The accountants who helped loot the Lottery

The accountants who helped loot the Lottery

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The Specific Investigating Unit has determined 5 accounting corporations that assisted loot Lottery cash. Graphic: Lisa Nelson

The Distinctive Investigating Unit has recognized 5 accounting and auditing firms that assisted non-revenue companies loot Lottery dollars supposed for “superior causes”.
The accounting companies compiled fraudulent economical statements used by these corporations to make an application for Lottery funding, the SIU informed Parliament.
Acting chief countrywide investigations officer Zodwa Xesibe reported the SIU would take action to acquire these companies blacklisted.
A four-calendar year probe with the ruay Distinctive Investigating Unit (SIU) has exposed 5 accounting and auditing firms that assisted dodgy non-financial gain companies loot numerous a lot of rands intended for “superior causes” from the Lottery.

These companies were explained with the SIU as “Qualified enablers,” who “compiled fraudulent money statements” that were employed by the companies to make an application for Lottery funding.

The five corporations have been named in Parliament through the SIU’s performing chief countrywide investigations officer Zodwa Xesibe. They are really TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Products and services.

Fraudulent financials produced by these five accounting companies assisted just about forty providers get their fingers on lottery funding, in accordance with the SIU presentation.

According to a tool that contains information with all lottery grants given that 2002, these companies received about R314-million in funding.

“These NPCs were being funded because of the National Lotteries Commission (NLC) however the money weren't utilised for his or her intended reason,” Xesibe told Parliament’s Trade, Marketplace and Competitors Portfolio Committee final week.

The SIU, the Hawks and the Nationwide Prosecuting Authority (NPA) ended up in Parliament to report to the committee on progress in bringing folks and organisations associated with looting the lottery to e-book.

Xesibe informed GroundUp that the SIU meant to lodge complaints against the accounting companies involved and was examining if these companies were registered and, if so, with which Experienced bodies.

“We would like these businesses to generally be blacklisted,” she advised GroundUp.

To qualify for Lottery funding, an organisation was needed to generate two decades of annual fiscal statements, Xesibe defined in Parliament.

Having said that, as an ongoing six-12 months investigation into lottery corruption by GroundUp has revealed, hijacked non-income organisations (NPOs) or new shelf non-financial gain organizations (NPCs) without money track records were used to make an application for funding.

In a few circumstances, Nearly equivalent economical statements ended up developed for unrelated organisations, typically with only the names in the organisations modified, GroundUp’s investigation found.

Files submitted by genuine NPCs for unsuccessful grant applications ended up generally used by new or hijacked NPCs and NPOs to submit an application for funding. The details and paperwork of your unsuccessful applicants had been provided by senior Lottery officers on the dodgy applicants.

With cursory or - usually - no verification, these dodgy applicants were being awarded numerous rands in grants. From time to time extra tranches of money have been paid out out with out Significantly checking on the development of assignments.

The vast majority of such grants were being manufactured through proactive funding, which was at the heart of your looting with the lottery. Proactive funding permitted the Minister of Trade, Field and Level of competition, or even the NLC together with its board, to detect will cause to fund with out to start with requiring an application. This was stopped every time a new NLC board was appointed.

R2-billion in grants under investigation
SIU head Advocate Andy Mothibi claimed the SIU was presently investigating grants valued at above R2-billion, plus the device was however consistently obtaining suggestion-offs about far more corruption.

He told MPs that the SIU’s investigation were damaged into 3 phases: the 1st, which has been finalised, probed dodgy grants amounting to R280-million, and the 2nd, also completed, associated R247-million. During the 3rd stage, due to be finalised at the end of the calendar year, the SIU is investigating grants valued at Virtually R906-million, involving forty NPOs and NPCs, Mothibi reported.

He explained the SIU would utilize “soon” to the Presidential Proclamation, at first granted in Oct 2020 to analyze corruption involving lottery grants, to be extended to include procurement because of the NLC.

The SIU investigation experienced to this point led to thirteen disciplinary referrals into the NLC, and administrative referrals to SARS and the businesses and Mental Attributes Fee to blacklist men and women implicated from the looting. Issues involving two persons had been referred to the Authorized Apply Council and the SA Institute of Chartered Accountants.

The SIU had noticed several tendencies underneath the prior NLC board and government - most of whom have already been implicated in looting - Mothibi instructed MPs.

This included a “development of collusion in between NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “basic maladministration inside the approval of grants,” he claimed.

Sluggish development with the NPA
The SIU has frozen homes, Qualities, automobiles and other assets worthy of tens of tens of millions which were purchased with lottery cash, but MPs expressed worry at sluggish development in prosecuting People linked to the looting. (The SIU is mandated only to Get better belongings purchased with stolen point out cash and does not have prosecuting powers).

Whilst the SIU has referred fifteen matters to the NPA, so far only two individuals have been introduced in advance of a court. Two Gentlemen appeared in court docket in Kimberley recently in connection with misappropriated funds gathered to get a project to beat gender-based mostly violence.

In August 2022 Christopher Tshivule was sentenced to eight decades in prison for his component in a very R1.five-million lottery grant fraud. Prices from two people today billed with him, who the SIU has referred to as “kingpins” from the corruption that confused the NLC, ended up dropped.

Important-Normal Mmeli Makinyane, the performing divisional commissioner for priority offences, informed MPs which the Hawks ended up at this time investigating 16 lottery corruption-related situations. Yet another a person - the Kimberley make any difference - is ahead of a court docket and two have already been sent into the NPA for a decision to prosecute. An additional 5 scenarios are increasingly being investigated through the SAPS detective and forensic services, he stated.

Describing the reasons for the hold off in prosecutions, NPA Deputy National Director Rodney de Kock stated part of The key reason why was which the Hawks had to do even more investigations every time they received dossiers with the SIU.

“In essence, the investigations undertaken from the SIU do not satisfy criminal standards for prosecutions.”

Hence, the NPA had to work with investigators during the DPCI (the Hawks) and SAPS to conduct criminal investigations and be sure that the evidence fulfills felony prosecution standards, he claimed, introducing: “Having said that, the do the job of your SIU is important and contributes greatly to this method.”

De Kock said which the SIU’s investigation “generally brings about many referrals. The referrals may well eventually cause a single docket and a single court docket situation.”

He mentioned that twelve issues, which are “about eighty five% full”, ended up becoming jointly investigated because of the Hawks and also the SIU’s Specialised Economic Operations Device. (Most of these circumstances, seven of which were lodged in 2020, include former NLC Main functioning officer Phillemon Letwaba, who resigned less than a cloud in 2022, and Pretoria law firm Leslie Ramulifho.)

De Kock explained the NPA faced various “issues” in prosecuting situations. These, he mentioned, integrated

the lapse of your time involving when the offences were being dedicated and also the issuing with the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Previously this calendar year, the SIU informed the committee that essential files required in a few prosecutions were deleted within the NLC Pc technique or experienced long gone lacking from Metrofile, a warehouse where copies of documents are archived and stored);
the fact that some implicated people are still employed by NLC; and
A obstacle to the legality of the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to ensuring finalisation in these issues. To this conclude, a group of dedicated prosecutors has long been allotted to supervise all NLC matters currently underneath investigation,” de Kock stated. “Issues are handled to be a priority. The moment [the] investigations are finished, the NPA is likely to make a call.”

What the companies say (or don’t)
GroundUp was only in the position to get remark from one of several 5 providers accused from the SIU in Parliament of producing fraudulent annual economic statements,TTP Consulting.

Aubrey Moeng, considered one of TTP’s two administrators, reported in an email in reaction to thoughts: “Because of consumer confidentiality, we desire to advise that TTP Consulting is not prepared to divulge customers’ economical confidential info with the general public or media … with no consent on the shopper or simply a legal rationale.”

The business is usually a “companion” of various point out entities, which includes SARS as well as CIPC, In line with its Web site.

Neither of the two directors of Dzata Accountants, who are the two detailed as inactive about the CIPC sign-up of organizations, responded to emailed inquiries. The business has actually been deregistered because of the CIPC for failing to submit economical statements due to the fact 2021.

The only director of Mageba Ntuli Trading and Consulting Provider, Patrick Zulu, died three yrs ago, In keeping with official data. The organization was deregistered because of the CIPC for failing to post monetary statements due to the fact 2021.

Matamela Magodi, the only real director of Magodi Consultants, didn't respond to concerns emailed to him.

GroundUp was not able to come across any listing for Tafta Consulting and Accounting Services Together with the CIPC. We ended up also not able to trace any of the business’s directors to ask for remark.

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