The accountants who helped loot the Lottery

The accountants who helped loot the Lottery

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The Distinctive Investigating Device has recognized five accounting firms that helped loot Lottery resources. Graphic: Lisa Nelson

The Distinctive Investigating Device has determined five accounting and auditing firms that helped non-profit businesses loot Lottery money supposed for “very good brings about”.
The accounting firms compiled fraudulent money statements used by these corporations to apply for Lottery funding, the SIU instructed Parliament.
Performing Main national investigations officer Zodwa Xesibe explained the SIU would take action to obtain these firms blacklisted.
A four-year probe with the fox888 Special Investigating Unit (SIU) has uncovered 5 accounting and auditing firms that assisted dodgy non-financial gain companies loot countless millions of rands meant for “excellent will cause” from the Lottery.

These corporations were described by the SIU as “Expert enablers,” who “compiled fraudulent monetary statements” which were utilized by the companies to apply for Lottery funding.

The 5 corporations ended up named in Parliament with the SIU’s acting chief national investigations officer Zodwa Xesibe. These are TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Expert services.

Fraudulent financials produced by these five accounting corporations assisted approximately 40 corporations get their arms on lottery funding, according to the SIU presentation.

Based upon a tool containing info with all lottery grants due to the fact 2002, these companies got more than R314-million in funding.

“These NPCs had been funded through the National Lotteries Commission (NLC) but the resources weren't employed for their supposed function,” Xesibe advised Parliament’s Trade, Business and Opposition Portfolio Committee last 7 days.

The SIU, the Hawks and also the Countrywide Prosecuting Authority (NPA) had been in Parliament to report back to the committee on development in bringing men and women and organisations linked to looting the lottery to e-book.

Xesibe explained to GroundUp that the SIU intended to lodge complaints from the accounting firms associated and was examining if these firms had been registered and, If that's so, with which Experienced bodies.

“We want these businesses to become blacklisted,” she told GroundUp.

To qualify for Lottery funding, an organisation was required to make two decades of yearly economic statements, Xesibe explained in Parliament.

However, being an ongoing 6-12 months investigation into lottery corruption by GroundUp has disclosed, hijacked non-earnings organisations (NPOs) or new shelf non-financial gain providers (NPCs) without fiscal track records had been used to apply for funding.

In certain situations, Nearly equivalent economical statements were generated for unrelated organisations, often with just the names in the organisations improved, GroundUp’s investigation identified.

Paperwork submitted by legitimate NPCs for unsuccessful grant purposes had been generally employed by new or hijacked NPCs and NPOs to apply for funding. The small print and paperwork with the unsuccessful applicants were supplied by senior Lottery officers towards the dodgy applicants.

With cursory or - frequently - no verification, these dodgy applicants were awarded a lot of rands in grants. In some cases additional tranches of resources had been compensated out without the need of Substantially examining on the development of tasks.

The overwhelming majority of such grants had been designed by way of proactive funding, which was at the guts of your looting from the lottery. Proactive funding permitted the Minister of Trade, Field and Level of competition, or the NLC along side its board, to identify leads to to fund without first 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 presently investigating grants valued at around R2-billion, along with the device was nevertheless regularly getting idea-offs about more corruption.

He advised MPs the SIU’s investigation were damaged into a few phases: the very first, which has been finalised, probed dodgy grants amounting to R280-million, and the next, also accomplished, included R247-million. During the 3rd section, due to be finalised at the conclusion of the calendar year, the SIU is investigating grants valued at Pretty much R906-million, involving forty NPOs and NPCs, Mothibi claimed.

He explained the SIU would apply “before long” with the Presidential Proclamation, initially granted in October 2020 to research corruption involving lottery grants, for being prolonged to include procurement from the NLC.

The SIU investigation experienced up to now triggered 13 disciplinary referrals to your NLC, and administrative referrals to SARS and the Companies and Intellectual Attributes Commission to blacklist persons implicated within the looting. Grievances involving two people today had been referred towards the Authorized Exercise Council and the SA Institute of Chartered Accountants.

The SIU had observed numerous developments beneath the earlier NLC board and government - a lot of whom are already implicated in looting - Mothibi instructed MPs.

This involved a “craze of collusion amongst NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “general maladministration during the approval of grants,” he stated.

Gradual progress by the NPA
The SIU has frozen residences, Qualities, cars and trucks together with other assets value tens of millions that were purchased with lottery resources, but MPs expressed concern at slow progress in prosecuting All those involved in the looting. (The SIU is mandated only to recover assets bought with stolen condition money and does not have prosecuting powers).

When the SIU has referred fifteen issues to your NPA, thus far only two folks have been introduced ahead of a courtroom. Two Guys appeared in court in Kimberley lately in reference to misappropriated cash collected to get a project to beat gender-based mostly violence.

In August 2022 Christopher Tshivule was sentenced to eight yrs in prison for his aspect in the R1.five-million lottery grant fraud. Expenses against two persons billed with him, who the SIU has described as “kingpins” from the corruption that overwhelmed the NLC, have been dropped.

Big-Common Mmeli Makinyane, the acting divisional commissioner for priority offences, instructed MPs which the Hawks were being presently investigating 16 lottery corruption-connected situations. A different a person - the Kimberley matter - is before a court docket and two are actually despatched on the NPA for a decision to prosecute. An extra five circumstances are being investigated via the SAPS detective and forensic expert services, he explained.

Explaining The explanations for the delay in prosecutions, NPA Deputy Countrywide Director Rodney de Kock stated Element of The explanation was which the Hawks needed to do more investigations every time they received dossiers through the SIU.

“In essence, the investigations carried out via the SIU do not satisfy criminal requirements for prosecutions.”

For that reason, the NPA had to work with investigators within the DPCI (the Hawks) and SAPS to conduct felony investigations and make sure that the proof meets legal prosecution benchmarks, he explained, introducing: “That said, the operate of the SIU is vital and contributes greatly to this process.”

De Kock mentioned the SIU’s investigation “generally brings about multiple referrals. The referrals might in the end lead to a single docket and a single court case.”

He said that twelve matters, which can be “around 85% entire”, ended up getting jointly investigated from the Hawks and the SIU’s Specialised Economic Functions Unit. (A large number of circumstances, 7 of which had been lodged in 2020, contain former NLC chief running officer Phillemon Letwaba, who resigned under a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)

De Kock claimed the NPA confronted a number of “issues” in prosecuting conditions. These, he said, incorporated

the lapse of time among once the offences have been dedicated along with the issuing on the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Before this 12 months, the SIU advised the committee that crucial documents desired in a few prosecutions had been deleted within the NLC Laptop or computer technique or had absent lacking from Metrofile, a warehouse wherever copies of documents are archived and saved);
the fact that some implicated men and women remain employed by NLC; and
A problem to the legality in the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is dedicated to ensuring finalisation in these matters. To this conclude, a workforce of dedicated prosecutors is allotted to supervise all NLC matters at this time less than investigation,” de Kock said. “Issues are taken care of to be a precedence. At the time [the] investigations are done, the NPA could make a choice.”

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

Aubrey Moeng, considered one of TTP’s two administrators, explained in an email in reaction to thoughts: “Because of shopper confidentiality, we prefer to suggest that TTP Consulting just isn't willing to divulge customers’ money confidential information and facts with the public or media … with no consent from the customer or possibly a legal motive.”

The corporate is really a “lover” of a number of condition entities, including SARS along with the CIPC, In keeping with its Web page.

Neither of The 2 directors of Dzata Accountants, who are the two shown as inactive over the CIPC sign up of companies, responded to emailed questions. The organization continues to be deregistered from the CIPC for failing to post fiscal statements considering the fact that 2021.

The only director of Mageba Ntuli Investing and Consulting Support, Patrick Zulu, died a few yrs ago, according to official data. The company was deregistered with the CIPC for failing to post monetary statements due to the fact 2021.

Matamela Magodi, the sole director of Magodi Consultants, did not respond to concerns emailed to him.

GroundUp was not able to uncover any listing for Tafta Consulting and Accounting Products and services Using the CIPC. We had been also unable to trace any of the company’s administrators to ask for comment.

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