Blacklisted Contractor Gets R776.8m Contract
the true scale of bungled pharma contracts
- Husband and wife team of Chen-Yen Wu and Li-Jung Wu, created a ‘fronting’ company that won a multi-million rand tender to supply condoms and lubricants to the health department, even though Treasury had blacklisted the couple and all their associated companies up until October 2023.
- The couple owns at least a dozen companies and is under a Treasury probe for tax fraud, money laundering, identity theft and other public tender-related crimes.
- The health department’s tender committee failed to discover or ignored obvious links between Li-Jung Wu and fronting company Medi-Core Technologies, which bid and topped the list of suppliers in tender
- Incompetent or corrupt government officials are costing taxpayers millions of rands through suspect procurement processes
uSpiked can now exclusively reveal that a KwaZulu-Natal company, which is closely associated with a couple that has been under investigation by the Ministry of Finance, is the latest beneficiary of a R776.8m tender for condoms and lubricants.
When we first exposed the condoms and lubricants contracts that had been inflated by R1.9 billion, we raised four concerns; 1) why was the Department of Health procuring lubricants for use with already lubricated condoms, 2) why Joseph Lionel Morris’ company Barrs Medical (Pty) Ltd bid successfully despite presenting a questionable BEE Certificate and 3) why the department’s tender committee let it slide when Morris presented a Supplier Code belonging to another legally independent provider 4) why the value and quantity of lubricants had been inflated.
Of those four concerns, the department has only addressed the last two.
As the Department’s Deputy Director-General for Health Regulations and Compliance, Dr. Thamizhanban (Anban) Pillay, was pulling all stops to ensure that our team did not get hold of the BEE Certificates for Morris’ four companies - Sekunjalo Investment Corporation (Pty) Ltd, Barrs Pharmaceuticals Industries (Pty) Ltd and Barrs Medical (Pty) Ltd - officials quietly assigned a new Supplier Code to Morris’ latest tender-player, Barrs Medical (Pty) Ltd.
Soon after we published details of the amended contract last month, we received another unusual lead to follow up. The tip was unusual in that it came through an encrypted image file. After decrypting the file, it turned out to be information buried in a binary code that was further embedded on a matrix code. Casual lookers would have dismissed the information contained within the zeros and ones, but we didn’t.
As we were about finished with encoding of the information, we received another communication from Durban that ultimately made sense of the information contained in the codes. The codes contained a series of ID numbers and names.
The saga begins somewhere in The People’s Republic of China and Korea (depending on what is at play), Durban then at the Ministry of Finance in Pretoria, back to Durban and finally at the department of health’s headquarters in Civitas Building in Pretoria.
The main players in the initial narrative were Chen-Yen Wu and his wife Li-Jung Wu whose nationality, depending on whom we asked, was Chinese, Korean or South African.
What is not well known about Chen-Yen and Li-Jung is that they are the subjects of a long-running investigation by the National Department of Finance. Anyhow, on October 1, 2009, Treasury’s investigators successfully placed Mrs. Li-Jung Wu and all her related companies on a ‘Database of Restricted Suppliers’ for fourteen years till October 31, 2023.
The couple jointly and separately owns many companies that are now subject to the restriction. These include:
Juel Health (Pty) Ltd 2004/009317/07
Pitter Patter Trading & Investments cc 2006/168073/23
Theratech Supplies cc 2005/083795/23
Africa Blue Dragonfly Hygiene Appliance (Pty) Ltd 2008/025267/07
Bakgotsi Medical Consumables (Pty) Ltd 2008/010123/07
Bioceans Technologies Africa cc 2010/068926/23
Egoli Hydraulics cc 2007/180368/23
Wupro (Pty) Ltd 1997/021845/07
Wupro Technologies (Pty) Ltd 2005/033080/07
Bathathe Health (Pty) Ltd 2007/034203/07
Lidamed Technology cc 2005/125781/23
Julan Trading & Investment (Pty) Ltd 1997/014182/07
uSpiked made an editorial decision not to provide all the details pertaining to Treasury’s investigations that are now in our possession, but we can confirm that Chen-Yen and Li-Jung are being investigated for possible multiple cases of tax fraud, money laundering, identity theft and other tender-related crimes. We can also confirm that the couple has been operating in the country using at least two sets of identity documents. Chen-Yen Wu uses ID Numbers 650322 5118 186 and 650322 5218 087. Li-Jung Wu has ID Numbers 660614 0791 185 and 660614 0791 086.
When Treasury was placing her on the database of restricted suppliers, someone at the Department of Health altered the entry for the ID Number which now reads 660614 0791 086. It is not clear whether this wrong entry was deliberate or a human error by the official(s). And instead of providing her full names, she was simply listed as L. Wu.
Our confidential sources at the Treasury informed us that the blacklisting was a temporary measure by the department to ensure that the public does not lose any funds when the investigations are ongoing; “if allowed to win lucrative state contracts, they would use public money to fight any subsequent legal battles…” But the blacklisting move hasn’t stopped the couple from successfully bidding for public contracts, as we can now reveal.
Mr. & Mrs. Wu could not have survived Treasury’s investigations into their affairs without some help. In some of their registered companies, they have as directors some civil servants. One such is a fifty-seven year old Lorna Mpolai Tlabyane, who has since ceased to be a director or Wu’s Bathathe Health (Pty) Ltd.
In 2013, the couple, in what appears to be a comeback to the lucrative public medical supply arena thought up a dubious plan to beat the Treasury system. They incubated a new entity, Medi-Core Technologies (Pty) Ltd - 2013/198711/07, through which they planned to bid for public contracts. Had their names been listed under the new company the sanctions against them would have been hard to maneuver, and so fronting seemed perfect. To their rescue came Moonilal Hansraj Seopursat, one of their longest serving employees.
According to information and records confidentially made available to uSpiked’s team, Seopursat has been in Wu’s employment for the past decade. What we don’t know is how Mrs. Seopursat, also listed as a director of Medi-Core, was convinced to get aboard a company she knew they didn’t own. But it appears the Wu’s either blundered or didn’t completely trust the Seopursats. During registration of Medi-Core Technology in 2013 the business addresses provided were those known to be of Mr. and Mrs Wu - PO Box 446, Hyper-By-The-Sea, Durban, 4053 and 19 Nyala Road, Canelands, Verulam, 4339.
By simply sharing operational addresses, some red flags should have gone up the moment the new kid on the block submitted its bids to the department of health for consideration. So why didn’t Dr. Pillay’s Unit (the department’s tender committee) pick this up when Medi-Core submitted its bid for the Condoms and Lubricants contract, HM01-2015CNDM?
When we raised these findings and concerns with the department’s top brass, the department’s fixer, Thamizhanban Pillay, tried to come forth with a response.
His response left the department more exposed: “Fronting is a serious offence in terms of our conditions of contract and where we identify such an offence we will apply the necessary remedies.”
Having confirmed that fronting is an offence, Pillay let us into the outcome of his ‘investigations’ that had taken less than thirty-six hours. “I have not been able to identify any evidence to support the suggestion that Medi-Core Technologies (Pty) Ltd., is owned by Mr. Chen-Yen Wu. The certificate from the CIPC does not list Mr. Chen-Yen Wu as a director.
[It wouldn’t be called fronting if the ‘official records’ were to reveal the shadowy owners. Editor]
We can further confirm that as we were going to production, Dr. Pillay had made no requests (formal or otherwise) to the South African Revenue Services for access to Seopursat’s personal income tax returns that would show who exactly was listed on his latest IRP5 as his employer. For Pillay, the matter is closed.
Another entity closely linked to the Wu couple is Jiaxing U-Life Medical Device Technology Co. Ltd., based in the Chinese province of Zhejiang. Our Hong Kong contact established that Mr. Wu founded the company in 2009. It claims to be trading and running warehousing facilities in Johannesburg and in several cities in China.
Jiaxing U-Life Medical Device Technology Co. Ltd cannot be traced on the database of the Ministry of Commerce of the People’s Republic of China and neither is it registered with the Companies and Intellectual Property Commission (CIPC).
We have further been unable to establish the exact locations of the Johannesburg sites of the Warehouses and Workshops.
Unverified and unconfirmed claim is that while submitting their bids, Medi-Core Technologies (Pty) Ltd had provided details of Jiaxing U-Life Medical Devices Technology Co. Ltd as their manufacturer of condoms as required by Section 9 of the Contract Circular (Authorisation declaration and documentation of undertaking). The department evoked confidentiality hence the inability to confirm who are the principal manufacturers provided by Medi-Core Technologies.
How many other suppliers are being used as fronts? And why is the department’s DDG under whom procurement matters fall so quick to go on the defensive? See Editorial.