The accountants who helped loot the Lottery

The accountants who helped loot the Lottery

Blog Article

The Particular Investigating Device has identified 5 accounting firms that helped loot Lottery money. Graphic: Lisa Nelson

The Specific Investigating Unit has recognized 5 accounting and auditing firms that helped non-financial gain providers loot Lottery dollars intended for “superior brings about”.
The accounting corporations compiled fraudulent financial statements used by these firms to submit an application for Lottery funding, the SIU informed Parliament.
Performing chief nationwide investigations officer Zodwa Xesibe reported the SIU would consider action to possess these companies blacklisted.
A 4-calendar year probe via the cat888 Unique Investigating Device (SIU) has uncovered five accounting and auditing corporations that served dodgy non-profit businesses loot a huge selection of numerous rands meant for “good results in” with the Lottery.

These firms were explained from the SIU as “professional enablers,” who “compiled fraudulent money statements” that were used by the businesses to apply for Lottery funding.

The five companies ended up named in Parliament from the SIU’s performing Main nationwide investigations officer Zodwa Xesibe. They are TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Services.

Fraudulent financials produced by these five accounting corporations aided nearly 40 providers get their fingers on lottery funding, based on the SIU presentation.

Determined by a Software that contains facts with all lottery grants since 2002, these firms obtained in excess of R314-million in funding.

“These NPCs have been funded with the National Lotteries Fee (NLC) even so the funds weren't utilised for his or her meant function,” Xesibe told Parliament’s Trade, Sector and Opposition Portfolio Committee very last week.

The SIU, the Hawks as well as the Nationwide Prosecuting Authority (NPA) were being in Parliament to report back to the committee on development in bringing individuals and organisations associated with looting the lottery to ebook.

Xesibe instructed GroundUp which the SIU meant to lodge complaints against the accounting corporations associated and was examining if these companies have been registered and, In that case, with which Experienced bodies.

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

To qualify for Lottery funding, an organisation was required to deliver two several years of annual financial statements, Xesibe spelled out in Parliament.

Having said that, as an ongoing 6-yr investigation into lottery corruption by GroundUp has discovered, hijacked non-profit organisations (NPOs) or new shelf non-income companies (NPCs) without financial monitor data were being utilized to submit an application for funding.

In a few occasions, Nearly identical economical statements have been produced for unrelated organisations, frequently with just the names from the organisations changed, GroundUp’s investigation found.

Paperwork submitted by legitimate NPCs for unsuccessful grant apps were typically employed by new or hijacked NPCs and NPOs to submit an application for funding. The details and documents of your unsuccessful applicants have been supplied by senior Lottery officers to your dodgy applicants.

With cursory or - normally - no verification, these dodgy applicants ended up awarded countless rands in grants. At times extra tranches of funds were paid out without Substantially examining on the development of initiatives.

The overwhelming majority of these grants have been made by means of proactive funding, which was at the center with the looting in the lottery. Proactive funding authorized the Minister of Trade, Market and Competition, or even the NLC in conjunction with its board, to establish causes to fund with out initial requiring an application. This was stopped when a new NLC board was appointed.

R2-billion in grants beneath investigation
SIU head Advocate Andy Mothibi stated the SIU was currently investigating grants valued at over R2-billion, as well as unit was nonetheless frequently obtaining tip-offs about more corruption.

He instructed MPs that the SIU’s investigation had been broken into 3 phases: the first, which has been finalised, probed dodgy grants amounting to R280-million, and the next, also completed, involved R247-million. During the third phase, resulting from be finalised at the conclusion of the calendar year, the SIU is investigating grants valued at almost R906-million, involving forty NPOs and NPCs, Mothibi stated.

He claimed which the SIU would utilize “before long” for that Presidential Proclamation, at first granted in Oct 2020 to research corruption involving lottery grants, for being extended to include procurement through the NLC.

The SIU investigation had to this point triggered 13 disciplinary referrals for the NLC, and administrative referrals to SARS and the businesses and Intellectual Attributes Commission to blacklist individuals implicated within the looting. Complaints involving two people today had been referred towards the Authorized Exercise Council and the SA Institute of Chartered Accountants.

The SIU had observed a number of trends underneath the past NLC board and government - many of whom have already been implicated in looting - Mothibi advised MPs.

This incorporated a “trend of collusion between NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “standard maladministration while in the acceptance of grants,” he stated.

Sluggish development through the NPA
The SIU has frozen residences, properties, vehicles and various belongings really worth tens of hundreds of thousands that were purchased with lottery money, but MPs expressed problem at sluggish progress in prosecuting These involved in the looting. (The SIU is mandated only to Recuperate belongings acquired with stolen condition cash and does not have prosecuting powers).

Although the SIU has referred fifteen issues on the NPA, to date only two individuals have been introduced right before a courtroom. Two Males appeared in court docket in Kimberley recently in reference to misappropriated funds gathered to get a challenge to overcome gender-centered violence.

In August 2022 Christopher Tshivule was sentenced to eight several years in jail for his part in the R1.five-million lottery grant fraud. Charges towards two people today charged with him, who the SIU has referred to as “kingpins” from the corruption that confused the NLC, were being dropped.

Important-General Mmeli Makinyane, the acting divisional commissioner for precedence offences, explained to MPs which the Hawks ended up at this time investigating sixteen lottery corruption-relevant situations. One more one particular - the Kimberley issue - is prior to a court docket and two are already sent into the NPA for a choice to prosecute. An extra five scenarios are being investigated with the SAPS detective and forensic providers, he claimed.

Describing The explanations with the delay in prosecutions, NPA Deputy National Director Rodney de Kock mentioned part of The explanation was the Hawks had to do more investigations whenever they acquired dossiers from your SIU.

“In essence, the investigations undertaken via the SIU never satisfy criminal benchmarks for prosecutions.”

Hence, the NPA had to operate with investigators inside the DPCI (the Hawks) and SAPS to perform criminal investigations and ensure that the evidence fulfills prison prosecution expectations, he reported, including: “That said, the do the job from the SIU is crucial and contributes tremendously to this process.”

De Kock claimed which the SIU’s investigation “often results in several referrals. The referrals may well finally result in 1 docket and 1 court case.”

He reported that twelve matters, which are “roughly eighty five% entire”, were being staying jointly investigated because of the Hawks plus the SIU’s Specialised Economic Functions Unit. (A large number of scenarios, 7 of which had been lodged in 2020, contain former NLC chief functioning officer Phillemon Letwaba, who resigned below a cloud in 2022, and Pretoria law firm Leslie Ramulifho.)

De Kock said the NPA faced numerous “issues” in prosecuting conditions. These, he said, integrated

the lapse of time between when the offences were fully commited plus the issuing with the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Before this yr, the SIU informed the committee that crucial documents wanted in a few prosecutions were deleted from your NLC Pc procedure or had absent lacking from Metrofile, a warehouse in which copies of files are archived and stored);
The truth that some implicated people today are still employed by NLC; and
A problem to your legality from the Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to making sure finalisation in these issues. To this end, a group of committed prosecutors has been allocated to oversee all NLC issues at present beneath investigation,” de Kock explained. “Matters are handled being a priority. The moment [the] investigations are concluded, the NPA is likely to make a decision.”

What the companies say (or don’t)
GroundUp was only able to get remark from on the list of 5 firms accused from the SIU in Parliament of manufacturing fraudulent yearly monetary statements,TTP Consulting.

Aubrey Moeng, one of TTP’s two administrators, explained within an e mail in reaction to inquiries: “As a result of shopper confidentiality, we would like to recommend that TTP Consulting is just not willing to divulge consumers’ economical confidential facts with the general public or media … without the consent on the customer or simply a legal reason.”

The organization is actually a “spouse” of a number of state entities, including SARS and the CIPC, Based on its website.

Neither of The 2 directors of Dzata Accountants, who will be both of those listed as inactive around the CIPC sign-up of companies, responded to emailed thoughts. The organization has long been deregistered with the CIPC for failing to post financial statements given that 2021.

The only director of Mageba Ntuli Buying and selling and Consulting Provider, Patrick Zulu, died 3 yrs in the past, As outlined by official information. The organization was deregistered from the CIPC for failing to submit economical statements considering the fact that 2021.

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

GroundUp was unable to obtain any listing for Tafta Consulting and Accounting Expert services Along with the CIPC. We have been also struggling to trace any of the organization’s administrators to ask for comment.