The accountants who helped loot the Lottery

The accountants who helped loot the Lottery

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The Specific Investigating Unit has discovered five accounting firms that assisted loot Lottery money. Graphic: Lisa Nelson

The Special Investigating Unit has determined five accounting and auditing corporations that assisted non-gain businesses loot Lottery dollars supposed for “superior leads to”.
The accounting firms compiled fraudulent financial statements used by these businesses to submit an application for Lottery funding, the SIU informed Parliament.
Performing chief countrywide investigations officer Zodwa Xesibe mentioned the SIU would get motion to obtain these firms blacklisted.
A 4-calendar year probe because of the หวย Unique Investigating Device (SIU) has uncovered five accounting and auditing firms that assisted dodgy non-earnings corporations loot many many rands intended for “very good triggers” in the Lottery.

These corporations were being described by the SIU as “Experienced enablers,” who “compiled fraudulent fiscal statements” which were used by the companies to submit an application for Lottery funding.

The 5 organizations were being named in Parliament from the SIU’s acting Main countrywide investigations officer Zodwa Xesibe. They're TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Companies.

Fraudulent financials made by these 5 accounting companies aided just about forty organizations get their palms on lottery funding, based on the SIU presentation.

Dependant on a tool containing knowledge with all lottery grants since 2002, these firms bought around R314-million in funding.

“These NPCs were being funded with the Countrywide Lotteries Commission (NLC) though the money weren't used for their meant purpose,” Xesibe advised Parliament’s Trade, Field and Competitiveness Portfolio Committee very last 7 days.

The SIU, the Hawks and the National Prosecuting Authority (NPA) had been in Parliament to report to the committee on progress in bringing individuals and organisations associated with looting the lottery to e-book.

Xesibe advised GroundUp that the SIU intended to lodge problems versus the accounting companies concerned and was examining if these companies had been registered and, if so, with which professional bodies.

“We would like these businesses to be blacklisted,” she instructed GroundUp.

To qualify for Lottery funding, an organisation was required to make two many years of yearly financial statements, Xesibe spelled out in Parliament.

Nevertheless, as an ongoing six-12 months investigation into lottery corruption by GroundUp has revealed, hijacked non-earnings organisations (NPOs) or new shelf non-financial gain companies (NPCs) with no monetary monitor information had been used to apply for funding.

In certain scenarios, Pretty much equivalent fiscal statements have been made for unrelated organisations, frequently with just the names with the organisations transformed, GroundUp’s investigation discovered.

Files submitted by genuine NPCs for unsuccessful grant apps had been normally used by new or hijacked NPCs and NPOs to submit an application for funding. The details and documents with the unsuccessful applicants were provided by senior Lottery officers into the dodgy applicants.

With cursory or - frequently - no verification, these dodgy applicants have been awarded many rands in grants. Sometimes extra tranches of money had been paid out without having Considerably checking around the development of jobs.

The overwhelming majority of these grants were made by using proactive funding, which was at the center from the looting of your lottery. Proactive funding permitted the Minister of Trade, Business and Competition, or perhaps the NLC in conjunction with its board, to establish leads to to fund devoid of initial necessitating an software. This was stopped any time a new NLC board was appointed.

R2-billion in grants below investigation
SIU head Advocate Andy Mothibi explained the SIU was now investigating grants valued at over R2-billion, as well as the unit was nevertheless often obtaining suggestion-offs about a lot more corruption.

He informed MPs that the SIU’s investigation were broken into three phases: the first, that has been finalised, probed dodgy grants amounting to R280-million, and the next, also completed, associated R247-million. While in the third period, as a result of be finalised at the conclusion of the 12 months, the SIU is investigating grants valued at Nearly R906-million, involving forty NPOs and NPCs, Mothibi said.

He explained which the SIU would apply “shortly” for the Presidential Proclamation, originally granted in October 2020 to analyze corruption involving lottery grants, to be extended to include procurement with the NLC.

The SIU investigation had thus far triggered thirteen disciplinary referrals into the NLC, and administrative referrals to SARS and the businesses and Mental Attributes Fee to blacklist persons implicated during the looting. Problems involving two persons had been referred for the Legal Observe Council as well as SA Institute of Chartered Accountants.

The SIU had observed a number of traits beneath the past NLC board and govt - most of whom have been implicated in looting - Mothibi informed MPs.

This integrated a “development of collusion amongst NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “standard maladministration within the acceptance of grants,” he mentioned.

Gradual development through the NPA
The SIU has frozen residences, properties, cars as well as other belongings truly worth tens of tens of millions which were acquired with lottery funds, but MPs expressed problem at sluggish development in prosecuting These linked to the looting. (The SIU is mandated only to Get better belongings bought with stolen state funds and doesn't have prosecuting powers).

Whilst the SIU has referred 15 matters on the NPA, so far only two people have been introduced right before a court docket. Two Adult males appeared in court docket in Kimberley a short while ago in reference to misappropriated funds gathered for your task to beat gender-primarily based violence.

In August 2022 Christopher Tshivule was sentenced to 8 a long time in jail for his aspect in the R1.5-million lottery grant fraud. Expenses towards two individuals billed with him, who the SIU has called “kingpins” while in the corruption that overwhelmed the NLC, were dropped.

Important-Basic Mmeli Makinyane, the acting divisional commissioner for precedence offences, instructed MPs that the Hawks ended up at present investigating sixteen lottery corruption-linked conditions. Another a person - the Kimberley make any difference - is right before a courtroom and two are already sent into the NPA for a choice to prosecute. An extra five scenarios are being investigated because of the SAPS detective and forensic providers, he reported.

Describing The explanations with the hold off in prosecutions, NPA Deputy National Director Rodney de Kock explained A part of The key reason why was that the Hawks had to do more investigations every time they received dossiers in the SIU.

“In essence, the investigations undertaken from the SIU usually do not satisfy prison benchmarks for prosecutions.”

Hence, the NPA experienced to work with investigators during the DPCI (the Hawks) and SAPS to carry out criminal investigations and make sure that the proof meets felony prosecution specifications, he stated, introducing: “Having said that, the perform of the SIU is significant and contributes significantly to this process.”

De Kock explained which the SIU’s investigation “often results in several referrals. The referrals may possibly in the long run bring about a person docket and one court docket circumstance.”

He claimed that 12 matters, which can be “around 85% entire”, were being staying jointly investigated because of the Hawks and the SIU’s Specialised Financial Operations Unit. (Many of these conditions, seven of which ended up lodged in 2020, involve former NLC Main operating officer Phillemon Letwaba, who resigned underneath a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)

De Kock claimed the NPA faced quite a few “issues” in prosecuting cases. These, he explained, bundled

the lapse of time amongst when the offences ended up fully commited and the issuing from the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Before this 12 months, the SIU instructed the committee that important files needed in certain prosecutions were deleted with the NLC Laptop or computer system or experienced absent lacking from Metrofile, a warehouse where by copies of paperwork are archived and saved);
The point that some implicated persons are still utilized by NLC; and
A challenge on the legality from the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is committed to guaranteeing finalisation in these issues. To this conclude, a team of committed prosecutors has become allotted to supervise all NLC matters presently beneath investigation,” de Kock reported. “Issues are handled being a priority. The moment [the] investigations are concluded, the NPA is likely to make a choice.”

What the companies say (or don’t)
GroundUp was only in a position to get remark from one of the 5 providers accused because of the SIU in Parliament of producing fraudulent annual monetary statements,TTP Consulting.

Aubrey Moeng, amongst TTP’s two directors, stated within an email in response to thoughts: “On account of client confidentiality, we would like to recommend that TTP Consulting is not willing to divulge purchasers’ monetary confidential information and facts with the general public or media … with no consent of the client or possibly a authorized motive.”

The corporation is a “partner” of several point out entities, like SARS plus the CIPC, In keeping with its Web page.

Neither of the two administrators of Dzata Accountants, that are each listed as inactive over the CIPC sign-up of providers, responded to emailed issues. The organization continues to be deregistered because of the CIPC for failing to post financial statements considering that 2021.

The only director of Mageba Ntuli Investing and Consulting Company, Patrick Zulu, died a few many years in the past, In line with official records. The organization was deregistered from the CIPC for failing to submit monetary statements because 2021.

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

GroundUp was struggling to uncover any listing for Tafta Consulting and Accounting Expert services Along with the CIPC. We have been also struggling to trace any of the business’s administrators to ask for comment.