The accountants who served loot the Lottery

The accountants who served loot the Lottery

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The Specific Investigating Unit has recognized five accounting firms that served loot Lottery resources. Graphic: Lisa Nelson

The Exclusive Investigating Unit has identified 5 accounting and auditing firms that served non-gain corporations loot Lottery income intended for “fantastic brings about”.
The accounting corporations compiled fraudulent economic statements employed by these businesses to submit an application for Lottery funding, the SIU told Parliament.
Acting chief nationwide investigations officer Zodwa Xesibe claimed the SIU would consider action to obtain these companies blacklisted.
A 4-calendar year probe via the cat888 Particular Investigating Device (SIU) has uncovered 5 accounting and auditing firms that helped dodgy non-earnings firms loot many many rands intended for “very good causes” through the Lottery.

These companies were being explained from the SIU as “Specialist enablers,” who “compiled fraudulent economical statements” that were used by the businesses to apply for Lottery funding.

The 5 providers were named in Parliament through the SIU’s performing Main national investigations officer Zodwa Xesibe. They may be TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Services.

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

Determined by a Software that contains details with all lottery grants considering that 2002, these businesses obtained in excess of R314-million in funding.

“These NPCs ended up funded with the Nationwide Lotteries Fee (NLC) however the resources were not employed for his or her meant objective,” Xesibe told Parliament’s Trade, Field and Competitors Portfolio Committee very last 7 days.

The SIU, the Hawks plus the Countrywide Prosecuting Authority (NPA) had been in Parliament to report to the committee on progress in bringing people and organisations involved with looting the lottery to book.

Xesibe instructed GroundUp the SIU intended to lodge problems from the accounting companies involved and was examining if these companies have been registered and, If that's so, with which Specialist bodies.

“We would like these companies to generally be blacklisted,” she advised GroundUp.

To qualify for Lottery funding, an organisation was required to make two yrs of annual financial statements, Xesibe discussed in Parliament.

Even so, as an ongoing 6-year investigation into lottery corruption by GroundUp has discovered, hijacked non-gain organisations (NPOs) or new shelf non-financial gain businesses (NPCs) without fiscal track records were being used to submit an application for funding.

In a few scenarios, Just about similar monetary statements were generated for unrelated organisations, frequently with just the names from the organisations improved, GroundUp’s investigation discovered.

Paperwork submitted by authentic NPCs for unsuccessful grant apps were being normally employed by new or hijacked NPCs and NPOs to apply for funding. The main points and files with the unsuccessful applicants ended up provided by senior Lottery officials to the dodgy applicants.

With cursory or - normally - no verification, these dodgy applicants ended up awarded a lot of rands in grants. Often further tranches of resources have been compensated out with no Significantly examining around the development of projects.

The vast majority of such grants were manufactured by using proactive funding, which was at the heart in the looting of your lottery. Proactive funding authorized the Minister of Trade, Industry and Levels of competition, or maybe the NLC together with its board, to discover will cause to fund without the need of to start with demanding an application. This was stopped whenever a new NLC board was appointed.

R2-billion in grants below investigation
SIU head Advocate Andy Mothibi said the SIU was currently investigating grants valued at around R2-billion, plus the unit was however often receiving suggestion-offs about extra corruption.

He informed MPs which the SIU’s investigation had been broken into 3 phases: the very first, which has been finalised, probed dodgy grants amounting to R280-million, and the 2nd, also completed, involved R247-million. While in the 3rd period, because of be finalised at the end of the year, the SIU is investigating grants valued at Virtually R906-million, involving 40 NPOs and NPCs, Mothibi mentioned.

He explained the SIU would use “quickly” for the Presidential Proclamation, at first granted in Oct 2020 to research corruption involving lottery grants, to become prolonged to include procurement through the NLC.

The SIU investigation experienced thus far resulted in thirteen disciplinary referrals for the NLC, and administrative referrals to SARS and the businesses and Intellectual Attributes Commission to blacklist people implicated from the looting. Complaints involving two men and women were referred for the Authorized Observe Council and also the SA Institute of Chartered Accountants.

The SIU had observed various traits underneath the previous NLC board and executive - a lot of whom are already implicated in looting - Mothibi instructed MPs.

This bundled a “development of collusion concerning NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “normal maladministration from the approval of grants,” he stated.

Gradual development with the NPA
The SIU has frozen properties, properties, cars and trucks and various property worth tens of thousands and thousands which were bought with lottery cash, but MPs expressed concern at slow development in prosecuting those associated with the looting. (The SIU is mandated only to Get better assets bought with stolen condition cash and doesn't have prosecuting powers).

While the SIU has referred 15 matters for the NPA, to date only two folks have been introduced right before a court docket. Two Adult men appeared in court docket in Kimberley not long ago in connection with misappropriated cash gathered to get a task to beat gender-based mostly violence.

In August 2022 Christopher Tshivule was sentenced to eight yrs in jail for his component in the R1.5-million lottery grant fraud. Rates towards two people today billed with him, who the SIU has described as “kingpins” within the corruption that overwhelmed the NLC, were being dropped.

Big-Basic Mmeli Makinyane, the acting divisional commissioner for priority offences, informed MPs which the Hawks ended up presently investigating sixteen lottery corruption-associated scenarios. An additional a person - the Kimberley make a difference - is in advance of a court docket and two have already been sent for the NPA for a decision to prosecute. An extra 5 circumstances are being investigated from the SAPS detective and forensic solutions, he explained.

Conveying The explanations with the hold off in prosecutions, NPA Deputy Countrywide Director Rodney de Kock explained Section of The key reason why was the Hawks needed to do more investigations when they been given dossiers through the SIU.

“In essence, the investigations carried out via the SIU usually do not fulfill criminal expectations for prosecutions.”

Thus, the NPA experienced to operate with investigators during the DPCI (the Hawks) and SAPS to conduct criminal investigations and be certain that the evidence meets criminal prosecution requirements, he explained, including: “That said, the work of the SIU is very important and contributes tremendously to this method.”

De Kock explained that the SIU’s investigation “generally ends in several referrals. The referrals could eventually lead to one docket and just one court docket scenario.”

He mentioned that twelve issues, which happen to be “about 85% finish”, have been getting jointly investigated with the Hawks as well as the SIU’s Specialised Economic Functions Device. (Most of these situations, seven of which had been lodged in 2020, include former NLC Main running officer Phillemon Letwaba, who resigned less than a cloud in 2022, and Pretoria law firm Leslie Ramulifho.)

De Kock explained the NPA faced a number of “difficulties” in prosecuting cases. These, he reported, bundled

the lapse of your time in between in the event the offences have been committed along with the issuing of the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary proof” (Earlier this 12 months, the SIU advised the committee that important paperwork desired in some prosecutions had been deleted within the NLC Laptop system or had gone missing from Metrofile, a warehouse in which copies of paperwork are archived and saved);
the fact that some implicated folks remain used by NLC; and
A obstacle into the legality of the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to making certain finalisation in these issues. To this end, a group of focused prosecutors has been allocated to supervise all NLC matters at the moment below investigation,” de Kock said. “Matters are managed as a priority. After [the] investigations are completed, the NPA is likely to make a choice.”

What the businesses say (or don’t)
GroundUp was only capable of get remark from among the list of 5 businesses accused with the SIU in Parliament of manufacturing fraudulent yearly money statements,TTP Consulting.

Aubrey Moeng, certainly one of TTP’s two directors, stated within an electronic mail in reaction to inquiries: “On account of consumer confidentiality, we want to recommend that TTP Consulting will not be willing to disclose customers’ money confidential information and facts with the general public or media … with no consent from the customer or a authorized rationale.”

The business is often a “partner” of numerous condition entities, including SARS as well as the CIPC, As outlined by its Web-site.

Neither of The 2 directors of Dzata Accountants, who're the two outlined as inactive around the CIPC sign up of providers, responded to emailed thoughts. The corporation has actually been deregistered through the CIPC for failing to post fiscal statements because 2021.

The only real director of Mageba Ntuli Trading and Consulting Assistance, Patrick Zulu, died three years in the past, according to official data. The corporation was deregistered from the CIPC for failing to submit fiscal statements considering the fact that 2021.

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

GroundUp was struggling to come across any listing for Tafta Consulting and Accounting Products and services with the CIPC. We were also struggling to trace any of the corporate’s directors to request remark.

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