The accountants who aided loot the Lottery

The accountants who aided loot the Lottery

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The Specific Investigating Device has discovered five accounting companies that served loot Lottery cash. Graphic: Lisa Nelson

The Distinctive Investigating Device has discovered 5 accounting and auditing companies that assisted non-financial gain providers loot Lottery dollars supposed for “good will cause”.
The accounting corporations compiled fraudulent monetary statements utilized by these firms to submit an application for Lottery funding, the SIU instructed Parliament.
Acting chief nationwide investigations officer Zodwa Xesibe said the SIU would just take action to obtain these firms blacklisted.
A 4-year probe with the ruay Particular Investigating Device (SIU) has exposed 5 accounting and auditing companies that helped dodgy non-revenue businesses loot hundreds of an incredible number of rands designed for “superior leads to” within the Lottery.

These firms had been described with the SIU as “Specialist enablers,” who “compiled fraudulent fiscal statements” that were employed by the businesses to make an application for Lottery funding.

The five corporations were being named in Parliament because of the SIU’s acting Main nationwide investigations officer Zodwa Xesibe. They're TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Products and services.

Fraudulent financials made by these 5 accounting firms served approximately 40 providers get their hands on lottery funding, in accordance with the SIU presentation.

Based upon a tool containing knowledge with all lottery grants given that 2002, these corporations bought more than R314-million in funding.

“These NPCs ended up funded via the Countrywide Lotteries Fee (NLC) although the cash weren't used for his or her meant goal,” Xesibe informed Parliament’s Trade, Field and Opposition Portfolio Committee last 7 days.

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

Xesibe told GroundUp the SIU meant to lodge complaints versus the accounting firms involved and was examining if these corporations have been registered and, if so, with which Experienced bodies.

“We want these firms to become blacklisted,” she told GroundUp.

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

Having said that, as an ongoing six-year investigation into lottery corruption by GroundUp has discovered, hijacked non-gain organisations (NPOs) or new shelf non-gain firms (NPCs) with no money monitor information had been utilized to make an application for funding.

In some occasions, Just about identical money statements were generated for unrelated organisations, usually with just the names from the organisations changed, GroundUp’s investigation uncovered.

Paperwork submitted by real NPCs for unsuccessful grant purposes ended up normally used by new or hijacked NPCs and NPOs to make an application for funding. The small print and paperwork of your unsuccessful applicants were being provided by senior Lottery officials on the dodgy applicants.

With cursory or - generally - no verification, these dodgy applicants ended up awarded an incredible number of rands in grants. In some cases additional tranches of funds ended up compensated out without the need of much examining about the progress of jobs.

The vast majority of such grants ended up produced by means of proactive funding, which was at the guts of the looting from the lottery. Proactive funding allowed the Minister of Trade, Field and Level of competition, or the NLC along with its board, to establish will cause to fund without first requiring an software. This was stopped every time a new NLC board was appointed.

R2-billion in grants beneath investigation
SIU head Advocate Andy Mothibi claimed the SIU was at the moment investigating grants valued at more than R2-billion, as well as the device was nevertheless frequently obtaining tip-offs about extra corruption.

He informed MPs which the SIU’s investigation were broken into three phases: the very first, that has been finalised, probed dodgy grants amounting to R280-million, and the 2nd, also concluded, involved R247-million. During the third stage, due to be finalised at the end of the yr, the SIU is investigating grants valued at Just about R906-million, involving forty NPOs and NPCs, Mothibi explained.

He mentioned that the SIU would apply “before long” to the Presidential Proclamation, at first granted in October 2020 to analyze corruption involving lottery grants, to be prolonged to include procurement via the NLC.

The SIU investigation had so far triggered thirteen disciplinary referrals on the NLC, and administrative referrals to SARS and the businesses and Intellectual Attributes Commission to blacklist individuals implicated within the looting. Issues involving two individuals were referred towards the Authorized Exercise Council and also the SA Institute of Chartered Accountants.

The SIU had observed a number of tendencies beneath the preceding NLC board and govt - lots of whom happen to be implicated in looting - Mothibi informed MPs.

This provided a “trend of collusion in between NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “general maladministration inside the approval of grants,” he stated.

Gradual progress from the NPA
The SIU has frozen properties, Qualities, automobiles along with other belongings really worth tens of tens of millions that were acquired with lottery resources, but MPs expressed concern at sluggish development in prosecuting Those people involved in the looting. (The SIU is mandated only to Recuperate assets bought with stolen point out cash and doesn't have prosecuting powers).

When the SIU has referred fifteen matters for the NPA, to date only two individuals have been brought just before a court. Two Guys appeared in court in Kimberley lately in reference to misappropriated resources gathered for the undertaking to fight gender-based violence.

In August 2022 Christopher Tshivule was sentenced to 8 many years in jail for his component in a R1.5-million lottery grant fraud. Rates in opposition to two people charged with him, who the SIU has referred to as “kingpins” in the corruption that overwhelmed the NLC, have been dropped.

Big-Common Mmeli Makinyane, the acting divisional commissioner for priority offences, instructed MPs which the Hawks were at the moment investigating 16 lottery corruption-connected situations. One more just one - the Kimberley subject - is right before a court docket and two are actually sent for the NPA for a decision to prosecute. An additional five cases are now being investigated through the SAPS detective and forensic providers, he stated.

Explaining the reasons for the hold off in prosecutions, NPA Deputy Countrywide Director Rodney de Kock stated Component of The explanation was which the Hawks needed to do even more investigations once they gained dossiers in the SIU.

“In essence, the investigations undertaken with the SIU never fulfill criminal specifications for prosecutions.”

Hence, the NPA experienced to operate with investigators in the DPCI (the Hawks) and SAPS to conduct prison investigations and make sure that the proof fulfills criminal prosecution requirements, he mentioned, adding: “Having said that, the operate in the SIU is essential and contributes enormously to this process.”

De Kock claimed which the SIU’s investigation “generally brings about several referrals. The referrals may well ultimately lead to one particular docket and just one courtroom situation.”

He stated that 12 issues, that are “around 85% full”, had been becoming jointly investigated via the Hawks and the SIU’s Specialised Economic Functions Unit. (Most of these situations, 7 of which have been lodged in 2020, require previous NLC chief running officer Phillemon Letwaba, who resigned beneath a cloud in 2022, and Pretoria law firm Leslie Ramulifho.)

De Kock explained the NPA confronted a number of “troubles” in prosecuting instances. These, he explained, bundled

the lapse of your time among if the offences were being fully commited and the issuing from the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary proof” (Previously this 12 months, the SIU told the committee that important documents required in some prosecutions had been deleted in the NLC Personal computer technique or had gone lacking from Metrofile, a warehouse the place copies of documents are archived and saved);
The reality that some implicated folks remain utilized by NLC; and
A obstacle to your 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 workforce of devoted prosecutors has long been allotted to supervise all NLC issues presently beneath investigation,” de Kock reported. “Matters are handled as being a priority. As soon as [the] investigations are finished, the NPA will make a call.”

What the companies say (or don’t)
GroundUp was only capable to get comment from one of many 5 firms accused with the SIU in Parliament of producing fraudulent yearly monetary statements,TTP Consulting.

Aubrey Moeng, amongst TTP’s two administrators, said in an email in response to concerns: “Due to customer confidentiality, we want to suggest that TTP Consulting is not really willing to divulge consumers’ financial private data with the general public or media … without the consent from the customer or maybe a authorized motive.”

The corporation is a “partner” of quite a few point out entities, which include SARS as well as CIPC, In keeping with its Web-site.

Neither of the two administrators of Dzata Accountants, who're both of those stated as inactive within the CIPC sign up of organizations, responded to emailed queries. The company has actually been deregistered from the CIPC for failing to submit monetary statements due to the fact 2021.

The only real director of Mageba Ntuli Trading and Consulting Services, Patrick Zulu, died three a long time in the past, In keeping with Formal data. The business was deregistered with the CIPC for failing to submit fiscal statements considering that 2021.

Matamela Magodi, the only director of Magodi Consultants, did not reply to inquiries emailed to him.

GroundUp was unable to find any listing for Tafta Consulting and Accounting Services with the CIPC. We were being also struggling to trace any of the corporate’s administrators to ask for remark.