Daily Maverick reported at least R650,000 went towards Sthoko Mkhize’s Tammy Taylor Nails outlet opened in Pietermaritzburg’s Midlands Mall. More than R400,000 was allegedly diverted from the R150m Digital Vibes contract to a hair salon, Gold Ace Cuts and Curls, co-owned by Mkhize’s son Dedani, close to the nail franchise. Last week Dedani said he had “nothing to hide” and claimed the Special Investigating Unit (SIU) had not afforded him an opportunity to state his version of events in the Digital Vibes saga. TimesLIVE reported his denial came after an earlier report stated Mkhize and his son had been referred to the National Prosecuting Authority (NPA) to consider charging them for corruption over “suspicious” payments received from Digital Vibes.

The information was contained in court papers the SIU filed at the Special Tribunal, where it is trying to recover R150m t allegedly unlawfully paid by the health department to Digital Vibes, a company owned by Mkhize’s close associate Tahera Mather. The Sunday Times reported that SIU lead investigator Rajendra Chunilall alleged in an affidavit that evidence pointed to Mkhize and Dedani having contravened the Prevention and Combating of Corrupt Activities Act. The affidavit contained allegations that the registered owner of Digital Vibes, Radha Hariram, helped facilitate cash collections in plastic bags and cardboard boxes for Dedani from the petrol station she ran. Sthoko Mkhize did not respond to enquiries about the nail franchise, reported Daily Maverick. Zweli Mkhize denied the allegations against him before he was placed on leave, and has maintained his silence.

In December 2020 a brand new Tammy Taylor Nails franchise opened its doors in Pietermaritzburg's Midlands Mall. On the day of the grand launch party, a beaming Sthoko Mkhize (34), Health Minister Zweli Mkhize’s daughter-in-law, posed for a picture in front of her new business. She stood on a plush carpet that led guests through the store’s entrance to a table laden with cheese platters and other treats. Behind the snacks were several bottles of Moët Chandon Champagne on a purpose-built shelf bearing the famous French bubbly’s logo. Another picture shows Zweli Mkhize’s son Dedani (33) sitting at a pedicure station, clearly enjoying the benefits of his wife’s new shop. “Thank you for attending our successful launch, here’s to a beautiful start,” the salon’s Instagram account later posted. But the glitz and excitement belied a disturbing truth about Sthoko Mkhize’s new venture. Following months of investigation, Daily Maverick’s Scorpio can now reveal that at least R650,000 that flowed from the Department of Health’s (DoH’s) allegedly corrupt Digital Vibes contract went towards the start-up costs for Sthoko Mkhize’s Tammy Taylor Nails outlet.

We’ve also uncovered monies totalling at least R446,000 that had been diverted from the R150-million DoH contract to the account of a new hair salon, Gold Ace Cuts and Curls. This new business, co-owned by Dedani Mkhize, is located in a smaller shopping centre just around the corner from his wife’s nail franchise. Some of the proceeds of the DoH contract that had ended up in the account of one of Dedani Mkhize’s companies also covered expenses for his farm outside Pietermaritzburg, our investigation has shown. Money stemming from the DoH contract covered a few personal bills too, including at least one monthly instalment for a BMW SUV.

The starting point for our months-long investigation is the funds that Digital Vibes received from the DoH for its contentious National Health Insurance (NHI) and Covid-19 communications services. Between late January 2020 and February 2021, the DoH paid Digital Vibes R150-million in 19 instalments of varying values. We followed a good deal of the R150-million to a web of first-, second- and third-tier recipients. Our analysis of scores of transactions between these entities has led us to this disturbing conclusion: during the worst health crisis in South Africa’s recent memory, money from a vital contract awarded by our national health department was allegedly laundered towards new businesses set up by the health minister’s son and daughter-in-law.

It is now also clear that at least two of the first-tier recipients of the Digital Vibes loot, namely Mateta Projects and Composit Trade and Investments 02, at least partly acted as alleged slush funds for the Mkhize couple. Scorpio’s latest exposé firmly places us in greenfields territory as far as the Digital Vibes matter is concerned to our knowledge, the Special Investigating Unit (SIU) and other law enforcement bodies have not yet probed the monies that went to the Mkhizes’ businesses. We will unpack five examples of how funds originating from the Digital Vibes contract were funnelled through an array of accounts before ending up with these new businesses.

Dedani Mkhize rejected all notions that he had been the beneficiary of alleged money laundering linked to the Digital Vibes deal. “This obsession of trying to make me look like I took Digital Vibes money is just crazy,” he told us in early July. In the same breath, however, he seemingly conceded that the idea may not be all that ludicrous. “I have already formally informed the SIU that should the gifts that I have received from Ms [Tahera] Mather since 2015 be proven to have been from irregular state contracts, I am prepared to repay such monies directly to the state.” His wife, Sthoko Mkhize, did not respond to any of our queries regarding her new nail franchise.

The first string of transactions on our radar was kicked off by a R7.8-million payment from the DoH to Digital Vibes on 15 April 2020. This would have been for one of the first invoices Digital Vibes submitted for its Covid-19 services after its contract had been unlawfully amended to include work outside of its original scope, namely the NHI. About a week after it received the money, Digital Vibes forwarded R874,000 to Composit Trade and Investments 02. This entity’s sole director is Tahera Mather, Zweli Mkhize’s longtime personal spokesperson and one of the alleged masterminds behind the Digital Vibes scheme.