SIU Recoups R 71.4M in Covid-Relief Fraud, Fights Back Against Corruption

• The Special Investigating Unit (SIU) has recovered approximately R 71.4 million linked to fraudulent claims from the Temporary Employer/Employee Relief Scheme (TERS), with companies agreeing to repay nearly R 99.7 million.
• Among the companies that unduly claimed TERS funds, South African Airways Technical and RH Matjhabeng Hospital have made significant repayments directly to the Unemployment Insurance Fund (UIF). The hospital, despite not being affected by Covid-19, had received TERS funds and deviated from the agreement with the SIU by repaying the UIF directly.
• The SIU, authorized by President Cyril Ramaphosa, continues its investigation into TERS payments made to ineligible recipients and false applications to the UIF. In a related case, the East London Magistrate Court sentenced a Zimbabwean citizen to one-year imprisonment for identity theft used to commit TERS fraud.

In a significant breakthrough, the Special Investigating Unit (SIU) has recovered approximately R 71.4 million linked to fraudulent claims from the Temporary Employer/Employee Relief Scheme (TERS). The SIU has signed acknowledgments of debt (AOD) with various companies, amounting to nearly R 99.7 million, to repay the funds unduly received from the scheme.

TERS, a government initiative, was established as a rescue measure for industries adversely impacted by the Covid-19 pandemic. However, it was discovered that several companies had unjustly claimed funds from the Unemployment Insurance Fund (UIF), a Department of Labour agency responsible for administering TERS.

Since the commencement of investigations in June 2021, the SIU has successfully recovered a substantial amount, including R 9 987 728.71 paid directly to the UIF by the implicated companies. Among these, South African Airways Technical returned R 8 830 044.19, and RH Matjhabeng Hospital, a private hospital in Free State province, repaid R 488 458, 21.

The SIU’s investigation revealed that RH Matjhabeng Hospital was ineligible for TERS funds as its operations were not affected by the pandemic. The hospital management acknowledged the undue receipt of the funds and agreed to repay the SIU. However, in a surprising turn of events, the hospital deviated from the agreement and directly deposited the repayment into the UIF account.

As per the Special Investigating Units and Special Tribunals Act, the SIU is mandated to refer evidence of criminal conduct to the Nation Prosecuting Authority for further action. In a related development, the East London Magistrate Court sentenced Admirer Sibanda, a Zimbabwean citizen, to one-year imprisonment on 27 February 2023. Sibanda, who pleaded guilty to identity theft used to commit TERS fraud, was ordered to be deported to his home country after serving his sentence.

The SIU’s investigation into the UIF’s affairs was authorised by President Cyril Ramaphosa under Proclamation R.8 of 2021. The SIU continues to probe TERS payments made to ineligible recipients and false, irregular, invalid, or defective applications to the UIF, including the causes of such maladministration. The recovery of these funds marks a significant step in the ongoing fight against corruption and fraud in the wake of the Covid-19 pandemic.