Blacklisted Suppliers Threaten Legal Path

uSpiked will not be bullied

The masterminds of a ‘fronting’ scheme that reaped lucrative public tenders have threatened to sue uSpiked over our damning revelations.

In Brief

  • ‘Fronting’ scheme masterminds Chen-Yen Wu and Li-Jung Wu have threatened to take legal action against uSpiked over our reports exposing their questionable ways
  • Through their lawyers, the couple says an urgent court application will be sought should uSpiked fail to meet stated demands
  • Chen-Yen Wu and Li-Jung Wu have won several tenders from the Department of Health despite their inclusion in the Database of Restricted Suppliers (Blacklisted)
  • Treasury is reportedly investigating the couple for tax fraud, money laundering, identity theft and other public tender-related crimes
  • The couple’s letter of demand has indeed further exposed officials at the Department of Health
  • uSpiked’s editorial stands by the reports and has roped in a team of reputable attorneys to vigorously defend all actions that may be instituted by the Wu couple
“You own everything that happened to you. Tell your stories. If people wanted you to write warmly about them, they should have behaved better.” Anne Lamott

The husband and wife team uSpiked’s investigations revealed to have been involved in a possible case of fronting to win a multi-million rand tender from Department of Health has given the strongest indication yet it will not ‘roll over and go away’.

In our reports published on 24 November and 4 December we outlined how Chen-Yen Wu and his wife Li-Jung Wu used Medi-Core Technologies (Pty) Ltd. - a company they set up in 2013 in the names of their employee - to secure several contracts. We reported that the decision to register the entity in the names of Moonilal Hansraj Seopursat was mainly to circumvent the restriction placed on them for various improprieties, some of which are still under investigation by Treasury. Chen-Yen and Li-Jung Wu have now threatened to seek an urgent high court intervention should we fail to meet their demands.

In their letter to uSpiked, the couple through their attorney John Small of Thomson Wilks Inc. demanded “… an immediate and irrevocable retraction of the published articles [without naming the exact parts that offended them -editor], particularly of those allegations which are made about and concerning our clients. In addition our clients require a written apology to be published on your website. Our clients also require an immediate undertaking that you will not in the future publish any further articles which are untrue, defamatory or sensationalist about and concerning our clients, speculate, without basis for doing so, about our clients’ involvement in a fronting scheme or which implicates our clients as criminals.”

Mr. Small concludes the letter with a warning; “Should we not receive your undertaking on or before close of business on Monday 28 December 2015, we hold instruction to immediately proceed with an urgent application in the High Court of South Africa for necessary relief against you in respect of which our clients shall seek also that you pay our clients’ legal costs on an attorney and own client scale. This letter shall be used in support of any such application.”

The position taken by uSpiked’s editorial and which has been communicated to Attorney Small is that we stand by the content of the revelations. Furthermore, all actions that may be instituted by the couple shall be defended vigorously.

When uSpiked first raised the issue of possible fronting by the blacklisted couple with the Department of Health, deputy director general for Health Regulations and Compliance Dr. Thamizhanban ‘Anban’ Pillay claimed to have found no link between Medi-Core Technologies (Pty) Ltd. and Chen-Yen Wu and Li-Jung Wu. Dr. Pillay requested that we let him into what we had found, which we did. 

Left exposed: Chicken coming home to roost

We published our findings when Dr. Pillay and his Unit failed to act on the information we had provided and instead allowed the supplier to alter all previous information that connected the entities. The fact that Dr. Pillay’s Unit allowed the supplier to conceal possible impropriety prompted us to declare it as fraud.

The legal definition of ‘fraud’ is: a false representation of a matter of fact – whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed – that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.

In their attorney’s letter, the couple records; “Medi-Core Technologies (Pty) Limited is a company well known to our client and owned by Moonilal Hansraj Seopursat (“Seopursat”). Seopursat is an employee of Wupro and has been an employee of Wupro for eight (8) years. Seopursat approached Chen Yen Wu two (2) years ago to ask for his support to incorporate his own company in order to start a business for the supply of medical goods. Seopursat has worked in the industry of medical consumable manufacturing and distribution for 21 years. Our clients, particularly, Chen-Yen Wu, fully supported the new business and provided Seopursat with facilities and infrastructure to start the business. Our clients will support Seopursat and Medi-Core Technologies today and share, entirely at arms length, facilities and infrastructure with Medi-Core Technologies. Wupro also provides warehousing and logistics services to Medi-Core.” That is exactly what we had reveled and the Wus appear to brag about their involvment in beating the system.

What is not disputed in the letter is our revelation that the products contracted to Medi-Core Technologies by the Department of Health are those directly benefiting the couple through their claimed local agency to Jiaxing U-Life Medical Device Technology Co. Ltd. [– a company the lawyer’s letter now claims to have been incorporated in the Republic of China (Taiwan) and not People’s Republic of China as publicly available records imply - editor]. So, despite the restriction on the couple by Treasury still in effect, they somehow managed to trade with the Department of Health. Did Medi-Core Technologies (Pty) Ltd. declare the confirmed ties in their tender bids?

Pertaining to the HM01-2015CNDM Tender (the Condoms and Lubricants Tender), document SBD8 - declaration pertaining to the bidder’s past supply chain management practices - how did the couple respond to paragraph 4.1 of the Section? Having now confirmed their involvement in the creation and running of Medi-Core Technologies (Pty) Ltd. and we also know that the products Medi-Core proposed to supply to the Department of Health were those of U-Life, a brand now been confirmed to be owned locally by Chen-Yen Wu, it would be enlightening to see the original declaration.

Certainly the declaration would not have included a statement like; “Mr. Chen-Yen Wu a.k.a Julio Wu whose products we are proposing to supply remained blacklisted by National Treasury until February 2015 while his wife, Li-Jung Wu, shall remain blacklisted until October 2023.” Also blacklisted during the same period was Selina Naidoo who has remained an employee of Wu’s Wupro Technologies (Pty) Ltd., and the publicly listed contact person for Jiaxing U-Life Medical Device Technology Co. Ltd.

‘fronting, misrepresentation, prejudice or potential prejudice, unlawfulness and intention,’

We did not mention Chen-Yen Wu’s personal blacklisting in our previous reports because we reckoned he had served his time. But now that they have put uSpiked on crosshairs, we must inform the public that on February 2010 the National Treasury blacklisted Chen-Yen Wu for five years on charges of ‘fronting, misrepresentation, prejudice or potential prejudice, unlawfulness and intention,’ through his company Juel Health (Pty) Ltd.

We do not agree with Attorney Small’s contention that the issues and details of their previous improprieties are immaterial. Taxpayers have every right to know who benefits from their money.

Also, while blacklisting Chen-Yen Wu in February 2010, the National Treasury recorded his name as Julio Wu (ID No. 650322 5218 186 - the same ID number issued to Chen-Yen Wu). Chen-Yen used the name Julio Wu to register Theratech Supplies cc (2005/083795/23) in July 4, 2005. According to reliable sources, his attempts to use this close corporation to secure a contract with the National Treasury, had clashed with records on Juel Health (Pty) Ltd, which was already under investigations by Treasury - two of the many reasons he became ‘an individual of interest’ and subsequently featured on the Database of Restricted Suppliers.

Records obtained by uSpiked from Companies & Intellectual Properties Commission (CIPC) show that Theratech Supplies cc was registered to Julio Wu and Brian Douglas Kruger. On 9 November 2005, the name Julio Wu was replaced with Chen-Yen Wu, but the ID number remained the same.

What are the chances that these are two different people? Investigations by our data analysts indicate that Julio and Chen-Yen is one and the same person.

There were 27.1 million live births in China in 1965. The probability of two babies born on March 22, 1965 sharing the names Chen-Yen Wu is as high as 49.86% (that is assuming that all the births of that day were baby boys, otherwise the probability could reduce by half).

Let’s consider for a moment Attorney Small’s claim that his clients are Taiwanese. 406,604 live births were registered in Taiwan in 1965. Still, the probability of two babies born on March 22 sharing the names Chen-Yen Wu remains at 49.85%.

It can be argued that almost 50% chance is pretty good. However, one nugget of information gleaned from a 2012 published research by Dr. Yoon Jung Park, a non-resident Senior Research Associate of the Sociology Department at Rhodes University, massively tipped the scale regarding the Chen-Wu/Julio Wu fiasco. Dr. Parks’ paper titled Living In Between: The Chinese in South Africa stated that there are roughly 6,000 Taiwanese residing in South Africa. The probability of having two Chen-Yen Wus born on the same March day in 1965 and sharing South African ID numbers is impossible. In forensics, it would be akin to unrelated individuals sharing a DNA.

So, when does Mr. Wu prefer to be called Julio or Chen-Yen? This we will likely know soon should the promise to institute legal proceedings against us come to fruition. Still, the Department of Health has some tough questions to answer. The couple has now admitted their involvement in the creation of Medi-Core Technologies, a fact Dr. Pillay claimed he could not ascertain.

On the issue of blacklisting, our team is trying to decipher how, on 18 December 2015, Li-Jung Wu’s name got deleted from the Database of Restricted Suppliers. A casual check revealed Jacques Engelbrecht, the director of eTendering at the Treasury, created the new database omitting Li-Jung Wu name at 7:50am on December 18, 2015.

How and why did Treasury official, Jacques Engelbrecht, delete the names of Li-Jung Wu on the December 18, 2015 several years before the published 2023?

There is coincidental background to our suspicions. On 9 December 2015 at 2:15pm, Attorney John Small tried reaching us on the telephone. The following morning when we returned his call, he told our editor that he had a letter from his clients that he needed delivered to us. We invited him to do so via email or registered mail and confirmed our preferred delivery means in an email sent to him at 11:31am on the same day.

On 22 December 2015 his email with the attachment of a letter named ‘USPIK letter revise 1’ and dated 10 December, reached our mail servers at 9:50am. Interestingly, the digital fingerprint of the letter shows that despite being dated December 10, it was indeed created at 9:45am on 22 December 2015. Why did it take twelve days to deliver a letter they had allegedly prepared? Was the delay related to the removal of Li-Jung Wu’s name from Treasury’s database of restricted suppliers?

We have requested the offices of Treasury’s Director-General and government’s Chief Procurement Officer for details of what could have precipitated the change on Li-Jung Wu’s status. We would like to know who instructed Engelbrecht to remove particular names, some of which still had many years before due.

We are reflecting on one of the motivations of our ethos, the wisdom of Anne Lamott; “You own everything that happened to you. Tell your stories. If people wanted you to write warmly about them, they should have behaved better.”

So as our attorneys are attending to the demand, we could only urge Attorney Small to tell his clients that they own everything that happened to them. If his clients wanted us to write warmly about them, they should have behaved better.


Access to Attorney John Small's Letter of Demand