Safeguarding Against Fraud: How Effective Screening Can Prevent Costly Tender Scandals
by Kyle Stroombergen – General Manager of HLBNGA
In a high-profile case, South Africa’s Directorate for Priority Crime Investigation, known as the Hawks, recently arrested six individuals connected to a R400 million tender fraud scandal involving Eskom and Sasol. The accused are charged with corrupt practices, including forging financial records and violating the Broad-Based Black Economic Empowerment (B-BBEE) Act. As investigations continue, this scandal reveals the potential financial and reputational risks that unchecked fraud poses to both private and public sectors in South Africa.
At HLBNGA, we recognize the challenges organizations face in identifying fraudulent practices, particularly in high-stakes contracts and tenders. Our advanced third-party screening solutions are designed to help companies detect and mitigate risks before they escalate. This blog draws on the Eskom-Sasol case to explore how comprehensive due diligence and screening solutions can protect organizations operating in South Africa from similar threats.
The Risks of Insufficient Screening in Tender Processes: The Eskom-Sasol case highlights how insufficient third-party screening can lead to substantial financial and reputational costs. In this instance, companies like NJM Heat Treatment, NDE Services, Dasmar Engineering, and Thermo Jet allegedly submitted falsified tenders, manipulating financial data and fabricating shareholder agreements to win contracts. Such practices put at risk the compliance and ethical standards that organizations in South Africa must maintain to safeguard both operations and public trust.
For companies dealing in tenders across South Africa, transparency is essential. Effective screening of third-party partners can reveal hidden risks, prevent financial manipulation, and help avoid regulatory infractions. HLBNGA’s third-party risk management solutions are developed to support businesses in building secure, trustworthy partnerships.
How HLBNGA’s Third-Party Screening Solutions Can Help: To help South African businesses navigate these challenges, HLBNGA offers comprehensive third-party screening solutions that go beyond basic due diligence. Our system is designed to uncover potential risks, detect conflicts of interest, and verify company records to prevent fraudulent activities.
Key Features of HLBNGA’s Third-Party Screening Solutions:
- Enhanced Background Checks: Our platform uses sophisticated analytics to verify the backgrounds of key individuals and stakeholders, reducing exposure to hidden financial or criminal activities.
- Director Verification: By automatically retrieving director and shareholder information, HLBNGA’s system reduces the risk of conflicts of interest and ensures businesses have complete visibility into their partners’ qualifications and connections.
- Continuous Risk Assessment: Our solutions include ongoing monitoring, which notifies businesses of changes in a third party’s risk profile or public standing, providing continuous vigilance to prevent breaches and reduce long-term risks.
Why Proactive Screening Matters: The Hawks’ investigation shows how quickly fraud can infiltrate tender processes when transparency is compromised. Fraudulent practices not only damage an organization’s finances but also its reputation, eroding public and stakeholder trust. Proactive screening with reliable third-party data helps South African businesses minimize such risks, ensuring compliance and protecting their integrity.
Conclusion: The Eskom-Sasol case underscores the high stakes of non-compliance and the importance of transparent partnerships in South Africa. HLBNGA is committed to empowering businesses with tools to safeguard their operations, maintain compliance, and build resilient, trustworthy partnerships. With HLBNGA’s advanced third-party screening solutions, your business can stay one step ahead, avoiding risks and protecting its reputation in the South African market.