The accountants who aided loot the Lottery

The accountants who aided loot the Lottery

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The Special Investigating Unit has recognized five accounting companies that served loot Lottery money. Graphic: Lisa Nelson

The Distinctive Investigating Unit has recognized 5 accounting and auditing corporations that served non-income organizations loot Lottery revenue intended for “very good results in”.
The accounting firms compiled fraudulent monetary statements used by these organizations to make an application for Lottery funding, the SIU informed Parliament.
Acting Main national investigations officer Zodwa Xesibe said the SIU would acquire action to obtain these corporations blacklisted.
A 4-calendar year probe through the ruay Particular Investigating Unit (SIU) has uncovered 5 accounting and auditing corporations that aided dodgy non-financial gain companies loot countless millions of rands designed for “good leads to” from the Lottery.

These companies have been explained through the SIU as “Expert enablers,” who “compiled fraudulent economical statements” which were used by the companies to submit an application for Lottery funding.

The 5 providers were being named in Parliament via the SIU’s acting Main countrywide investigations officer Zodwa Xesibe. They're TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Companies.

Fraudulent financials made by these 5 accounting companies served virtually 40 businesses get their palms on lottery funding, according to the SIU presentation.

Based on a Software that contains info with all lottery grants since 2002, these companies received in excess of R314-million in funding.

“These NPCs were being funded via the Countrywide Lotteries Commission (NLC) although the cash were not utilized for his or her meant function,” Xesibe advised Parliament’s Trade, Industry and Opposition Portfolio Committee past week.

The SIU, the Hawks and also the Nationwide Prosecuting Authority (NPA) ended up in Parliament to report to the committee on progress in bringing people today and organisations involved with looting the lottery to guide.

Xesibe told GroundUp the SIU intended to lodge grievances from the accounting companies included and was checking if these corporations were being registered and, if so, with which professional bodies.

“We would like these organizations to be blacklisted,” she instructed GroundUp.

To qualify for Lottery funding, an organisation was necessary to make two a long time of once-a-year monetary statements, Xesibe discussed in Parliament.

Nonetheless, being an ongoing 6-calendar year investigation into lottery corruption by GroundUp has discovered, hijacked non-revenue organisations (NPOs) or new shelf non-income organizations (NPCs) without monetary monitor data have been accustomed to apply for funding.

In a few occasions, Nearly identical financial statements ended up generated for unrelated organisations, generally with just the names on the organisations modified, GroundUp’s investigation found.

Files submitted by real NPCs for unsuccessful grant purposes were frequently utilized by new or hijacked NPCs and NPOs to make an application for funding. The details and documents of the unsuccessful applicants had been supplied by senior Lottery officials to the dodgy applicants.

With cursory or - often - no verification, these dodgy applicants were being awarded many rands in grants. Sometimes more tranches of funds ended up paid out without the need of Considerably checking over the progress of initiatives.

The overwhelming majority of those grants were being created by using proactive funding, which was at the heart with the looting on the lottery. Proactive funding authorized the Minister of Trade, Sector and Competitiveness, or the NLC together with its board, to establish results in to fund without first demanding an software. This was stopped every time a new NLC board was appointed.

R2-billion in grants beneath investigation
SIU head Advocate Andy Mothibi mentioned the SIU was currently investigating grants valued at around R2-billion, plus the unit was continue to often receiving suggestion-offs about additional corruption.

He informed MPs the SIU’s investigation were damaged into three phases: the primary, that has been finalised, probed dodgy grants amounting to R280-million, and the 2nd, also completed, involved R247-million. Inside the third stage, resulting from be finalised at the conclusion of the calendar year, the SIU is investigating grants valued at Virtually R906-million, involving 40 NPOs and NPCs, Mothibi claimed.

He reported which the SIU would utilize “shortly” for that Presidential Proclamation, at first granted in October 2020 to research corruption involving lottery grants, to get extended to include procurement through the NLC.

The SIU investigation had to this point led to 13 disciplinary referrals to the NLC, and administrative referrals to SARS and the businesses and Mental Homes Fee to blacklist folks implicated within the looting. Complaints involving two persons had been referred on the Lawful Practice Council as well as SA Institute of Chartered Accountants.

The SIU had observed many traits underneath the former NLC board and govt - most of whom have already been implicated in looting - Mothibi advised MPs.

This provided a “pattern of collusion among NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “common maladministration inside the approval of grants,” he stated.

Slow progress via the NPA
The SIU has frozen residences, Qualities, cars as well as other belongings truly worth tens of hundreds of thousands which were bought with lottery cash, but MPs expressed concern at sluggish development in prosecuting those associated with the looting. (The SIU is mandated only to Get well belongings acquired with stolen point out resources and does not have prosecuting powers).

Although the SIU has referred fifteen issues into the NPA, up to now only two individuals have been brought right before a court docket. Two men appeared in court in Kimberley not too long ago in connection with misappropriated funds gathered for just a venture to fight gender-primarily based violence.

In August 2022 Christopher Tshivule was sentenced to eight a long time in prison for his element in the R1.5-million lottery grant fraud. Expenses towards two folks charged with him, who the SIU has called “kingpins” while in the corruption that overcome the NLC, were dropped.

Major-Typical Mmeli Makinyane, the acting divisional commissioner for precedence offences, informed MPs the Hawks had been currently investigating 16 lottery corruption-associated scenarios. A further one particular - the Kimberley issue - is just before a courtroom and two are already sent for the NPA for a decision to prosecute. A further 5 scenarios are now being investigated because of the SAPS detective and forensic expert services, he explained.

Describing The explanations to the hold off in prosecutions, NPA Deputy Nationwide Director Rodney de Kock said Component of The explanation was that the Hawks had to do even further investigations whenever they acquired dossiers from your SIU.

“In essence, the investigations carried out with the SIU usually do not fulfill criminal benchmarks for prosecutions.”

As a result, the NPA experienced to operate with investigators within the DPCI (the Hawks) and SAPS to carry out prison investigations and be sure that the proof satisfies prison prosecution specifications, he explained, incorporating: “That said, the get the job done of your SIU is essential and contributes tremendously to this process.”

De Kock said which the SIU’s investigation “typically ends in a number of referrals. The referrals may possibly in the end bring about a person docket and just one court circumstance.”

He mentioned that 12 matters, that are “close to 85% finish”, were getting jointly investigated via the Hawks along with the SIU’s Specialised Financial Functions Device. (A large number of situations, 7 of which ended up lodged in 2020, require previous NLC chief working officer Phillemon Letwaba, who resigned below a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)

De Kock said the NPA confronted many “problems” in prosecuting instances. These, he reported, involved

the lapse of time between in the event the offences ended up dedicated as well as issuing on the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Previously this calendar year, the SIU informed the committee that critical documents required in a few prosecutions had been deleted through the NLC computer procedure or had long gone lacking from Metrofile, a warehouse exactly where copies of files are archived and saved);
the fact that some implicated people are still used by NLC; and
A problem on the legality on the Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is committed to guaranteeing finalisation in these matters. To this end, a workforce of committed prosecutors is allotted to oversee all NLC issues at the moment under investigation,” de Kock explained. “Issues are handled to be a priority. The moment [the] investigations are accomplished, the NPA is likely to make a call.”

What the businesses say (or don’t)
GroundUp was only capable of get comment from among the five corporations accused by the SIU in Parliament of producing fraudulent annual economic statements,TTP Consulting.

Aubrey Moeng, considered one of TTP’s two administrators, said within an e mail in response to questions: “Because of shopper confidentiality, we wish to recommend that TTP Consulting will not be prepared to divulge clientele’ economic private facts with the public or media … without the consent of your consumer or simply a legal motive.”

The business is often a “partner” of numerous condition entities, which include SARS and the CIPC, In line with its Web page.

Neither of The 2 directors of Dzata Accountants, who are both listed as inactive on the CIPC sign up of corporations, responded to emailed issues. The corporate has actually been deregistered with the CIPC for failing to submit money statements considering that 2021.

The sole director of Mageba Ntuli Buying and selling and Consulting Service, Patrick Zulu, died 3 decades ago, In keeping with official data. The organization was deregistered with the CIPC for failing to post financial statements due to the fact 2021.

Matamela Magodi, the sole director of Magodi Consultants, did not respond to queries emailed to him.

GroundUp was not able to uncover any listing for Tafta Consulting and Accounting Expert services While using the CIPC. We were being also struggling to trace any of the corporate’s directors to ask for remark.

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