The accountants who assisted loot the Lottery

The accountants who assisted loot the Lottery

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The Unique Investigating Unit has recognized 5 accounting corporations that aided loot Lottery funds. Graphic: Lisa Nelson

The Distinctive Investigating Unit has recognized 5 accounting and auditing corporations that served non-earnings companies loot Lottery income meant for “superior leads to”.
The accounting firms compiled fraudulent economic statements utilized by these firms to make an application for Lottery funding, the SIU advised Parliament.
Acting Main countrywide investigations officer Zodwa Xesibe claimed the SIU would just take action to have these corporations blacklisted.
A four-calendar year probe with the cat888 Distinctive Investigating Device (SIU) has exposed five accounting and auditing corporations that aided dodgy non-financial gain corporations loot many a lot of rands meant for “good results in” through the Lottery.

These firms ended up described because of the SIU as “Skilled enablers,” who “compiled fraudulent economical statements” that were used by the companies to submit an application for Lottery funding.

The 5 businesses ended up named in Parliament via the SIU’s acting chief national investigations officer Zodwa Xesibe. They may be TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Expert services.

Fraudulent financials made by these five accounting companies assisted practically 40 businesses get their hands on lottery funding, in accordance with the SIU presentation.

Dependant on a Software that contains info with all lottery grants given that 2002, these businesses bought in excess of R314-million in funding.

“These NPCs had been funded by the Nationwide Lotteries Fee (NLC) nevertheless the resources were not utilised for his or her supposed goal,” Xesibe instructed Parliament’s Trade, Business and Level of competition Portfolio Committee final week.

The SIU, the Hawks along with the Nationwide Prosecuting Authority (NPA) were being in Parliament to report back to the committee on development in bringing persons and organisations linked to looting the lottery to reserve.

Xesibe explained to GroundUp which the SIU intended to lodge grievances towards the accounting corporations included and was checking if these corporations ended up registered and, In that case, with which Skilled bodies.

“We want these corporations to get blacklisted,” she told GroundUp.

To qualify for Lottery funding, an organisation was necessary to create two decades of annual money statements, Xesibe defined in Parliament.

Having said that, being an ongoing six-yr investigation into lottery corruption by GroundUp has discovered, hijacked non-profit organisations (NPOs) or new shelf non-earnings corporations (NPCs) without having financial track records were used to apply for funding.

In certain scenarios, Pretty much equivalent fiscal statements have been made for unrelated organisations, frequently with just the names on the organisations modified, GroundUp’s investigation found.

Files submitted by real NPCs for unsuccessful grant purposes had been generally used by new or hijacked NPCs and NPOs to make an application for funding. The main points and documents with the unsuccessful applicants were provided by senior Lottery officers into the dodgy applicants.

With cursory or - frequently - no verification, these dodgy applicants have been awarded millions of rands in grants. At times added tranches of cash ended up paid out out devoid of A great deal examining to the progress of tasks.

The vast majority of such grants have been created by way of proactive funding, which was at the guts with the looting in the lottery. Proactive funding allowed the Minister of Trade, Marketplace and Competitiveness, or the NLC at the side of its board, to recognize results in to fund with no first requiring an application. This was stopped every time a new NLC board was appointed.

R2-billion in grants under investigation
SIU head Advocate Andy Mothibi mentioned the SIU was at the moment investigating grants valued at above R2-billion, along with the unit was continue to frequently acquiring suggestion-offs about far more corruption.

He told MPs that the SIU’s investigation had been broken into three phases: the primary, that has been finalised, probed dodgy grants amounting to R280-million, and the next, also concluded, concerned R247-million. During the 3rd stage, on account of be finalised at the conclusion of the yr, the SIU is investigating grants valued at Nearly R906-million, involving forty NPOs and NPCs, Mothibi said.

He said the SIU would apply “shortly” for the Presidential Proclamation, initially granted in Oct 2020 to research corruption involving lottery grants, for being prolonged to include procurement by the NLC.

The SIU investigation experienced so far brought about 13 disciplinary referrals towards the NLC, and administrative referrals to SARS and the businesses and Intellectual Houses Fee to blacklist people today implicated within the looting. Issues involving two persons had been referred for the Legal Practice Council as well as the SA Institute of Chartered Accountants.

The SIU had noticed many developments underneath the preceding NLC board and executive - most of whom are implicated in looting - Mothibi advised MPs.

This included a “craze of collusion in between NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “common maladministration during the approval of grants,” he claimed.

Slow progress because of the NPA
The SIU has frozen properties, Attributes, vehicles as well as other property worth tens of thousands and thousands which were acquired with lottery funds, but MPs expressed issue at gradual development in prosecuting All those involved with the looting. (The SIU is mandated only to Get well property bought with stolen point out money and does not have prosecuting powers).

While the SIU has referred fifteen matters into the NPA, thus far only two people have been introduced ahead of a court. Two Adult males appeared in courtroom in Kimberley recently in connection with misappropriated cash gathered for any challenge to fight gender-dependent violence.

In August 2022 Christopher Tshivule was sentenced to 8 a long time in prison for his aspect in a R1.5-million lottery grant fraud. Expenses from two people billed with him, who the SIU has called “kingpins” in the corruption that confused the NLC, were dropped.

Major-General Mmeli Makinyane, the performing divisional commissioner for precedence offences, advised MPs that the Hawks were currently investigating sixteen lottery corruption-relevant circumstances. An additional one - the Kimberley subject - is just before a court docket and two are already despatched for the NPA for a call to prosecute. An extra five situations are increasingly being investigated through the SAPS detective and forensic services, he mentioned.

Outlining The explanations for the hold off in prosecutions, NPA Deputy Countrywide Director Rodney de Kock stated Portion of The rationale was the Hawks had to do more investigations whenever they acquired dossiers from your SIU.

“In essence, the investigations undertaken by the SIU never fulfill criminal standards for prosecutions.”

Hence, the NPA had to operate with investigators inside the DPCI (the Hawks) and SAPS to perform legal investigations and ensure that the evidence satisfies criminal prosecution criteria, he said, incorporating: “Having said that, the work in the SIU is crucial and contributes tremendously to this process.”

De Kock explained the SIU’s investigation “generally brings about multiple referrals. The referrals might in the end lead to 1 docket and 1 court circumstance.”

He explained that 12 issues, which happen to be “somewhere around 85% complete”, were being currently being jointly investigated through the Hawks and the SIU’s Specialised Economic Functions Device. (The majority of these conditions, seven of which have been lodged in 2020, contain former NLC chief working officer Phillemon Letwaba, who resigned underneath a cloud in 2022, and Pretoria law firm Leslie Ramulifho.)

De Kock reported the NPA confronted a number of “problems” in prosecuting situations. These, he claimed, bundled

the lapse of your time involving if the offences ended up dedicated as well as the issuing in the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary proof” (Earlier this calendar year, the SIU instructed the committee that essential documents wanted in some prosecutions were deleted from your NLC computer process or had absent missing from Metrofile, a warehouse wherever copies of files are archived and saved);
The point that some implicated individuals are still used by NLC; and
A obstacle into the legality of your Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to making certain finalisation in these matters. To this end, a workforce of focused prosecutors has actually been allocated to supervise all NLC matters presently under investigation,” de Kock claimed. “Matters are taken care of like a precedence. After [the] investigations are completed, the NPA is likely to make a decision.”

What the companies say (or don’t)
GroundUp was only ready to get comment from among the list of 5 businesses accused because of the SIU in Parliament of manufacturing fraudulent annual economic statements,TTP Consulting.

Aubrey Moeng, considered one of TTP’s two administrators, reported within an electronic mail in reaction to questions: “As a result of consumer confidentiality, we desire to advise that TTP Consulting just isn't willing to disclose purchasers’ money confidential info with the general public or media … without the consent from the shopper or maybe a legal rationale.”

The corporate is actually a “partner” of various state entities, like SARS and also the CIPC, In keeping with its Site.

Neither of The 2 administrators of Dzata Accountants, who will be both shown as inactive to the CIPC sign up of companies, responded to emailed queries. The business has actually been deregistered via the CIPC for failing to post money statements considering the fact that 2021.

The only real director of Mageba Ntuli Buying and selling and Consulting Provider, Patrick Zulu, died three years back, In line with official data. The business was deregistered from the CIPC for failing to post economic statements because 2021.

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

GroundUp was unable to uncover any listing for Tafta Consulting and Accounting Solutions Along with the CIPC. We were also unable to trace any of the corporate’s administrators to request remark.