Two suppliers responsible for nearly 50% of
all long-lasting insecticide-treated nets (LLINs) purchased by the
Global Fund on behalf of malaria projects worldwide have been suspended
following an investigation in Cambodia into widespread fraud and
kickbacks paid to government officials.
The report on the investigation, the first report released under new Inspector General Martin O'Malley, was the result of a two years of investigative work by his predecessors. The report recommended that Vestergaard Frandsen and Sumitomo Chemical Singapore be sanctioned. Acting on a recommendation of the Sanctions Panel, the Global Fund Secretariat took the decision to suspend both companies from further tendering pending review.
The two suppliers were found to have paid kickbacks worth $410,712 to two Cambodian officials working at the National Centre for Parasitology, Entomology and Malaria Control (CNM): at the time, the principal recipient of malaria grants worth $11.8 million from 2006-2011. Cambodia has received some $431 million in grants since 2003 for its fight against AIDS, TB and malaria.
In emails responding to GFO's requests for comments, both companies said they had reviewed operations in the region and taken action. Sumitomo's spokesperson said "Sumitomo Chemical Singapore takes a serious stand against employee misconduct of any kind and has taken appropriate remedial measures."
Vestergaard's spokeswoman Meryl Rader said: "Vestergaard has reviewed the report of the investigation... into certain business transactions that occurred out of Vestergaard Frandsen India from 2007 - 2011.
"The matter under investigation by the Global Fund related to improper activities by two employees in Vestergaard Frandsen India. This was not known or approved by our management in Switzerland. Nonetheless, Vestergaard is ultimately responsible for the company and actions in any of its subsidiaries. We have implemented corrective actions that include improved controls and procedures in all our operations. We're committed to operating under the highest ethical and business practices. Vestergaard will cooperate fully with the Global Fund on this matter as we have done to date."
Additionally, among two sub-recipients of Fund grants, two staff positions at an entity called MEDiCAM were improperly charged to the Fund in 2009 and a procurement officer manipulated procurements at the National Centre for HIV/AIDS, Dermatology and STD Control (NCHADS), according to the 216-page report released by the OIG. Those manipulations were worth an additional $20,000.
The report on the investigation, the first report released under new Inspector General Martin O'Malley, was the result of a two years of investigative work by his predecessors. The report recommended that Vestergaard Frandsen and Sumitomo Chemical Singapore be sanctioned. Acting on a recommendation of the Sanctions Panel, the Global Fund Secretariat took the decision to suspend both companies from further tendering pending review.
The two suppliers were found to have paid kickbacks worth $410,712 to two Cambodian officials working at the National Centre for Parasitology, Entomology and Malaria Control (CNM): at the time, the principal recipient of malaria grants worth $11.8 million from 2006-2011. Cambodia has received some $431 million in grants since 2003 for its fight against AIDS, TB and malaria.
In emails responding to GFO's requests for comments, both companies said they had reviewed operations in the region and taken action. Sumitomo's spokesperson said "Sumitomo Chemical Singapore takes a serious stand against employee misconduct of any kind and has taken appropriate remedial measures."
Vestergaard's spokeswoman Meryl Rader said: "Vestergaard has reviewed the report of the investigation... into certain business transactions that occurred out of Vestergaard Frandsen India from 2007 - 2011.
"The matter under investigation by the Global Fund related to improper activities by two employees in Vestergaard Frandsen India. This was not known or approved by our management in Switzerland. Nonetheless, Vestergaard is ultimately responsible for the company and actions in any of its subsidiaries. We have implemented corrective actions that include improved controls and procedures in all our operations. We're committed to operating under the highest ethical and business practices. Vestergaard will cooperate fully with the Global Fund on this matter as we have done to date."
Additionally, among two sub-recipients of Fund grants, two staff positions at an entity called MEDiCAM were improperly charged to the Fund in 2009 and a procurement officer manipulated procurements at the National Centre for HIV/AIDS, Dermatology and STD Control (NCHADS), according to the 216-page report released by the OIG. Those manipulations were worth an additional $20,000.
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