The accountants who aided loot the Lottery
The accountants who aided loot the Lottery
Blog Article
The Specific Investigating Unit has discovered 5 accounting companies that assisted loot Lottery funds. Graphic: Lisa Nelson
The Unique Investigating Device has identified 5 accounting and auditing companies that aided non-earnings businesses loot Lottery money meant for “excellent causes”.
The accounting corporations compiled fraudulent fiscal statements employed by these providers to make an application for Lottery funding, the SIU told Parliament.
Acting chief national investigations officer Zodwa Xesibe said the SIU would get action to own these corporations blacklisted.
A 4-12 months probe by the lottovip Unique Investigating Unit (SIU) has exposed five accounting and auditing corporations that helped dodgy non-financial gain businesses loot many numerous rands intended for “good causes” from the Lottery.
These corporations were being explained because of the SIU as “Qualified enablers,” who “compiled fraudulent economical statements” which were utilized by the companies to apply for Lottery funding.
The 5 firms had been named in Parliament because of the SIU’s performing chief countrywide investigations officer Zodwa Xesibe. They may be 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 nearly forty corporations get their fingers on lottery funding, in accordance with the SIU presentation.
Determined by a Device containing info with all lottery grants considering the fact that 2002, these providers acquired more than R314-million in funding.
“These NPCs were funded via the National Lotteries Fee (NLC) however the cash were not employed for their meant function,” Xesibe instructed Parliament’s Trade, Marketplace and Competition Portfolio Committee final week.
The SIU, the Hawks along with the Nationwide Prosecuting Authority (NPA) had been in Parliament to report to the committee on progress in bringing folks and organisations involved with looting the lottery to reserve.
Xesibe told GroundUp that the SIU meant to lodge issues in opposition to the accounting companies concerned and was checking if these corporations were being registered and, if so, with which Expert bodies.
“We want these corporations for being blacklisted,” she informed GroundUp.
To qualify for Lottery funding, an organisation was necessary to develop two yrs of yearly economical statements, Xesibe explained in Parliament.
Having said that, being an ongoing six-year investigation into lottery corruption by GroundUp has disclosed, hijacked non-financial gain organisations (NPOs) or new shelf non-revenue providers (NPCs) without any economical monitor records have been utilized to apply for funding.
In a few occasions, almost similar fiscal statements ended up created for unrelated organisations, normally with only the names in the organisations transformed, GroundUp’s investigation observed.
Documents submitted by genuine NPCs for unsuccessful grant apps ended up often used by new or hijacked NPCs and NPOs to submit an application for funding. The details and files on the unsuccessful applicants were provided by senior Lottery officers on the dodgy applicants.
With cursory or - often - no verification, these dodgy applicants ended up awarded an incredible number of rands in grants. Sometimes supplemental tranches of money were paid out devoid of Considerably examining over the development of projects.
The vast majority of these grants have been designed via proactive funding, which was at the heart in the looting on the lottery. Proactive funding permitted the Minister of Trade, Market and Level of competition, or maybe the NLC at the side of its board, to establish results in to fund devoid of 1st requiring an software. This was stopped when a new NLC board was appointed.
R2-billion in grants underneath investigation
SIU head Advocate Andy Mothibi mentioned the SIU was currently investigating grants valued at above R2-billion, and the unit was still often receiving idea-offs about more corruption.
He advised MPs the SIU’s investigation had been broken into three phases: the first, which has been finalised, probed dodgy grants amounting to R280-million, and the second, also finished, involved R247-million. While in the third section, as a consequence of be finalised at the conclusion of the 12 months, the SIU is investigating grants valued at Practically R906-million, involving forty NPOs and NPCs, Mothibi claimed.
He explained which the SIU would use “soon” with the Presidential Proclamation, at first granted in October 2020 to research corruption involving lottery grants, for being prolonged to incorporate procurement from the NLC.
The SIU investigation experienced up to now triggered 13 disciplinary referrals to the NLC, and administrative referrals to SARS and the Companies and Intellectual Houses Fee to blacklist folks implicated within the looting. Issues involving two people today were referred into the Lawful Practice Council plus the SA Institute of Chartered Accountants.
The SIU experienced observed several trends underneath the previous NLC board and executive - most of whom happen to be implicated in looting - Mothibi informed MPs.
This incorporated a “pattern of collusion in between NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “normal maladministration while in the approval of grants,” he said.
Gradual progress via the NPA
The SIU has frozen residences, Qualities, autos together with other assets worth tens of tens of millions that were bought with lottery cash, but MPs expressed issue at gradual progress in prosecuting People involved in the looting. (The SIU is mandated only to Recuperate belongings acquired with stolen point out resources and does not have prosecuting powers).
Even though the SIU has referred fifteen issues to the NPA, to this point only two folks have been brought ahead of a court. Two men appeared in court docket in Kimberley recently in reference to misappropriated cash collected for a project to battle gender-based mostly violence.
In August 2022 Christopher Tshivule was sentenced to eight years in jail for his element inside a R1.five-million lottery grant fraud. Rates in opposition to two people billed with him, who the SIU has described as “kingpins” in the corruption that overcome the NLC, were being dropped.
Key-General Mmeli Makinyane, the acting divisional commissioner for precedence offences, told MPs the Hawks were being at the moment investigating sixteen lottery corruption-relevant instances. One more 1 - the Kimberley issue - is in advance of a courtroom and two have already been sent into the NPA for a call to prosecute. An additional five instances are increasingly being investigated with the SAPS detective and forensic products and services, he claimed.
Describing The explanations for your delay in prosecutions, NPA Deputy Nationwide Director Rodney de Kock explained Element of The main reason was that the Hawks had to do more investigations if they been given dossiers within the SIU.
“In essence, the investigations carried out because of the SIU do not fulfill felony criteria for prosecutions.”
Thus, the NPA had to operate with investigators during the DPCI (the Hawks) and SAPS to carry out legal investigations and be certain that the evidence meets prison prosecution standards, he said, introducing: “That said, the work with the SIU is vital and contributes drastically to this method.”
De Kock mentioned which the SIU’s investigation “generally leads to various referrals. The referrals could finally result in just one docket and a person court case.”
He stated that 12 issues, which might be “roughly 85% total”, had been currently being jointly investigated by the Hawks and also the SIU’s Specialised Financial Operations Unit. (The majority of these scenarios, seven of which had been lodged in 2020, involve previous NLC chief operating officer Phillemon Letwaba, who resigned underneath a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)
De Kock reported the NPA faced quite a few “worries” in prosecuting situations. These, he said, provided
the lapse of time among in the event the offences were being committed plus the issuing of your Presidential Proclamation on one November 2020;
“unavailability of witnesses and/or documentary evidence” (Earlier this yr, the SIU advised the committee that critical paperwork desired in certain prosecutions were deleted with the NLC Computer system process or had absent lacking from Metrofile, a warehouse wherever copies of documents are archived and saved);
The reality that some implicated folks are still utilized by NLC; and
A obstacle towards the legality of your Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to making sure finalisation in these issues. To this stop, a staff of dedicated prosecutors has become allotted to supervise all NLC issues currently beneath investigation,” de Kock reported. “Issues are taken care of as a priority. When [the] investigations are concluded, the NPA is likely to make a choice.”
What the businesses say (or don’t)
GroundUp was only able to get comment from one of many five businesses accused through the SIU in Parliament of producing fraudulent once-a-year economic statements,TTP Consulting.
Aubrey Moeng, among TTP’s two directors, claimed in an email in reaction to issues: “Due to shopper confidentiality, we prefer to advise that TTP Consulting isn't ready to disclose clientele’ fiscal confidential info with the public or media … with no consent in the customer or simply a lawful cause.”
The business is usually a “partner” of a number of state entities, including SARS and also the CIPC, In accordance with its Internet site.
Neither of the two directors of Dzata Accountants, who will be both detailed as inactive around the CIPC sign up of corporations, responded to emailed inquiries. The corporate is deregistered from the CIPC for failing to post monetary statements due to the fact 2021.
The only director of Mageba Ntuli Buying and selling and Consulting Company, Patrick Zulu, died 3 years in the past, according to official data. The company was deregistered from the CIPC for failing to submit money statements since 2021.
Matamela Magodi, the sole director of Magodi Consultants, did not reply to questions emailed to him.
GroundUp was struggling to find any listing for Tafta Consulting and Accounting Providers Along with the CIPC. We ended up also not able to trace any of the company’s administrators to ask for remark.