City Of Matlosana: Awards Dephetogo Trading Security Contract Despite SIU Probe

• The City of Matlosana appointed Dephetogo Trading for a three-month security contract on October 28, 2026, through a deviation from competitive bidding.
• Municipal manager Lesego Seametso cited an appeal over the original tender and an urgent service delivery gap as reasons for the deviation.
• Dephetogo Trading is currently under an SIU investigation concerning a R68-million tender awarded by Knysna Municipality.
• The company previously had a R140-million security contract terminated in December 2023 due to findings of a fictitious UIF certificate and firearm discrepancies.
• Unsuccessful bidders in Matlosana's original security tender alleged procedural flaws, including the appointment of ineligible companies and post-closing document amendments.

The appointment of Dephetogo Trading, a company with a documented history of contract terminations and ongoing investigations by the Special Investigating Unit, raises significant concerns regarding municipal procurement integrity.

The City of Matlosana, located in the North West province, has recently engaged Dephetogo Trading to provide essential municipal security services. This appointment, formalized through an official letter issued by municipal manager Lesego Seametso on October 28, 2026, designates Dephetogo Trading as one of four entities tasked with delivering physical security on an "as-and-when-required" basis for a three-month period.

Notably, this Matlosana Dephetogo Trading security contract was awarded without adhering to standard competitive bidding procedures, instead relying on a deviation from normal procurement rules. According to documents reviewed, Mr. Seametso justified this Matlosana municipal procurement deviation by citing an ongoing appeal concerning the original tender process and an urgent requirement to address a service delivery gap within the municipality. This decision follows a prior competitive tender for a three-year security panel, where conditional awards, including one to Dephetogo, were announced in late September, subsequently leading to formal appeals from unsuccessful bidders.

The company at the center of this new agreement, Dephetogo Trading, is currently under investigation by the Special Investigating Unit (SIU) and has a documented history of contractual issues. A separate R68-million tender awarded by the Knysna Municipality to Dephetogo is actively being probed by the SIU, with authorization for this investigation granted in August 2026. SIU spokesperson Selby Makgotho confirmed on November 2 that inquiries into allegations of serious maladministration, corruption, and financial loss within the Western Cape municipality are ongoing, focusing on whether the procurement process and subsequent payments were fraudulent, non-competitive, or unlawful.

Furthermore, Dephetogo Trading previously experienced the termination of a substantial R140-million security contract in December 2023 by the Department of Forestry, Fisheries and the Environment. A forensic investigation conducted by Morar Incorporated, reported in 2025, uncovered significant irregularities during the tender process for this contract. Findings included the submission of a fictitious Unemployment Insurance Fund (UIF) certificate, the deployment of unarmed personnel to sites requiring 116 firearms when the company possessed only 27 licenses, and the operation of a single control room situated over 1,000 kilometers away from the protected sites.

The City of Matlosana security tender process has drawn sharp criticism and legal challenges from unsuccessful bidders. Legal notices filed by their attorneys in September and October outlined several serious allegations. These included claims that the municipality proceeded with the evaluation and conditional appointment of bidders who should have been deemed ineligible due to prior contract terminations.

Further accusations detailed that successful bidders were allegedly permitted to amend, replace, or supplement their bid documentation after the official closing date and during the evaluation phase. Concerns were also raised that tender documents for one or more successful bidders were executed by signatories lacking formal authorization. The appellants contended that the pricing schedules and evaluation criteria lacked a rational connection to the tender's stated objectives, rendering the entire procurement process non-competitive, unfair, and ultimately unlawful.

This controversial Lesego Seametso Dephetogo appointment unfolds against a backdrop of severe financial instability within the City of Matlosana. The municipality is currently operating under a mandatory financial recovery plan, a direct consequence of years of persistent maladministration. By the 2024/25 fiscal year, the municipality's unauthorized, irregular, fruitless, and wasteful expenditure had escalated to a staggering R10.8-billion.

Adding to its woes, the City of Matlosana faces significant challenges in meeting its financial obligations, taking approximately 600 days to pay its creditors. Despite the gravity of these issues and the specific concerns surrounding the security contract, both the City of Matlosana and municipal manager Lesego Seametso failed to respond to queries dating back to October 29. Dephetogo Trading also did not provide responses to inquiries.

This case highlights the significant legal and compliance risks associated with municipal procurement, particularly where deviations from competitive bidding occur and companies with a history of irregularities are appointed. Lawyers advising municipalities should emphasize strict adherence to procurement regulations to avoid legal challenges and potential SIU investigations, while compliance officers for bidding companies must conduct thorough due diligence on partners and ensure impeccable tender documentation to mitigate reputational and legal exposure.

Source: Original reporting via GroundUp