Questions have arisen about the award of a multimillion-rand Buffalo City Metro tender for layout, design and placement of advertisements after a Daily Dispatch investigation found that the company awarded the work was actually registered months after bids were closed.
The R11m BCM tender, which closed in September 2015, was awarded to Makinwa Media Solutions (MMS), a company only registered in February 2016, according to the registry of companies.
However the owners of the company submitted their original bid in the name of a different company called Makinwa Media Management (MMM). After this submission, MMM apparently ran into tax problems.
The owners then registered Makinwa Media Solutions and invoiced BCM in the name of this new company. An informed source said: “The company that is currently being used is not the legitimate company that bid for the tender and, thus, is being used fraudulently.”
However, this was denied by the company’s owner, Barry Makhan, who said they had used MMS because they’d decided to restructure MMM.
“MMS is a restructured MMM, which was changed in February 2016 from CC to a Pty (Ltd),” Makhan said.
When asked which company’s name featured in the initial bid, he said they’d submitted their bid via MMM, and confirmed that the tender instead ended up being awarded to MMS.
“MMM ceased trading but not for any reason other than restricting. The issue between MMM and SARS is sub-judice and I therefore cannot comment on it as this stage,” he said.
However the Dispatch has it on good authority that MMM and MMS are two different entities with two different registration numbers, both which still exist in the company register.
BCM spokesperson Samkelo Ngwenya said although the tender ended up being awarded to MMS, BCM had taken all the necessary measures to ensure the award was made within the legislated framework.
“This includes appropriate committees requesting audited financial statements and legal documents on the name changes. Over and above this, the municipality also has internal control measures; this is over and above independent external controls that audit our contracts,” Ngwenya said.
Company law expert Jay Kruuse, director at Public Service Accountability Monitor (PSAM), said that while it appeared reassuring that BCM was made aware of the changed entities, it did introduce concerns that BCM may not have complied strictly with the legislated framework as they in essence awarded the contract to an entity that had not bid.
Makhan’s dealings with BCM were mentioned by EFF leader Julius Malema during the party’s fifth birthday celebrations in Mdantsane last month.
“I'm told that there is a guy called Barry Makhan, who got a tender of marketing the city,” Malema said.
“The city gave him R20m in one year. He is pocketing R20m every year and the people of Duncan Village do not have water.”..