The Exclusive Investigating Device has determined five accounting firms that aided loot Lottery money. Graphic: Lisa Nelson
The Unique Investigating Device has identified 5 accounting and auditing firms that assisted non-gain organizations loot Lottery funds supposed for “fantastic will cause”.
The accounting companies compiled fraudulent economic statements employed by these corporations to submit an application for Lottery funding, the SIU instructed Parliament.
Acting Main national investigations officer Zodwa Xesibe said the SIU would just take motion to own these corporations blacklisted.
A 4-year probe because of the hihuay Specific Investigating Device (SIU) has uncovered 5 accounting and auditing corporations that served dodgy non-earnings corporations loot hundreds of an incredible number of rands designed for “very good results in” with the Lottery.
These corporations were described with the SIU as “Experienced enablers,” who “compiled fraudulent fiscal statements” that were utilized by the companies to make an application for Lottery funding.
The five businesses had been named in Parliament with the SIU’s acting Main nationwide investigations officer Zodwa Xesibe. They are really TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Expert services.
Fraudulent financials produced by these five accounting corporations served virtually 40 organizations get their hands on lottery funding, based on the SIU presentation.
Determined by a tool made up of details with all lottery grants considering the fact that 2002, these businesses bought over R314-million in funding.
“These NPCs were being funded because of the Nationwide Lotteries Commission (NLC) even so the cash weren't applied for his or her supposed reason,” Xesibe instructed Parliament’s Trade, Sector and Competition Portfolio Committee very last week.
The SIU, the Hawks as well as National Prosecuting Authority (NPA) ended up in Parliament to report back to the committee on development in bringing people today and organisations linked to looting the lottery to guide.
Xesibe instructed GroundUp the SIU intended to lodge complaints against the accounting companies concerned and was examining if these corporations were being registered and, If that's so, with which Experienced bodies.
“We want these organizations to get blacklisted,” she informed GroundUp.
To qualify for Lottery funding, an organisation was necessary to create two years of yearly monetary statements, Xesibe described in Parliament.
However, being an ongoing six-yr investigation into lottery corruption by GroundUp has discovered, hijacked non-revenue organisations (NPOs) or new shelf non-financial gain businesses (NPCs) without any fiscal observe information have been used to submit an application for funding.
In a few scenarios, Pretty much identical monetary statements had been generated for unrelated organisations, often with just the names with the organisations altered, GroundUp’s investigation observed.
Files submitted by authentic NPCs for unsuccessful grant purposes have been frequently used by new or hijacked NPCs and NPOs to make an application for funding. The small print and paperwork on the unsuccessful applicants ended up supplied by senior Lottery officers to your dodgy applicants.
With cursory or - typically - no verification, these dodgy applicants had been awarded numerous rands in grants. Often added tranches of money were being compensated out with no A lot examining on the progress of jobs.
The vast majority of those grants were being created via proactive funding, which was at the heart of the looting in the lottery. Proactive funding permitted the Minister of Trade, Field and Competitors, or even the NLC at the side of its board, to determine triggers to fund devoid of first 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 claimed the SIU was at the moment investigating grants valued at more than R2-billion, along with the device was nevertheless routinely receiving tip-offs about far more corruption.
He explained to MPs the SIU’s investigation were damaged into 3 phases: the main, that has been finalised, probed dodgy grants amounting to R280-million, and the second, also accomplished, concerned R247-million. From the 3rd period, on account of be finalised at the conclusion of the calendar year, the SIU is investigating grants valued at almost R906-million, involving forty NPOs and NPCs, Mothibi explained.
He explained the SIU would apply “soon” for the Presidential Proclamation, at first granted in Oct 2020 to research corruption involving lottery grants, being prolonged to incorporate procurement with the NLC.
The SIU investigation had to this point resulted in thirteen disciplinary referrals into the NLC, and administrative referrals to SARS and the Companies and Mental Qualities Fee to blacklist individuals implicated during the looting. Issues involving two folks were referred for the Authorized Observe Council along with the SA Institute of Chartered Accountants.
The SIU experienced observed numerous tendencies underneath the previous NLC board and government - lots of whom are already implicated in looting - Mothibi explained to MPs.
This integrated a “trend of collusion in between NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “normal maladministration from the approval of grants,” he stated.
Gradual progress because of the NPA
The SIU has frozen properties, Attributes, vehicles as well as other property really worth tens of thousands and thousands which were bought with lottery money, but MPs expressed problem at gradual development in prosecuting All those involved in the looting. (The SIU is mandated only to Get better assets bought with stolen condition resources and does not have prosecuting powers).
Although the SIU has referred 15 matters on the NPA, up to now only two folks have been introduced in advance of a court. Two Adult men appeared in court docket in Kimberley not too long ago in reference to misappropriated cash collected for a project to fight gender-dependent violence.
In August 2022 Christopher Tshivule was sentenced to 8 yrs in jail for his part in a R1.5-million lottery grant fraud. Costs from two men and women charged with him, who the SIU has referred to as “kingpins” from the corruption that overwhelmed the NLC, have been dropped.
Main-Standard Mmeli Makinyane, the performing divisional commissioner for precedence offences, told MPs that the Hawks had been at the moment investigating 16 lottery corruption-associated circumstances. A further a person - the Kimberley subject - is ahead of a courtroom and two are already sent into the NPA for a choice to prosecute. A further 5 situations are increasingly being investigated through the SAPS detective and forensic providers, he said.
Detailing the reasons to the hold off in prosecutions, NPA Deputy National Director Rodney de Kock explained A part of The rationale was which the Hawks needed to do additional investigations whenever they obtained dossiers from the SIU.
“In essence, the investigations undertaken via the SIU don't satisfy legal expectations for prosecutions.”
Therefore, the NPA had to operate with investigators during the DPCI (the Hawks) and SAPS to perform legal investigations and make sure the evidence satisfies felony prosecution requirements, he claimed, adding: “Having said that, the do the job with the SIU is vital and contributes tremendously to this method.”
De Kock reported that the SIU’s investigation “normally results in a number of referrals. The referrals might in the long run bring about a single docket and one particular courtroom scenario.”
He reported that twelve matters, which are “roughly 85% total”, had been becoming jointly investigated by the Hawks and the SIU’s Specialised Financial Operations Unit. (Most of these conditions, 7 of which had been lodged in 2020, contain former NLC Main running officer Phillemon Letwaba, who resigned below a cloud in 2022, and Pretoria law firm Leslie Ramulifho.)
De Kock explained the NPA confronted many “challenges” in prosecuting situations. These, he stated, involved
the lapse of time among if the offences were being dedicated along with the issuing on the Presidential Proclamation on one November 2020;
“unavailability of witnesses and/or documentary proof” (Before this calendar year, the SIU told the committee that key files needed in certain prosecutions were deleted with the NLC Laptop or computer program or had absent missing from Metrofile, a warehouse where by copies of files are archived and stored);
The point that some implicated people today are still used by NLC; and
A challenge to your legality in the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is committed to ensuring finalisation in these matters. To this conclusion, a team of devoted prosecutors continues to be allocated to supervise all NLC matters currently beneath investigation,” de Kock said. “Matters are dealt with for a precedence. The moment [the] investigations are done, the NPA could make a decision.”
What the businesses say (or don’t)
GroundUp was only able to get remark from one of many five organizations accused with the SIU in Parliament of producing fraudulent once-a-year financial statements,TTP Consulting.
Aubrey Moeng, amongst TTP’s two administrators, claimed in an e-mail in reaction to issues: “As a consequence of customer confidentiality, we need to advise that TTP Consulting will not be prepared to disclose clientele’ financial confidential information and facts with the public or media … with no consent on the shopper or perhaps a authorized motive.”
The company is really a “spouse” of many state entities, which include SARS as well as CIPC, Based on its Web site.
Neither of The 2 administrators of Dzata Accountants, who're each listed as inactive over the CIPC sign-up of companies, responded to emailed thoughts. The corporate has become deregistered by the CIPC for failing to submit economical statements considering that 2021.
The only real director of Mageba Ntuli Trading and Consulting Provider, Patrick Zulu, died a few a long time in the past, according to Formal documents. The organization was deregistered through the CIPC for failing to submit fiscal statements due to the fact 2021.
Matamela Magodi, the only director of Magodi Consultants, did not respond to thoughts emailed to him.
GroundUp was struggling to obtain any listing for Tafta Consulting and Accounting Solutions With all the CIPC. We were also struggling to trace any of the corporate’s directors to request remark.