The accountants who aided loot the Lottery

The accountants who aided loot the Lottery

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The Unique Investigating Unit has discovered five accounting firms that aided loot Lottery funds. Graphic: Lisa Nelson

The Particular Investigating Device has identified five accounting and auditing corporations that aided non-income corporations loot Lottery cash supposed for “good will cause”.
The accounting companies compiled fraudulent financial statements utilized by these businesses to submit an application for Lottery funding, the SIU told Parliament.
Acting chief countrywide investigations officer Zodwa Xesibe reported the SIU would choose action to obtain these companies blacklisted.
A four-calendar year probe via the หวย Specific Investigating Device (SIU) has uncovered 5 accounting and auditing companies that assisted dodgy non-income providers loot many hundreds of many rands intended for “fantastic will cause” through the Lottery.

These companies have been explained by the SIU as “Specialist enablers,” who “compiled fraudulent financial statements” that were used by the companies to apply for Lottery funding.

The 5 businesses had been named in Parliament from the SIU’s acting Main national investigations officer Zodwa Xesibe. They're TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Expert services.

Fraudulent financials made by these five accounting corporations assisted nearly forty corporations get their fingers on lottery funding, in accordance with the SIU presentation.

Depending on a Resource made up of information with all lottery grants due to the fact 2002, these companies got in excess of R314-million in funding.

“These NPCs were funded through the National Lotteries Commission (NLC) but the resources weren't utilised for their supposed reason,” Xesibe instructed Parliament’s Trade, Market and Competitiveness Portfolio Committee final 7 days.

The SIU, the Hawks along with the National Prosecuting Authority (NPA) ended up in Parliament to report to the committee on progress in bringing people today and organisations involved with looting the lottery to reserve.

Xesibe advised GroundUp which the SIU meant to lodge complaints in opposition to the accounting corporations associated and was examining if these firms had been registered and, If that is so, with which Experienced bodies.

“We wish these companies to become blacklisted,” she informed GroundUp.

To qualify for Lottery funding, an organisation was required to create two many years of annual economical statements, Xesibe stated in Parliament.

However, being an ongoing six-calendar year investigation into lottery corruption by GroundUp has discovered, hijacked non-earnings organisations (NPOs) or new shelf non-revenue providers (NPCs) without any financial monitor documents had been utilized to apply for funding.

In a few scenarios, Nearly similar money statements were made for unrelated organisations, generally with just the names of your organisations changed, GroundUp’s investigation discovered.

Documents submitted by genuine NPCs for unsuccessful grant applications were often used by new or hijacked NPCs and NPOs to submit an application for funding. The small print and documents from the unsuccessful applicants were being provided by senior Lottery officials to the dodgy applicants.

With cursory or - generally - no verification, these dodgy applicants have been awarded countless rands in grants. Sometimes more tranches of funds ended up paid out with no A lot checking over the development of tasks.

The vast majority of those grants were being made by way of proactive funding, which was at the center on the looting with the lottery. Proactive funding permitted the Minister of Trade, Marketplace and Competition, or maybe the NLC in conjunction with its board, to detect results in to fund without the need of to start with necessitating an application. This was stopped any time 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 about R2-billion, along with the device was even now regularly getting suggestion-offs about more corruption.

He advised MPs which the SIU’s investigation were damaged into a few phases: the initial, which has been finalised, probed dodgy grants amounting to R280-million, and the next, also concluded, associated R247-million. In the third phase, because of be finalised at the end of the year, the SIU is investigating grants valued at Nearly R906-million, involving 40 NPOs and NPCs, Mothibi said.

He said which the SIU would implement “quickly” for the Presidential Proclamation, at first granted in October 2020 to investigate corruption involving lottery grants, to generally be extended to incorporate procurement because of the NLC.

The SIU investigation had to this point resulted in thirteen disciplinary referrals for the NLC, and administrative referrals to SARS and the businesses and Intellectual Houses Fee to blacklist individuals implicated from the looting. Complaints involving two men and women were referred to the Legal Apply Council plus the SA Institute of Chartered Accountants.

The SIU experienced noticed quite a few traits underneath the previous NLC board and executive - many of whom happen to be implicated in looting - Mothibi informed MPs.

This integrated a “trend of collusion between NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “normal maladministration from the approval of grants,” he mentioned.

Sluggish progress by the NPA
The SIU has frozen residences, Attributes, vehicles and various belongings really worth tens of thousands and thousands which were bought with lottery money, but MPs expressed issue at sluggish development in prosecuting Those people involved with the looting. (The SIU is mandated only to Get well assets purchased with stolen point out funds and does not have prosecuting powers).

Whilst the SIU has referred 15 issues into the NPA, to date only two individuals have been brought before a court. Two men appeared in court in Kimberley a short while ago in connection with misappropriated money gathered to get a task to beat gender-based violence.

In August 2022 Christopher Tshivule was sentenced to eight a long time in prison for his section within a R1.5-million lottery grant fraud. Costs from two persons charged with him, who the SIU has described as “kingpins” inside the corruption that confused the NLC, ended up dropped.

Key-Basic Mmeli Makinyane, the performing divisional commissioner for priority offences, explained to MPs the Hawks ended up at present investigating sixteen lottery corruption-similar circumstances. Another a person - the Kimberley make a difference - is before a court and two happen to be sent on the NPA for a call to prosecute. An extra 5 instances are now being investigated because of the SAPS detective and forensic products and services, he said.

Explaining the reasons for your hold off in prosecutions, NPA Deputy Countrywide Director Rodney de Kock reported Component of the reason was that the Hawks needed to do even further investigations when they been given dossiers with the SIU.

“In essence, the investigations undertaken from the SIU do not fulfill criminal criteria for prosecutions.”

As a result, the NPA experienced to operate with investigators in the DPCI (the Hawks) and SAPS to conduct criminal investigations and make certain that the evidence meets legal prosecution criteria, he claimed, incorporating: “That said, the function of the SIU is important and contributes enormously to this process.”

De Kock stated which the SIU’s investigation “typically ends in several referrals. The referrals might in the long run bring about one particular docket and one court scenario.”

He claimed that twelve issues, which can be “about eighty five% finish”, were being being jointly investigated by the Hawks and also the SIU’s Specialised Economic Functions Device. (These types of situations, seven of which were being lodged in 2020, contain former NLC Main running officer Phillemon Letwaba, who resigned beneath a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)

De Kock reported the NPA faced several “troubles” in prosecuting circumstances. These, he reported, provided

the lapse of your time in between if the offences were being committed plus the issuing of the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Earlier this yr, the SIU instructed the committee that critical files needed in some prosecutions were deleted within the NLC computer method or experienced long gone missing from Metrofile, a warehouse in which copies of documents are archived and saved);
The reality that some implicated men and women are still used by NLC; and
A challenge to the legality of your Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is dedicated to making certain finalisation in these issues. To this stop, a workforce of devoted prosecutors has been allocated to supervise all NLC issues at the moment less than investigation,” de Kock mentioned. “Matters are managed as a priority. After [the] investigations are done, the NPA will make a decision.”

What the companies say (or don’t)
GroundUp was only capable of get comment from among the list of 5 companies accused through the SIU in Parliament of producing fraudulent annual monetary statements,TTP Consulting.

Aubrey Moeng, certainly one of TTP’s two administrators, claimed in an email in reaction to queries: “As a result of client confidentiality, we prefer to advise that TTP Consulting is not really ready to disclose clientele’ economical confidential facts with the public or media … without the consent with the client or possibly a lawful reason.”

The business is usually a “companion” of numerous condition entities, which include SARS as well as CIPC, according to its Web site.

Neither of the two administrators of Dzata Accountants, that are equally shown as inactive within the CIPC register of providers, responded to emailed thoughts. The corporate has become deregistered from the CIPC for failing to post monetary statements since 2021.

The only director of Mageba Ntuli Investing and Consulting Services, Patrick Zulu, died 3 years ago, In keeping with Formal records. The business was deregistered via the CIPC for failing to post financial statements considering that 2021.

Matamela Magodi, the only director of Magodi Consultants, did not respond to queries emailed to him.

GroundUp was unable to locate any listing for Tafta Consulting and Accounting Companies Together with the CIPC. We have been also unable to trace any of the company’s administrators to ask for remark.

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