The accountants who helped loot the Lottery

The accountants who helped loot the Lottery

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

The Special Investigating Device has determined five accounting and auditing firms that helped non-financial gain businesses loot Lottery money intended for “great triggers”.
The accounting corporations compiled fraudulent monetary statements utilized by these organizations to make an application for Lottery funding, the SIU informed Parliament.
Performing Main countrywide investigations officer Zodwa Xesibe stated the SIU would acquire motion to have these firms blacklisted.
A 4-year probe with the หุ้น ชอง 9 Unique Investigating Unit (SIU) has exposed 5 accounting and auditing corporations that helped dodgy non-earnings businesses loot many numerous rands meant for “great triggers” from the Lottery.

These corporations have been described from the SIU as “Experienced enablers,” who “compiled fraudulent money statements” which were utilized by the businesses to submit an application for Lottery funding.

The five corporations were being named in Parliament through the SIU’s acting chief countrywide investigations officer Zodwa Xesibe. They are TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Products and services.

Fraudulent financials made by these five accounting firms assisted practically 40 businesses get their arms on lottery funding, in accordance with the SIU presentation.

Based on a tool containing data with all lottery grants considering the fact that 2002, these organizations received about R314-million in funding.

“These NPCs had been funded because of the National Lotteries Fee (NLC) nevertheless the cash weren't utilised for their meant objective,” Xesibe advised Parliament’s Trade, Business and Competitors Portfolio Committee previous 7 days.

The SIU, the Hawks plus the Countrywide Prosecuting Authority (NPA) were being in Parliament to report back to the committee on development in bringing men and women and organisations associated with looting the lottery to book.

Xesibe explained to GroundUp which the SIU intended to lodge problems against the accounting corporations involved and was examining if these corporations were being registered and, In that case, with which Experienced bodies.

“We want these providers for being blacklisted,” she told GroundUp.

To qualify for Lottery funding, an organisation was necessary to deliver two a long time of once-a-year fiscal statements, Xesibe discussed in Parliament.

Nevertheless, as an ongoing six-12 months investigation into lottery corruption by GroundUp has exposed, hijacked non-financial gain organisations (NPOs) or new shelf non-revenue firms (NPCs) without monetary observe documents had been accustomed to submit an application for funding.

In certain situations, Nearly equivalent financial statements were being produced for unrelated organisations, normally with just the names of your organisations changed, GroundUp’s investigation discovered.

Files submitted by authentic NPCs for unsuccessful grant applications were being typically used by new or hijacked NPCs and NPOs to submit an application for funding. The main points and paperwork on the unsuccessful applicants had been equipped by senior Lottery officials for the dodgy applicants.

With cursory or - typically - no verification, these dodgy applicants were being awarded millions of rands in grants. From time to time added tranches of cash ended up compensated out without having much checking about the development of initiatives.

The overwhelming majority of such grants were being produced through proactive funding, which was at the heart from the looting of the lottery. Proactive funding permitted the Minister of Trade, Sector and Level of competition, or perhaps the NLC along with its board, to recognize will cause to fund without the need of 1st necessitating an application. This was stopped when a new NLC board was appointed.

R2-billion in grants less than investigation
SIU head Advocate Andy Mothibi reported the SIU was currently investigating grants valued at in excess of R2-billion, and also the unit was continue to frequently acquiring idea-offs about a lot more corruption.

He informed MPs the SIU’s investigation were damaged into 3 phases: the first, that has been finalised, probed dodgy grants amounting to R280-million, and the 2nd, also done, included R247-million. From the 3rd period, resulting from be finalised at the end of the 12 months, the SIU is investigating grants valued at Virtually R906-million, involving forty NPOs and NPCs, Mothibi reported.

He explained which the SIU would utilize “quickly” with the Presidential Proclamation, initially granted in Oct 2020 to analyze corruption involving lottery grants, to get prolonged to incorporate procurement via the NLC.

The SIU investigation experienced so far resulted in 13 disciplinary referrals into the NLC, and administrative referrals to SARS and the Companies and Mental Properties Fee to blacklist people today implicated inside the looting. Grievances involving two people today were referred for the Authorized Follow Council as well as SA Institute of Chartered Accountants.

The SIU experienced noticed many trends underneath the earlier NLC board and govt - many of whom are actually implicated in looting - Mothibi instructed MPs.

This integrated a “craze of collusion concerning NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “standard maladministration during the acceptance of grants,” he said.

Gradual development via the NPA
The SIU has frozen houses, properties, cars along with other assets truly worth tens of tens of millions that were acquired with lottery funds, but MPs expressed issue at sluggish development in prosecuting All those involved with the looting. (The SIU is mandated only to Recuperate belongings bought with stolen point out money and does not have prosecuting powers).

While the SIU has referred 15 issues to your NPA, up to now only two folks have been introduced right before a court. Two Adult males appeared in court in Kimberley a short while ago in connection with misappropriated money gathered for any job to beat gender-based violence.

In August 2022 Christopher Tshivule was sentenced to eight a long time in prison for his aspect inside a R1.5-million lottery grant fraud. Prices towards two folks charged with him, who the SIU has described as “kingpins” during the corruption that confused the NLC, have been dropped.

Key-Basic Mmeli Makinyane, the acting divisional commissioner for precedence offences, advised MPs that the Hawks were being at this time investigating sixteen lottery corruption-relevant instances. A further a person - the Kimberley make any difference - is ahead of a court docket and two are actually sent to your NPA for a decision to prosecute. An additional 5 cases are increasingly being investigated by the SAPS detective and forensic expert services, he claimed.

Detailing the reasons to the delay in prosecutions, NPA Deputy National Director Rodney de Kock stated Component of The key reason why was that the Hawks needed to do further more investigations if they gained dossiers within the SIU.

“In essence, the investigations carried out through the SIU do not fulfill criminal benchmarks for prosecutions.”

As a result, the NPA experienced to work with investigators during the DPCI (the Hawks) and SAPS to carry out felony investigations and make certain that the proof satisfies prison prosecution specifications, he claimed, introducing: “That said, the perform with the SIU is essential and contributes drastically to this process.”

De Kock stated the SIU’s investigation “generally ends in a number of referrals. The referrals may well eventually result in one docket and a person courtroom case.”

He said that 12 issues, which can be “around eighty five% comprehensive”, had been remaining jointly investigated with the Hawks and the SIU’s Specialised Economic Operations Unit. (These types of conditions, 7 of which were lodged in 2020, entail former NLC chief operating officer Phillemon Letwaba, who resigned under a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)

De Kock stated the NPA faced many “troubles” in prosecuting conditions. These, he claimed, involved

the lapse of time in between in the event the offences ended up committed and the issuing of the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Previously this year, the SIU explained to the committee that essential documents wanted in some prosecutions were deleted through the NLC computer technique or had absent lacking from Metrofile, a warehouse where copies of documents are archived and saved);
The reality that some implicated people today remain utilized by NLC; and
A problem for the legality from the Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is dedicated to guaranteeing finalisation in these matters. To this stop, a group of dedicated prosecutors continues to be allotted to supervise all NLC matters at this time below investigation,” de Kock reported. “Issues are handled for a priority. After [the] investigations are completed, the NPA can make a call.”

What the businesses say (or don’t)
GroundUp was only capable of get remark from one of many five providers accused through the SIU in Parliament of producing fraudulent yearly economical statements,TTP Consulting.

Aubrey Moeng, certainly one of TTP’s two directors, explained in an email in reaction to thoughts: “Because of consumer confidentiality, we need to advise that TTP Consulting just isn't ready to disclose shoppers’ monetary private information with the public or media … with no consent of your customer or maybe a legal purpose.”

The organization is really a “companion” of a number of condition entities, like SARS along with the CIPC, In accordance with its Web-site.

Neither of the two directors of Dzata Accountants, who're both outlined as inactive to the CIPC sign up of businesses, responded to emailed inquiries. The company has become deregistered because of the CIPC for failing to post economical statements due to the fact 2021.

The only real director of Mageba Ntuli Investing and Consulting Company, Patrick Zulu, died 3 decades ago, In accordance with official data. The corporate was deregistered because of the CIPC for failing to post fiscal statements due to the fact 2021.

Matamela Magodi, the sole director of Magodi Consultants, didn't reply to inquiries emailed to him.

GroundUp was unable to uncover any listing for Tafta Consulting and Accounting Companies Using the CIPC. We ended up also unable to trace any of the business’s directors to ask for comment.

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