The accountants who helped loot the Lottery

The accountants who helped loot the Lottery

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The Particular Investigating Unit has determined 5 accounting companies that aided loot Lottery funds. Graphic: Lisa Nelson

The Exclusive Investigating Device has identified five accounting and auditing firms that served non-earnings organizations loot Lottery revenue intended for “superior brings about”.
The accounting corporations compiled fraudulent financial statements utilized by these businesses to make an application for Lottery funding, the SIU explained to Parliament.
Acting chief national investigations officer Zodwa Xesibe claimed the SIU would take action to acquire these corporations blacklisted.
A 4-year probe with the hihuay Unique Investigating Device (SIU) has uncovered 5 accounting and auditing companies that assisted dodgy non-gain providers loot many many rands designed for “very good will cause” in the Lottery.

These firms were being described through the SIU as “Specialist enablers,” who “compiled fraudulent financial statements” which were employed by the businesses to apply for Lottery funding.

The five businesses ended up named in Parliament by the SIU’s acting chief 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 5 accounting corporations assisted almost 40 companies get their fingers on lottery funding, based on the SIU presentation.

According to a tool that contains data with all lottery grants because 2002, these corporations bought above R314-million in funding.

“These NPCs were being funded via the National Lotteries Fee (NLC) however the funds were not utilized for his or her meant goal,” Xesibe told Parliament’s Trade, Field and Competition Portfolio Committee past week.

The SIU, the Hawks as well as Nationwide Prosecuting Authority (NPA) had been in Parliament to report back to the committee on progress in bringing people and organisations associated with looting the lottery to ebook.

Xesibe explained to GroundUp which the SIU meant to lodge problems versus the accounting corporations included and was examining if these corporations had been registered and, If that's so, with which Experienced bodies.

“We want these companies to be blacklisted,” she instructed GroundUp.

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

Nevertheless, as an ongoing six-yr investigation into lottery corruption by GroundUp has exposed, hijacked non-revenue organisations (NPOs) or new shelf non-revenue firms (NPCs) with no fiscal observe data were being used to submit an application for funding.

In some situations, Virtually similar economic statements were made for unrelated organisations, typically with only the names with the organisations improved, GroundUp’s investigation uncovered.

Paperwork submitted by genuine NPCs for unsuccessful grant apps have been usually used by new or hijacked NPCs and NPOs to make an application for funding. The details and paperwork in the unsuccessful applicants were provided by senior Lottery officers towards the dodgy applicants.

With cursory or - normally - no verification, these dodgy applicants have been awarded countless rands in grants. In some cases extra tranches of money have been compensated out with no Significantly checking within the progress of projects.

The overwhelming majority of such grants ended up designed through proactive funding, which was at the heart on the looting of your lottery. Proactive funding allowed the Minister of Trade, Field and Opposition, or the NLC at the side of its board, to recognize causes to fund devoid of 1st demanding an application. This was stopped every time a new NLC board was appointed.

R2-billion in grants beneath investigation
SIU head Advocate Andy Mothibi reported the SIU was at the moment investigating grants valued at more than R2-billion, along with the unit was however frequently receiving tip-offs about a lot more corruption.

He informed MPs the SIU’s investigation had been broken into three phases: the very first, that has been finalised, probed dodgy grants amounting to R280-million, and the second, also completed, associated R247-million. From the third phase, as a result of be finalised at the conclusion of the year, the SIU is investigating grants valued at Practically R906-million, involving forty NPOs and NPCs, Mothibi reported.

He stated that the SIU would use “quickly” for that Presidential Proclamation, at first granted in Oct 2020 to analyze corruption involving lottery grants, for being prolonged to incorporate procurement with the NLC.

The SIU investigation experienced to this point triggered thirteen disciplinary referrals to the NLC, and administrative referrals to SARS and the businesses and Intellectual Houses Commission to blacklist people implicated in the looting. Complaints involving two individuals had been referred into the Authorized Observe Council plus the SA Institute of Chartered Accountants.

The SIU had observed quite a few traits beneath the preceding NLC board and executive - lots of whom have already been implicated in looting - Mothibi told MPs.

This included a “pattern of collusion concerning NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “standard maladministration within the acceptance of grants,” he reported.

Gradual development with the NPA
The SIU has frozen residences, properties, cars together with other property value tens of thousands and thousands that were bought with lottery cash, but MPs expressed concern at slow development in prosecuting Individuals involved in the looting. (The SIU is mandated only to Get well assets purchased with stolen point out money and doesn't have prosecuting powers).

Even though the SIU has referred 15 matters into the NPA, to date only two people have been brought right before a court. Two Adult men appeared in court docket in Kimberley not too long ago in reference to misappropriated resources collected for a venture to fight gender-based mostly violence.

In August 2022 Christopher Tshivule was sentenced to eight years in jail for his aspect inside of a R1.five-million lottery grant fraud. Prices in opposition to two men and women charged with him, who the SIU has called “kingpins” while in the corruption that overwhelmed the NLC, were being dropped.

Major-Typical Mmeli Makinyane, the acting divisional commissioner for precedence offences, instructed MPs which the Hawks were currently investigating 16 lottery corruption-linked instances. Another one particular - the Kimberley make any difference - is before a court and two are already despatched towards the NPA for a choice to prosecute. An additional five situations are now being investigated via the SAPS detective and forensic solutions, he claimed.

Conveying The explanations for your delay in prosecutions, NPA Deputy National Director Rodney de Kock stated Component of The key reason why was which the Hawks needed to do more investigations after they acquired dossiers in the SIU.

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

Hence, the NPA had to work with investigators inside the DPCI (the Hawks) and SAPS to perform criminal investigations and be sure that the proof meets felony prosecution standards, he reported, including: “That said, the perform with the SIU is essential and contributes significantly to this method.”

De Kock stated that the SIU’s investigation “usually leads to numerous referrals. The referrals may ultimately result in 1 docket and one courtroom situation.”

He stated that twelve matters, that are “somewhere around 85% full”, were being getting jointly investigated by the Hawks as well as the SIU’s Specialised Financial Functions Unit. (The majority of these cases, seven of which have been lodged in 2020, require previous NLC chief running officer Phillemon Letwaba, who resigned underneath a cloud in 2022, and Pretoria attorney Leslie Ramulifho.)

De Kock explained the NPA faced various “worries” in prosecuting conditions. These, he claimed, provided

the lapse of time concerning when the offences have been committed and the issuing on the Presidential Proclamation on one November 2020;
“unavailability of witnesses and/or documentary evidence” (Previously this year, the SIU advised the committee that key paperwork necessary in certain prosecutions had been deleted with the NLC Laptop method or had gone lacking from Metrofile, a warehouse exactly where copies of paperwork are archived and stored);
The reality that some implicated people today are still utilized by NLC; and
A problem to the legality in the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to making certain finalisation in these matters. To this end, a team of committed prosecutors continues to be allocated to supervise all NLC issues at this time beneath investigation,” de Kock stated. “Issues are dealt with as a precedence. After [the] investigations are accomplished, the NPA will make a call.”

What the businesses say (or don’t)
GroundUp was only in a position to get remark from among the list of five organizations accused by the SIU in Parliament of producing fraudulent yearly monetary statements,TTP Consulting.

Aubrey Moeng, considered one of TTP’s two administrators, explained within an electronic mail in response to thoughts: “On account of client confidentiality, we need to recommend that TTP Consulting is not really prepared to divulge customers’ financial private info with the public or media … with no consent of your shopper or a lawful explanation.”

The corporate is often a “lover” of various condition entities, which includes SARS and also the CIPC, Based on its website.

Neither of the two administrators of Dzata Accountants, who will be the two mentioned as inactive about the CIPC sign up of companies, responded to emailed questions. The company continues to be deregistered with the CIPC for failing to submit monetary statements because 2021.

The only director of Mageba Ntuli Trading and Consulting Service, Patrick Zulu, died a few decades back, Based on official documents. The corporate was deregistered from the CIPC for failing to submit monetary statements since 2021.

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

GroundUp was unable to uncover any listing for Tafta Consulting and Accounting Solutions with the CIPC. We were also unable to trace any of the company’s administrators to request remark.

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