It is simply not an acceptable business practice to line your pockets by overbidding for tenders, just because everyone in government seems to be doing it.
Corporate SA needs to sit up and realise that dodgy tender deals are a one-way street to economic disaster.
Tender fraud and jobs for pals - and the recent creation of an entire class of 'tenderpreneurs' - are no longer big news. We all know it happens and we all know the pockets of the well-connected get lined with millions for sometimes dubious work.
However, what makes it into the press even less often are those companies that made hay while the sun shone, and left behind a few key principles in the pursuit of riches.
Sadly, local companies seem to think it is acceptable to win tenders based on dubious credentials and leaked confidential information. It isn't. Just because a police car stops in a paraplegic bay so that the driver can pop into the shop, doesn't make it okay for the rest of us to follow suit.
Wasteful expenditure
The Democratic Alliance has a wasteful expenditure counter on its Web site. So far, according to the opposition party, the ruling party has misspent over R1 billion in taxpayers' money on things like flashy cars and parties.
While the ANC is called to account for its misspending by the media and opposition parties, with heads sometimes rolling, if a company takes advantage of weak procurement procedures, no-one goes to jail.
The auditor-general recently pointed out in its latest National Audit Outcomes 2008-09 that many government departments do not follow proper procurement procedures. This has led to irregular spending to the tune of millions.
Based on these findings, it seems government departments and entities do not follow the rules when sourcing - and paying for - services. This makes it so easy to bump up the amount on an invoice, or bill for items that were just never delivered.
Corporate SA needs to sit up and realise that dodgy tender deals are a one-way street to economic disaster.
Nicola Mawson, senior journalist, ITWeb
If this sort of dubious spending is ever uncovered, it is never really punished. No-one goes to jail and CEOs will just quietly quit, or fold the company and start afresh under a new name.
As CEOs make their less-than-graceful exits, secure in the knowledge that their pension funds will pay out - they leave in their wake unpaid creditors, unpaid staff and shareholders whose investments have gone down the drain.
Take the recent debacle around the Companies and Intellectual Properties Registration Office (Cipro). All sorts of details are starting to come out now about the fact that the tender should really not have been awarded to little-known Valor IT.
It seems the company had access to information it should never have seen, such as Cipro's business plan. This information was not made available to competing bidders, such as Faritec, which has since folded.
This is a worrying situation, especially if other companies start to follow suit and an entire new business segment emerges with some new-fangled nickname.
Be transparent
In fact, actual detailed information of much of the goings on in ICT companies is sorely lacking. We chastise government when it buys million-rand Beemers, but don't look too closely at our listed companies, assuming they will adhere to the rules.
They don't. Companies file reports late, and the JSE just sticks a note on their shares. Companies sell their shares indirectly back to themselves - take Huge Group as an example - and the JSE fines directors and they appeal.
This is just not enough. Shareholders need to be way more vocal. By that I don't just mean people with direct holdings in those companies, I mean those who manage our investments on our behalf.
Someone needs to keep a beady eye on these companies. Not only does mismanagement cost the economy dearly - although I certainly cannot quantify this amount - but people are losing jobs. Jobs they need to pay off the bond and credit cards.
Shareholders also lose out. People who have bought stock in good faith only to wake up on fateful Friday morning to find out that it is worthless, and they cannot sell it. And creditors cannot recoup what is, in essence, lost stock.
Frankly, unless corporate SA stops trying to turn a quick buck, we are all in the poo.
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