FILE - In this Tuesday, April 14, 2020 file photo, South African Health Minister, Zweli Mkhize, takes delivery of emergency medical equipment for COVID-19 from China, at OR Tambo Airport in Johannesburg, South Africa. (AP Photo)
The damning report from the Special Investigating Unit (SIU) said former health minister Zweli Mkhize oversaw contracts through Digital Vibes, a front company run by his former spokeswoman and personal assistant.
Using money meant to educate the public about how to stay safe during the pandemic, his son Dedani Mkhize bought a Land Cruiser and withdrew "significant amounts of cash", the report said.
The SIU, an independent law enforcement agency with similar powers to the FBI, said the health ministry's former director general Anton Pillay should be criminally charged with financial misconduct.
The current director general Sandile Buthelezi was suspended over the weekend.
Investigators also urged President Cyril Ramaphosa to take "executive action" against the ex-minister Mkhize, who resigned in August, as well as six other officials. The agency said it would issue more detailed recommendations about these measures later.
The SIU report did not delve into details of how the money was spent.
Local media have reported that one Digital Vibes official took her family on a month-long trip to Turkey during South Africa's second coronavirus wave.
Other reports have highlighted spending sprees on luxury goods.
One woman who on paper supposedly ran Digital Vibes actually worked at a gas station, while other money went to a beauty salon run by Mkhize's daughter-in-law, according to the Daily Maverick newspaper.
The SIU has already taken steps to recover some of the funds, which had been earmarked for public awareness and media campaigns.
While this case is among many Covid-related graft investigations, the revelations have alarmed the public as Mkhize and Pillay were both seen as effective civil servants in a country marred with graft.
But Ramaphosa later told journalists that "much as he (the ex-minister) is implicated in the report, he has served the nation well.
"He was sole voice of the pandemic and we were able to navigate around the pandemic because of his experience," Ramaphosa said in response to a question at a media briefing on his ANC party's preparations for upcoming local government elections.
Ramaphosa is battling to convince South Africans to vote for the African National Congress, the continent's most storied political party, in key municipal elections coming just a few months after deadly riots rocked the country's most populous regions.
Deep internal party divisions and general disillusionment with the ANC played out during the July riots and looting of businesses. The unrest claimed 354 lives and affected more than 40,000 businesses.
Ramaphosa called the riots -- sparked by the jailing of his predecessor Jacob Zuma for contempt -- an attempted insurrection.