business

Sept. 27, 2019

METRO REPORTER

7 min read

Gupta stench hits again

Gupta stench hits again

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MASERU – The controversial Gupta name has sprung up again in the granting of a number of multi-million Maloti government tenders, fuelling allegations of underhand maneuvers that have been synonymous with the super-rich Indian business family.

It emerged earlier this year that a massive Gupta-linked tender was at the centre of corruption allegations thrown by senior health ministry officials, in relation to a deal with an Indian company for the supply of medical equipment.  The Guptas are an Indian family whose members Prime Minister Thomas Thabane’s 2012 administration roped in to help advance the country's economic interests abroad.

Mr Thabane had issued diplomatic passports to Atul Kumar Gupta, his nephew Essa Omar Aziz and a third unidentified member of the family after he appointed them as his economic advisors with a mandate to help him market Lesotho abroad and recruit investors.

Despite facing a myriad of corruption charges in neighbouring South Africa at that time, Mr Thabane told the country’s media outlets that “these people (the Guptas) are good friends of the African National Congress (ANC) and we have good relations with the ANC”. Mr Thabane’s successor, Prime Minister Pakalitha Mosisili, decided to revoke the diplomatic passports issued to the Gupta family members upon assumption of office.

This paper has established that an Indian-based company run by the Gupta family has won a tender to help Lesotho with its national irrigation master plan.

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The company, WAPCOS Limited, is led by Rajinder Kumar Gupta as managing director and is touted as a specialist in harnessing and leveraging water and power for empowering people with innovative, cost-effective and eco-friendly solutions. Lesotho obtained USD50 million (about M745 million) from the World Bank last year for its national irrigation plans. The total cost of the project is USD57 million (about M849.3 million).

The Principal Secretary in the Ministry of Agriculture, Mr Malefetsane Nchaka, said the country was up in arms to support the production of food through irrigation schemes, hence the engagement of a foreign company to effect the plan. Mr Nchaka said the company was going to guide them with which plans were appropriate for the Lesotho irrigation scheme based on the ecological zones of the country. He said WASCOP had already submitted an inspection plan, and its team of representative would be in Lesotho on October 8. Mr Nchaka maintained, however, that the company won the tender openly and fairly after its competitors failed to impress.

While any tinge of corruption in the awarding of the agricultural tender is denied, this paper can further reveal that the Gupta name resurfaced earlier in the awarding of another government tender with the Ministry of Health in September 2018 awarding another Gupta-linked Indian-based company, Verobien Healthcare, a M33.4 million tender to supply the government of Lesotho with medical equipment.

It has further been established that Verobien Healthcare is co-owned by Sanjeev Gupta, while unrelated to the prominent and controversial Gupta brothers Tony, Atul and Ajay, Sanjeev is closely linked to the Gupta family that his daughter Esheetaa worked for the Guptas’ Sahara Computers as IT analyst. 

Sanjeev’s daughter is one of the Indians that fraudulently acquired a work permit in South Africa, according to the country's media reports. At the time the ministry of health awarded the tender to Verobien Healthcare the company was only six months in existence, per its own website which states that the company was only incorporated on March 23, 2018. Verobien was four months in existence when they bid for the tender in July of the same year, with sources within the ministry alleging that the company was awarded the tender under very controversial circumstances. 

Verobien Healthcare was among a number of other companies that received a call to tender for the job after the ministry decided that the job would be bidden under what is called Limited Tendering.

Limited or restricted tendering is a procurement method that limits the request for tenders to a select then number of suppliers, contractors or service providers. Although considered a competitive procurement method, competition is limited to only shortlisted or invited companies selected by the procuring entity.

A basic characteristic of this method is that competition is confined to a certain number of companies, either because only a few firms are qualified to fulfill the specific type of requirement, or certain conditions warrant the use of a limited number of firms in order to reduce the time and cost of the selection process.

It is, however, not clear how the Ministry of Health verified the competencies of the then four-month-old company based in India.

Following engagement Sanjeev has since signed a document altering the original agreement, titled Addendum No. 2 to Agreement between the Ministry of Health (MOH) and Verobien Healthcare Private Limited for the Supply, Delivery, Installation, Commissioning and Maintenance of Medical Equipment.

The addendum was on May 19 co-signed by former ministry of health Principal Secretary, Lefu Manyokole, agreeing to the increase of the tender price from M33.4 million to M40.1 million. 

Messers Gupta and Manyokole agreed in the addendum that “the price increment of this tender value has increased to M40, 138, 360. In addition to this, M1, 150, 000 for supply of additional equipment, consumables and spares, has also been approved and will be paid along with the balance payment.” 

The addendum further indicates that the costs for the inland logistics from Maseru to final delivery points and labour (excluding warehouse storage cost) of M1, 975, 250 remained the same and that 15 percent of value added tax (VAT) on the total shipment value will be paid out by the Ministry of Health. 

The agreement also states that the balance amount after excluding amount payable through Line of Credit, will be paid out to Verobien Healthcare through direct bank transfer to Verobien Healthcare’s bank account in India as per schedule below: 

  • 90 percent of this balance amount within 15 days from the date of shipment reaching Maseru
  • Remaining 10 percent of this balance amount within 15 days from the date of installation and commissioning of equipment. 

“This addendum shall enter into force upon signature of both parties. In witness whereof, the parties hereto have caused this addendum to be executed as of the date of signature,” read the agreement. 

The agreement was signed by Mr Manyokole and witnessed by Ministry of Health Procurement Manager Tsietsi Mosae on behalf of the government of Lesotho while Gupta signed on behalf of Verobien Healthcare and was witnessed by of the company director – Dr Vineet Arora. 

These developments emerge while only a few weeks back Mr Manyokole  told a  local media outlet he had flatly refused to sign and approve the alleged increase to the original tender price, claiming he had informed the Minister of Health, Nkaku Kabi, that while the contract allowed for price escalation of a maximum 17 percent, the actual increase claimed by Verobien Healthcare was in fact more than 20 percent,  fleecing  the Lesotho government  of more than four million maloti.

Mr Manyokole said he had written to Mr Kabi highlighting the irregularity in the price escalation from an initial M33, 4 million to a higher figure of about M40.1 million including some M2 million cost for “inland logistics” from Maseru to the delivery destinations which had not been properly tabulated to indicate how it had been arrived at.

“I asked Mr Kabi that if he wants me to sign, then he should instruct me to do so with a letter, but he refused. Why? Because he knows it’s illegal. He understands that very well, but he wanted me to perform an illegal act and I refused. That is our main bone of contention,” Mr Manyokole claimed to that publication.

Verobien has been at the center of verbal bouts between Mr Manyokole and Mr Kabi, with the former recently charging “the corruption of the Indians has brought me down, but the truth will never be defeated. The truth will always set you free. It shall set me free”. Mr Manyokole has since been removed from his position at the health ministry and transferred to a new post as principal secretary for Economic Affairs.

Minister Kabi has, nonetheless, rubbished Mr Manyokole’s claims, saying his former chief accounting officer had made the proper functioning of the ministry impossible through his abrasive approach and refusal to sign documents for efficient service delivery. 

Meanwhile, this paper is in possession of a letter signed by Mr Manyokole. The letter, dated April 17, 2019, guarantees Verobien Healthcare of the Ministry of Health’s intention to pay the balance of the tender value through an electronic fund transfer. 

“This is further to the agreement signed between Ministry of Health, Kingdom of Lesotho and Verobien Healthcare Private Limited for the supply, delivery installation, commissioning and maintenance of medical equipment to Ministry of Health Hospitals. We have already assured a sum of USD 17, 55, 746 as advance payment through Letter of Credit. 

“Through this letter, I hereby on behalf of Ministry of Health Kingdom of Lesotho, irrevocably undertake to pay you balance payment of tendered value through electronic fund transfer directly to your bank account in India. We have received Vendor/Supplier Registration Form for registering your company in the concerned ministry for direct payment to your account,” Mr Manyokole said in the letter. 

He concluded: “All sums payable by us under this letter shall be made without set-off or counterclaim and shall be paid free and clear of all withholdings and deductions. Our liability under this guarantee shall continue and the guarantee shall remain valid and in full effect from the date mentioned above till the installation and execution of the project.” 

 

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