Tenet Technologies, implicated in a brazen conflict of interest in the R47-billion National Student Financial Aid Scheme's (NSFAS) direct payment scandal, vowed to sue the state fund should it cancel its "irregular" contract. 

Despite NSFAS board chairperson Ernest Khosa asserting the student fund had terminated the four direct payment contracts, which were awarded through what an investigation found was blatant flouting of public procurement laws, Tenet Technologies' CEO Ryan Passmore rejected Khosa's assertions.

Passmore said NSFAS did not inform Tenet Technologies of any damning findings against it, adding its contract was not cancelled. 

The other implicated firms are Coinvest, eZaga Holdings and Norraco Corporation. 

NSFAS revealed last week that a probe by law firm Werkmans Attorneys and advocate Tembeka Ngcukaitobi found that suspended NSFAS CEO Andile Nongogo, among a slew of "irregularities", handpicked four firms to pay around 1.1-million students their R1 650 monthly allowances directly and not through tertiary institutions, which was the previous payment method.

As of Monday, no decision was taken on whether to fire Nongogo, who had until Monday to state why he should not be axed. 

Tenet Technologies, the investigative report stated, subcontracted its multimillion-rand contract to disburse allowances to 225 000 beneficiaries at 13 TVET colleges and six universities to a company, called Coralite Training Academy, which has as a director Koobandhra Naidoo, Tenet Technologies' sole director.

Naidoo deferred News24's questions to Passmore. 

A News24 background search confirmed the NSFAS probe's findings, including that another company Naidoo is a director of, Techsoft International, is embroiled in a legal battle for owing $9.7-million – roughly R185.1-million at the time of writing – to a United States-based company, Tibco Software, as part of a joint venture to supply Nedbank and Telkom. 

Nedbank and Telkom told News24 the companies were aware of the Gauteng High Court in Pretoria case between their suppliers. 

Meanwhile, City Press reported on Sunday that Nongogo alleged that his suspension related to Khosa handpicking 12 companies to receive 20-year leases from NSFAS in offtake agreements to provide student accommodation to the fund's beneficiaries. 

"My case is a classic one of being made the proverbial scapegoat at the altar of political expediency," said Nongogo, as quoted by City Press.

He claimed Higher Education, Science and Technology Minister Blade Nzimande and the NSFAS board were "in full alignment" with the decision to appoint the four direct payment companies, saying they "provided inputs right up until the execution of the tender process". 

Legal threats to NSFAS 

Passmore rejected NSFAS' claims that it had met and explained the probe's findings to all affected service providers, including Tenet Technologies, whose contracts would be cancelled.

"We are not aware of any damning findings, and neither have we been accused of any wrongdoing. We are not aware of anything other than the media reports of a cancellation. We will, however, challenge any cancellation that is unlawful and without cause," Passmore.

His views starkly contradict what Khosa said last week - that the fund had met with the four implicated companies and informed them of the contract termination. 

"The board will ensure that this termination does not affect the students negatively," Khosa said at a media briefing in Tshwane. 

Further, Passmore denied that Naidoo held interests in both Tenet Technologies and its direct payment subcontractor, Coralite Training Academy, as detailed by the independent NSFAS probe. This was despite News24's investigation showing that Naidoo, as recent as Thursday, was an active director in both companies. 

"We currently engage with many subcontractors, and most are 100% [black economic empowerment compliant]. It is important to note that there are no common shareholders with any subcontractor. 

"Through the implementation of the NSFAS project, more than 100 new jobs have been created across the subcontractors, and the demographics are approximately 97% non-white (of which 13% are Indian and 84% Black). The number of females is 70%," Passmore said.

"We have a vast investment in this project, and a lot of human capital has been applied to improve the direct payment system. Our processes address many issues faced previously, including constant fraud and ghost payments."

No due diligence conducted

Techsoft International – another company Naidoo is a director of – is in court trying to save its contract with Nedbank and Telkom due to a $9.7-million debt the company owes US-based Tibco as of October last year. 

However, Passmore said the matter was "a purely commercial dispute, and we are not at liberty to discuss the details as the case is sub judice". 

The court case seemingly accentuates the NSFAS investigative report's findings of the CEO's "inability of not conducting thorough due diligence of the service providers" before they were awarded the tender.

But Passmore stressed that the court case was "unrelated" to the NSFAS saga.

In a statement to News24, Nedbank said: "Nedbank is aware of the legal proceedings in the Pretoria High Court involving Tibco Software Inc., from whom it is receiving services. As the court case is still pending, Nedbank cannot speculate on the outcome." 

Telkom also responded in a statement: "Telkom is aware of the dispute between Techsoft and Tibco and is monitoring developments in this regard. Telkom cannot offer any comment on the speculation concerning Koobandhra Naidoo, Tenet Technologies, or the National Student Financial Aid Scheme."

News24 sent questions to higher education, science and technology department spokesperson Ishmael Mnisi, who referred all queries to NSFAS spokesperson Slumezi Skosana.

Skosana did not respond at the time of publication. 

The article will be updated should NSFAS respond.