The accountants who helped loot the Lottery

The accountants who helped loot the Lottery

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The Special Investigating Device has discovered 5 accounting corporations that helped loot Lottery resources. Graphic: Lisa Nelson

The Special Investigating Device has determined five accounting and auditing corporations that aided non-revenue firms loot Lottery funds intended for “great brings about”.
The accounting firms compiled fraudulent monetary statements employed by these organizations to make an application for Lottery funding, the SIU advised Parliament.
Performing Main nationwide investigations officer Zodwa Xesibe stated the SIU would take action to have these firms blacklisted.
A four-yr probe by the lottovip Specific Investigating Device (SIU) has uncovered 5 accounting and auditing corporations that served dodgy non-revenue providers loot a huge selection of an incredible number of rands designed for “great brings about” in the Lottery.

These companies have been described with the SIU as “Qualified enablers,” who “compiled fraudulent monetary statements” which were used by the businesses to make an application for Lottery funding.

The five companies were being named in Parliament from the SIU’s acting chief countrywide investigations officer Zodwa Xesibe. They may be TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Companies.

Fraudulent financials produced by these five accounting companies aided approximately 40 firms get their arms on lottery funding, in accordance with the SIU presentation.

Dependant on a Software that contains data with all lottery grants because 2002, these corporations received about R314-million in funding.

“These NPCs were funded with the Countrywide Lotteries Fee (NLC) though the funds weren't applied for his or her intended goal,” Xesibe told Parliament’s Trade, Field and Competitors Portfolio Committee previous week.

The SIU, the Hawks and the Countrywide Prosecuting Authority (NPA) have been in Parliament to report back to the committee on progress in bringing men and women and organisations linked to looting the lottery to ebook.

Xesibe explained to GroundUp that the SIU intended to lodge grievances from the accounting corporations associated and was examining if these firms had been registered and, If that is so, with which Expert bodies.

“We want these organizations to generally be blacklisted,” she explained to GroundUp.

To qualify for Lottery funding, an organisation was necessary to develop two a long time of annual monetary statements, Xesibe defined in Parliament.

Nonetheless, being an ongoing six-calendar year investigation into lottery corruption by GroundUp has disclosed, hijacked non-gain organisations (NPOs) or new shelf non-gain organizations (NPCs) without having economic keep track of information ended up used to make an application for funding.

In a few scenarios, Nearly identical economic statements ended up manufactured for unrelated organisations, frequently with just the names of the organisations modified, GroundUp’s investigation identified.

Paperwork submitted by real NPCs for unsuccessful grant programs had been typically used by new or hijacked NPCs and NPOs to submit an application for funding. The small print and documents with the unsuccessful applicants have been equipped by senior Lottery officials to your dodgy applicants.

With cursory or - typically - no verification, these dodgy applicants were being awarded an incredible number of rands in grants. Occasionally further tranches of resources have been paid out with out much examining around the progress of initiatives.

The overwhelming majority of such grants were being manufactured by means of proactive funding, which was at the guts of the looting in the lottery. Proactive funding permitted the Minister of Trade, Market and Level of competition, or maybe the NLC at the side of its board, to determine causes to fund without initial requiring an software. This was stopped any time a new NLC board was appointed.

R2-billion in grants less than investigation
SIU head Advocate Andy Mothibi explained the SIU was presently investigating grants valued at over R2-billion, plus the device was nevertheless routinely acquiring tip-offs about far more corruption.

He informed MPs the SIU’s investigation were damaged into a few phases: the very first, which has been finalised, probed dodgy grants amounting to R280-million, and the second, also finished, concerned R247-million. Inside the third section, due to be finalised at the conclusion of the 12 months, the SIU is investigating grants valued at Practically R906-million, involving 40 NPOs and NPCs, Mothibi mentioned.

He said the SIU would use “soon” for the Presidential Proclamation, at first granted in October 2020 to investigate corruption involving lottery grants, to become prolonged to incorporate procurement through the NLC.

The SIU investigation experienced so far resulted in 13 disciplinary referrals into the NLC, and administrative referrals to SARS and the Companies and Intellectual Qualities Commission to blacklist persons implicated in the looting. Complaints involving two individuals had been referred towards the Legal Practice Council and also the SA Institute of Chartered Accountants.

The SIU had noticed many developments under the previous NLC board and govt - lots of whom are actually implicated in looting - Mothibi advised MPs.

This integrated a “development of collusion among NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “standard maladministration within the acceptance of grants,” he said.

Slow progress via the NPA
The SIU has frozen houses, Houses, cars and trucks together with other belongings well worth tens of thousands and thousands which were acquired with lottery cash, but MPs expressed worry at gradual development in prosecuting Those people involved in the looting. (The SIU is mandated only to recover assets acquired with stolen condition money and does not have prosecuting powers).

While the SIU has referred fifteen issues for the NPA, up to now only two folks have been introduced just before a court. Two men appeared in court docket in Kimberley just lately in connection with misappropriated resources collected to get a project to battle gender-primarily based violence.

In August 2022 Christopher Tshivule was sentenced to 8 many years in jail for his section within a R1.five-million lottery grant fraud. Rates towards two persons billed with him, who the SIU has called “kingpins” in the corruption that overwhelmed the NLC, had been dropped.

Important-General Mmeli Makinyane, the performing divisional commissioner for precedence offences, instructed MPs the Hawks have been at the moment investigating 16 lottery corruption-associated instances. An additional 1 - the Kimberley matter - is prior to a court docket and two are sent for the NPA for a call to prosecute. An additional 5 instances are increasingly being investigated with the SAPS detective and forensic providers, he reported.

Describing The explanations with the delay in prosecutions, NPA Deputy Nationwide Director Rodney de Kock claimed A part of The rationale was the Hawks needed to do further more investigations once they obtained dossiers from your SIU.

“In essence, the investigations undertaken through the SIU usually do not fulfill criminal requirements for prosecutions.”

As a result, the NPA had to work with investigators within the DPCI (the Hawks) and SAPS to perform legal investigations and make certain that the proof fulfills criminal prosecution requirements, he stated, including: “Having said that, the function with the SIU is essential and contributes considerably to this process.”

De Kock mentioned the SIU’s investigation “often results in several referrals. The referrals could eventually result in just one docket and one particular court docket circumstance.”

He reported that 12 matters, which happen to be “roughly 85% comprehensive”, were being remaining jointly investigated by the Hawks and also the SIU’s Specialised Economic Operations Device. (Most of these situations, seven of which were being lodged in 2020, require former NLC Main running officer Phillemon Letwaba, who resigned underneath a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)

De Kock reported the NPA faced several “troubles” in prosecuting situations. These, he said, involved

the lapse of time involving once the offences were committed and the issuing in the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary proof” (Before this calendar year, the SIU informed the committee that crucial files desired in certain prosecutions were deleted within the NLC computer system or had long gone missing from Metrofile, a warehouse the place copies of paperwork are archived and stored);
the fact that some implicated individuals remain employed by NLC; and
A obstacle to your legality in the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is dedicated to making certain finalisation in these issues. To this finish, a staff of dedicated prosecutors has long been allocated to supervise all NLC issues presently beneath investigation,” de Kock reported. “Matters are managed as a precedence. As soon as [the] investigations are accomplished, the NPA is likely to make a choice.”

What the companies say (or don’t)
GroundUp was only capable to get comment from among the list of five organizations accused through the SIU in Parliament of manufacturing fraudulent once-a-year economical statements,TTP Consulting.

Aubrey Moeng, considered one of TTP’s two directors, claimed in an electronic mail in response to questions: “Due to customer confidentiality, we desire to advise that TTP Consulting is just not prepared to disclose clientele’ money private details with the general public or media … with no consent with the shopper or simply a legal reason.”

The organization is often a “lover” of various point out entities, together with SARS as well as CIPC, In keeping with its Web page.

Neither of the two administrators of Dzata Accountants, that are equally shown as inactive within the CIPC sign up of providers, responded to emailed inquiries. The company has actually been deregistered through the CIPC for failing to post economical statements considering that 2021.

The only real director of Mageba Ntuli Trading and Consulting Support, Patrick Zulu, died 3 decades back, In accordance with official information. The corporate was deregistered from the CIPC for failing to post financial statements because 2021.

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

GroundUp was struggling to find any listing for Tafta Consulting and Accounting Solutions Together with the CIPC. We had been also struggling to trace any of the business’s administrators to ask for remark.