mutterings over the commission’s top four executives being chauffeure­d by bodyguards in a fleet of BMWS.

A spate of court judgments against the commission — for lying to obtain search warrants, failing to abide by its rules and ignoring legal precedent in the high-stakes forarrogan­ce eign-exchange case against 23 banks — appeared to confirm that it was becoming increasing­ly highhanded towards business.

The accusation­s of favouritis­m regarding Ndzabandza­ba proved well-founded too. It was revealed that the firm had received 27% of the outsourced cartel work over the preceding 18 months, for which it had received R10.5m, or 63% of all the fees paid out, suggesting it was well remunerate­d. and unaccounta­bility at the commission,” says Cardo. “There’s increasing disregard for supply-chain management regulation­s and it would seem that an inner circle of favoured courtiers is channellin­g most of the forensic and legal advisory work without proper procedures being followed.”

The commission’s audit committee prefers to see the institutio­n

LAUDABLE, BUT . . .

At the time, the commission dismissed these complaints as opposition politickin­g, given that DA MP Michael Cardo had asked Patel for an independen­t inquiry — a request he has so far declined to acknowledg­e.

However, according to the

AG’S report, the irregular expenditur­e of R128m incurred by the commission during 2017/2018 included R51.3m relating to supplychai­n management irregulari­ties. The commission did not follow proper tender and procuremen­t processes for dawn raids or in the use of forensic, legal and economic experts in the prosecutio­n of cases.

Moreover, the commission’s case-related legal costs climbed more than 80% to

R85.2m in 2018 compared to R46.7m the year before. In the same period, its security costs soared from R1m to R16m.

Overall expenditur­e rose 15%, or R54m, resulting in a R69m deficit for the 2017/2018 financial year.

This was on top of the previous year’s R78m deficit, which all but wiped out a surplus built up over many years. The commission’s total liabilitie­s now exceed its assets by almost R35m.

“The AG’S findings underscore that there’s a growing culture of as a victim of a growing workload and mandate, claiming management took “extraordin­ary measures” to limit the deficit by scaling down case work, curtailing noncritica­l activities and insourcing.

To be sustainabl­e, the commis-

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