The accountants who helped loot the Lottery

The accountants who helped loot the Lottery

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

The Particular Investigating Unit has recognized 5 accounting and auditing companies that served non-financial gain organizations loot Lottery money intended for “fantastic results in”.
The accounting corporations compiled fraudulent financial statements used by these firms to make an application for Lottery funding, the SIU told Parliament.
Acting chief national investigations officer Zodwa Xesibe claimed the SIU would consider motion to possess these firms blacklisted.
A 4-year probe because of the หุ้น ชอง 9 Unique Investigating Unit (SIU) has exposed five accounting and auditing companies that aided dodgy non-revenue providers loot numerous a lot of rands intended for “great results in” through the Lottery.

These firms ended up described by the SIU as “Experienced enablers,” who “compiled fraudulent financial statements” that were used by the companies to make an application for Lottery funding.

The 5 corporations were named in Parliament with the SIU’s performing chief national investigations officer Zodwa Xesibe. They are really TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Providers.

Fraudulent financials produced by these five accounting corporations helped practically 40 organizations get their hands on lottery funding, in accordance with the SIU presentation.

Dependant on a Software that contains info with all lottery grants given that 2002, these businesses bought above R314-million in funding.

“These NPCs were being funded with the Countrywide Lotteries Commission (NLC) though the cash were not used for their meant purpose,” Xesibe informed Parliament’s Trade, Industry and Level of competition Portfolio Committee last 7 days.

The SIU, the Hawks as well as the Countrywide Prosecuting Authority (NPA) had been in Parliament to report back to the committee on development in bringing men and women and organisations linked to looting the lottery to e-book.

Xesibe explained to GroundUp that the SIU intended to lodge grievances from the accounting companies involved and was examining if these companies had been registered and, In that case, with which Experienced bodies.

“We wish these providers to be blacklisted,” she instructed GroundUp.

To qualify for Lottery funding, an organisation was necessary to develop two decades of once-a-year economic statements, Xesibe discussed in Parliament.

However, being an ongoing six-yr investigation into lottery corruption by GroundUp has uncovered, hijacked non-income organisations (NPOs) or new shelf non-financial gain providers (NPCs) with no economic observe records have been utilized to submit an application for funding.

In a few occasions, Practically equivalent economical statements ended up made for unrelated organisations, frequently with only the names in the organisations modified, GroundUp’s investigation uncovered.

Files submitted by real NPCs for unsuccessful grant applications were frequently utilized by new or hijacked NPCs and NPOs to make an application for funding. The details and documents with the unsuccessful applicants ended up equipped by senior Lottery officials to your dodgy applicants.

With cursory or - generally - no verification, these dodgy applicants ended up awarded millions of rands in grants. Occasionally added tranches of cash ended up compensated out without Significantly examining over the progress of initiatives.

The overwhelming majority of such grants were being built by means of proactive funding, which was at the center in the looting from the lottery. Proactive funding authorized the Minister of Trade, Industry and Competitiveness, or even the NLC along with its board, to discover leads to to fund without 1st demanding an software. This was stopped whenever a new NLC board was appointed.

R2-billion in grants underneath investigation
SIU head Advocate Andy Mothibi said the SIU was at present investigating grants valued at around R2-billion, and the device was nonetheless consistently acquiring tip-offs about much more corruption.

He told MPs which the SIU’s investigation had been damaged into 3 phases: the main, that has been finalised, probed dodgy grants amounting to R280-million, and the next, also accomplished, involved R247-million. In the third phase, as a consequence of be finalised at the conclusion of the year, the SIU is investigating grants valued at Just about R906-million, involving forty NPOs and NPCs, Mothibi stated.

He explained which the SIU would use “before long” to the Presidential Proclamation, initially granted in October 2020 to analyze corruption involving lottery grants, to be prolonged to incorporate procurement because of the NLC.

The SIU investigation experienced up to now triggered 13 disciplinary referrals to your NLC, and administrative referrals to SARS and the businesses and Intellectual Houses Commission to blacklist folks implicated from the looting. Issues involving two individuals were referred on the Legal Apply Council and also the SA Institute of Chartered Accountants.

The SIU experienced observed quite a few tendencies under the former NLC board and government - many of whom have already been implicated in looting - Mothibi advised MPs.

This integrated a “craze of collusion involving NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “normal maladministration in the approval of grants,” he explained.

Sluggish development via the NPA
The SIU has frozen households, Qualities, automobiles as well as other property value tens of millions which were acquired with lottery money, but MPs expressed concern at gradual progress in prosecuting those involved in the looting. (The SIU is mandated only to recover belongings bought with stolen condition funds and doesn't have prosecuting powers).

Even though the SIU has referred 15 issues on the NPA, up to now only two folks have been brought right before a court. Two Adult males appeared in court in Kimberley not too long ago in reference to misappropriated cash gathered for any challenge to combat gender-based mostly violence.

In August 2022 Christopher Tshivule was sentenced to 8 yrs in jail for his section inside a R1.5-million lottery grant fraud. Expenses in opposition to two folks billed with him, who the SIU has called “kingpins” from the corruption that overcome the NLC, were dropped.

Significant-Typical Mmeli Makinyane, the acting divisional commissioner for precedence offences, instructed MPs the Hawks were being presently investigating sixteen lottery corruption-relevant cases. A further a single - the Kimberley make any difference - is prior to a courtroom and two are actually sent towards the NPA for a decision to prosecute. A further five conditions are being investigated through the SAPS detective and forensic products and services, he said.

Describing the reasons to the delay in prosecutions, NPA Deputy National Director Rodney de Kock said part of the reason was which the Hawks had to do further investigations when they been given dossiers with the SIU.

“In essence, the investigations undertaken via the SIU never satisfy criminal benchmarks for prosecutions.”

Thus, the NPA had to work with investigators during the DPCI (the Hawks) and SAPS to carry out legal investigations and ensure that the evidence meets legal prosecution expectations, he reported, adding: “That said, the function from the SIU is very important and contributes drastically to this process.”

De Kock explained that the SIU’s investigation “usually leads to multiple referrals. The referrals might ultimately end in a single docket and a person courtroom case.”

He reported that 12 issues, which might be “somewhere around 85% finish”, have been getting jointly investigated by the Hawks as well as SIU’s Specialised Economic Operations Device. (A large number of situations, 7 of which were being lodged in 2020, involve previous NLC Main operating officer Phillemon Letwaba, who resigned underneath a cloud in 2022, and Pretoria law firm Leslie Ramulifho.)

De Kock reported the NPA confronted many “problems” in prosecuting circumstances. These, he stated, integrated

the lapse of time in between when the offences were being dedicated along with the issuing in the Presidential Proclamation on one November 2020;
“unavailability of witnesses and/or documentary evidence” (Earlier this year, the SIU advised the committee that key documents needed in certain prosecutions had been deleted with the NLC Computer system process or had absent lacking from Metrofile, a warehouse the place copies of files are archived and stored);
The truth that some implicated people today are still used by NLC; and
A challenge to your legality on the Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to guaranteeing finalisation in these issues. To this close, a group of devoted prosecutors has been allocated to supervise all NLC issues now less than investigation,” de Kock said. “Issues are managed to be a precedence. The moment [the] investigations are concluded, the NPA could make a decision.”

What the businesses say (or don’t)
GroundUp was only in the position to get remark from among the list of 5 organizations accused by the SIU in Parliament of manufacturing fraudulent annual economical statements,TTP Consulting.

Aubrey Moeng, one among TTP’s two administrators, mentioned within an electronic mail in reaction to concerns: “As a consequence of client confidentiality, we desire to advise that TTP Consulting is not prepared to disclose shoppers’ economical confidential details with the public or media … with no consent from the shopper or simply a legal rationale.”

The corporate is really a “partner” of various state entities, together with SARS as well as the CIPC, In accordance with its Web site.

Neither of the two directors of Dzata Accountants, that are both shown as inactive around the CIPC sign-up of providers, responded to emailed issues. The corporate has been deregistered via the CIPC for failing to post money statements given that 2021.

The only real director of Mageba Ntuli Buying and selling and Consulting Support, Patrick Zulu, died a few years in the past, In accordance with Formal records. The company was deregistered because of the CIPC for failing to submit money statements because 2021.

Matamela Magodi, the only real director of Magodi Consultants, didn't respond to queries emailed to him.

GroundUp was not able to obtain any listing for Tafta Consulting and Accounting Solutions While using the CIPC. We were also not able to trace any of the business’s directors to ask for comment.

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