Lottery watchdog paid R300m in fraudulent payments, used for luxury cars and homes

With only three members remaining, the board of directors of the National Lotteries Commission no longer has a quorum.

File photo: Ashraf Hendricks

  • The SIU says it has concluded 12 of 50 cases in the first phase of its investigations into the misuse of National Lottery Commission funds.
  • The unit told parliament that funds amounting to R300 million had so far been spent on items such as cars and private homes.
  • The SIU said it would submit a final report on corruption within the NLC and nonprofit organizations to President Cyril Ramaphosa in April.

The Special Investigations Unit (SIU) told Parliament’s Portfolio Committee on Trade and Industry that it had uncovered corrupt payments worth R300 million from the National Lottery Commission ( NLC) to nonprofit organizations (NPOs) and nonprofit corporations (NPCs).

The SIU told the legislature Wednesday morning it had concluded 12 of 50 cases in the first phase of its investigations.

The SIU could not release the names of the individuals and organizations involved except when the report’s findings were finalized and action was taken.

The survey was launched in 2020.

The NLC is the sole regulator of lotteries and sports betting in South Africa, but also serves as a funder for non-governmental organizations established in causes aimed at improving the lives of South Africans.

The unit found that in a series of deals, millions of rands at a time were funneled from the NLC – funds to develop facilities such as drug treatment centres, retirement homes and youth empowerment centers , but were intended more for the purchase of luxury cars and homes.

The SIU says NPOs found guilty of embezzling funds, including the youth organization Inqaba Yokulinda, have seen assets from NLC funds seized, and NLC officials will be prosecuted. once the SIU’s final report is forwarded to the National Prosecuting Authority (NPA).

SIU Chief Counsel Andy Mothibi said while the investigation is not yet complete, where aspects of the investigation have revealed the need for further prosecution, those are being addressed as they progress. and as the need arises.

“It is only when these actions are public that we can mention the names. In this investigation, where we mention the names, the actions have been made public. We have preservation orders from the Special Court and we simply mention the names businesses and OPBs because they are public,” Motibi said.

Mothibi said the first phase of the report would be formally submitted to President Cyril Ramaphosa in April and that this version of the report would include names and companies. He called the report a “network of corrupt networks” and found a modus operandi that diverted funds through NPOs and legal firms.

“We discovered this part with rigorous investigative methods analyzing the flow of funds. We have now gathered evidence and can look for further results for action.

“We also observed a high level of collusion between some NLC, NPO and NPC officials,” Mothibi said.

In one example, Mothibi said R23 million was given to an NPO by the NLC which was intended for a care home, but R5 million of that amount went to a private bank account and ended up buy a luxury property.

He said where NLC officials were involved but had resigned, civil suits would be filed when the report was forwarded to the NPA.

“While resignations end their board membership and internal disciplinary action, a civil recovery perspective allows us to pursue civil action to recover funds from these individuals, whether they have resigned or no,” he said.

SIU National Investigations Manager Leonard Lekgetho said a preservation order was granted to the unit for Swartkop property owned by Tshifhiwa Magogodela, a Honda Jazz, and three Mercedes Benzes owned by Jabu Sibanda, an Audi A3 owned by Boitumeo Diutlwikeng.

“On the main claim, the SIU is seeking to reverse the award of the grant to Inqaba Yokulinda by NLC in the amount of R19.2 million. The SIU will also ask the court to order Buyisiwe Khoza, the CEO of the NPO, to repay the 5 million rand she used for her personal gain,” Lekgetho said.

Lekgatho said the brother of a senior NLC official received funds during the rout. The NLC conducted a disciplinary hearing against officials from January 2022 and is ongoing, although doubts have been expressed about the hearing.

Committee chairperson and African National Congress (ANC) MP Judy Hermans said the committee would call Trade and Industry Minister Ebrahim Patel to brief the committee on how the report will be implemented. once submitted to Ramaphosa.

Democratic Alliance MP Matt Cuthbert applauded the “remarkable job” of the SIU investigation, but expressed disappointment that Minister Patel did not attend the portfolio committee meeting.

“All of this while the ANC sat down and vilified journalists, silenced the opposition and tried to make sure we didn’t find out the rot,” Cuthbert said.

DA MP Dean MacPherson said the level of corruption does not happen on its own without being aided and abetted by the ANC and ministers who allowed it to continue without consequences and frustrated opposition attempts to find out .

Economic Freedom Fighters MP Yoliswa Yako said the report showed the “shocking ease” with which money intended to serve communities could be stolen. She expressed anger over Patel’s absence from the committee meeting.

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