The accountants who helped loot the Lottery

The accountants who helped loot the Lottery

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The Unique Investigating Unit has recognized 5 accounting corporations that aided loot Lottery funds. Graphic: Lisa Nelson

The Distinctive Investigating Device has discovered five accounting and auditing firms that helped non-earnings firms loot Lottery money intended for “excellent will cause”.
The accounting firms compiled fraudulent financial statements employed by these companies to submit an application for Lottery funding, the SIU advised Parliament.
Acting chief countrywide investigations officer Zodwa Xesibe explained the SIU would get action to own these corporations blacklisted.
A 4-calendar year probe through the ruay Particular Investigating Device (SIU) has exposed 5 accounting and auditing companies that served dodgy non-profit firms loot numerous millions of rands intended for “great will cause” with the Lottery.

These firms ended up explained by the SIU as “Skilled enablers,” who “compiled fraudulent economical statements” which were used by the companies to apply for Lottery funding.

The five businesses had been named in Parliament by the SIU’s acting chief countrywide investigations officer Zodwa Xesibe. They are TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Providers.

Fraudulent financials made by these five accounting companies served virtually forty organizations get their palms on lottery funding, in accordance with the SIU presentation.

Determined by a Resource made up of knowledge with all lottery grants considering the fact that 2002, these businesses obtained over R314-million in funding.

“These NPCs have been funded with the Nationwide Lotteries Commission (NLC) nevertheless the cash were not utilized for his or her meant function,” Xesibe advised Parliament’s Trade, Business and Competitors Portfolio Committee very last week.

The SIU, the Hawks as well as National Prosecuting Authority (NPA) had been in Parliament to report to the committee on progress in bringing men and women and organisations involved with looting the lottery to reserve.

Xesibe informed GroundUp that the SIU intended to lodge complaints against the accounting corporations associated and was examining if these companies had been registered and, In that case, with which Skilled bodies.

“We want these providers being blacklisted,” she instructed GroundUp.

To qualify for Lottery funding, an organisation was required to deliver two decades of yearly economic statements, Xesibe defined in Parliament.

Nevertheless, being an ongoing 6-year investigation into lottery corruption by GroundUp has unveiled, hijacked non-profit organisations (NPOs) or new shelf non-income businesses (NPCs) without any money track records had been used to make an application for funding.

In some circumstances, Practically similar economic statements have been made for unrelated organisations, usually with just the names of your organisations adjusted, GroundUp’s investigation located.

Documents submitted by authentic NPCs for unsuccessful grant programs were being typically used by new or hijacked NPCs and NPOs to make an application for funding. The main points and documents with the unsuccessful applicants had been provided by senior Lottery officers for the dodgy applicants.

With cursory or - normally - no verification, these dodgy applicants had been awarded a lot of rands in grants. Occasionally more tranches of funds have been paid out out without the need of Significantly checking within the development of jobs.

The vast majority of such grants have been designed by using proactive funding, which was at the guts with the looting on the lottery. Proactive funding permitted the Minister of Trade, Sector and Level of competition, or maybe the NLC at the side of its board, to establish brings about to fund with no initial demanding an application. This was stopped each time a new NLC board was appointed.

R2-billion in grants under investigation
SIU head Advocate Andy Mothibi explained the SIU was currently investigating grants valued at above R2-billion, as well as unit was nevertheless on a regular basis acquiring idea-offs about far more corruption.

He instructed MPs which the SIU’s investigation had been broken into a few phases: the very first, which has been finalised, probed dodgy grants amounting to R280-million, and the 2nd, also done, associated R247-million. From the 3rd period, as a consequence of be finalised at the conclusion of the yr, the SIU is investigating grants valued at Practically R906-million, involving 40 NPOs and NPCs, Mothibi mentioned.

He stated that the SIU would implement “soon” for that Presidential Proclamation, originally granted in Oct 2020 to investigate corruption involving lottery grants, to generally be extended to include procurement via the NLC.

The SIU investigation had up to now brought about 13 disciplinary referrals on the NLC, and administrative referrals to SARS and the businesses and Mental Properties Commission to blacklist men and women implicated during the looting. Complaints involving two individuals were referred to the Legal Apply Council as well as SA Institute of Chartered Accountants.

The SIU experienced noticed numerous tendencies under the previous NLC board and govt - lots of whom are already implicated in looting - Mothibi informed MPs.

This integrated a “craze of collusion among NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “basic maladministration within the acceptance of grants,” he mentioned.

Gradual progress through the NPA
The SIU has frozen homes, Houses, vehicles as well as other belongings really worth tens of thousands and thousands which were bought with lottery funds, but MPs expressed problem at sluggish development in prosecuting All those linked to the looting. (The SIU is mandated only to Get well property bought with stolen point out cash and doesn't have prosecuting powers).

Though the SIU has referred fifteen issues to the NPA, up to now only two folks have been brought right before a court. Two Gentlemen appeared in courtroom in Kimberley a short while ago in reference to misappropriated cash collected for your venture to beat gender-dependent violence.

In August 2022 Christopher Tshivule was sentenced to eight yrs in prison for his part inside of a R1.5-million lottery grant fraud. Rates in opposition to two men and women charged with him, who the SIU has referred to as “kingpins” within the corruption that confused the NLC, had been dropped.

Important-Standard Mmeli Makinyane, the performing divisional commissioner for precedence offences, explained to MPs which the Hawks had been now investigating sixteen lottery corruption-associated circumstances. A further 1 - the Kimberley make a difference - is in advance of a courtroom and two are actually despatched into the NPA for a call to prosecute. A further 5 circumstances are being investigated through the SAPS detective and forensic products and services, he said.

Explaining The explanations for the delay in prosecutions, NPA Deputy Countrywide Director Rodney de Kock stated Component of the reason was the Hawks needed to do further more investigations every time they acquired dossiers within the SIU.

“In essence, the investigations carried out through the SIU will not fulfill prison expectations for prosecutions.”

Hence, the NPA experienced to work with investigators in the DPCI (the Hawks) and SAPS to perform legal investigations and make certain that the evidence satisfies felony prosecution expectations, he explained, including: “That said, the function from the SIU is important and contributes enormously to this process.”

De Kock claimed that the SIU’s investigation “usually ends in numerous referrals. The referrals may possibly finally result in just one docket and one court circumstance.”

He reported that twelve issues, that happen to be “close to eighty five% comprehensive”, have been currently being jointly investigated with the Hawks as well as the SIU’s Specialised Financial Operations Unit. (A large number of scenarios, seven of which ended up lodged in 2020, involve previous NLC Main working officer Phillemon Letwaba, who resigned less than a cloud in 2022, and Pretoria attorney Leslie Ramulifho.)

De Kock stated the NPA confronted quite a few “problems” in prosecuting conditions. These, he claimed, provided

the lapse of your time among if the offences had been dedicated as well as issuing in the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Earlier this year, the SIU informed the committee that important files wanted in a few prosecutions had been deleted from your NLC Laptop program or experienced absent missing from Metrofile, a warehouse in which copies of documents are archived and saved);
The reality that some implicated folks are still used by NLC; and
A problem on the legality in the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is dedicated to ensuring finalisation in these issues. To this finish, a workforce of devoted prosecutors has long been allocated to oversee all NLC matters currently below investigation,” de Kock reported. “Matters are dealt with to be a precedence. Once [the] investigations are accomplished, the NPA could make a call.”

What the businesses say (or don’t)
GroundUp was only able to get remark from one of many five organizations accused via the SIU in Parliament of producing fraudulent once-a-year fiscal statements,TTP Consulting.

Aubrey Moeng, considered one of TTP’s two administrators, reported in an e-mail in reaction to inquiries: “Due to customer confidentiality, we want to recommend that TTP Consulting just isn't prepared to divulge customers’ economical confidential facts with the general public or media … without the consent in the customer or maybe a lawful rationale.”

The organization is often a “lover” of several point out entities, including SARS and also the CIPC, In accordance with its Web page.

Neither of the two administrators of Dzata Accountants, who're the two outlined as inactive on the CIPC sign-up of organizations, responded to emailed questions. The company has actually been deregistered because of the CIPC for failing to submit money statements because 2021.

The only director of Mageba Ntuli Trading and Consulting Provider, Patrick Zulu, died a few several years back, Based on official records. The business was deregistered with the CIPC for failing to submit monetary statements given that 2021.

Matamela Magodi, the only director of Magodi Consultants, did not reply to issues emailed to him.

GroundUp was struggling to uncover any listing for Tafta Consulting and Accounting Companies Together with the CIPC. We were also struggling to trace any of the business’s administrators to ask for remark.