The accountants who assisted loot the Lottery

The accountants who assisted loot the Lottery

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The Distinctive Investigating Device has determined 5 accounting corporations that helped loot Lottery money. Graphic: Lisa Nelson

The Unique Investigating Unit has discovered five accounting and auditing firms that helped non-income firms loot Lottery money supposed for “fantastic triggers”.
The accounting firms compiled fraudulent economic statements used by these corporations to submit an application for Lottery funding, the SIU explained to Parliament.
Acting Main national investigations officer Zodwa Xesibe stated the SIU would get motion to get these corporations blacklisted.
A four-calendar year probe via the lottovip Distinctive Investigating Unit (SIU) has exposed 5 accounting and auditing corporations that helped dodgy non-financial gain firms loot numerous many rands intended for “great leads to” through the Lottery.

These companies were explained because of the SIU as “Expert enablers,” who “compiled fraudulent financial statements” which were utilized by the companies to make an application for Lottery funding.

The 5 providers ended up named in Parliament with the SIU’s acting Main national investigations officer Zodwa Xesibe. They may be TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Companies.

Fraudulent financials made by these 5 accounting companies assisted almost forty providers get their arms on lottery funding, according to the SIU presentation.

Depending on a tool that contains data with all lottery grants considering the fact that 2002, these businesses obtained more than R314-million in funding.

“These NPCs ended up funded from the National Lotteries Commission (NLC) however the money were not utilised for his or her meant function,” Xesibe explained to Parliament’s Trade, Marketplace and Levels of competition Portfolio Committee past week.

The SIU, the Hawks along with the National Prosecuting Authority (NPA) were being in Parliament to report back to the committee on development in bringing people today and organisations involved with looting the lottery to e book.

Xesibe explained to GroundUp which the SIU meant to lodge problems from the accounting companies concerned and was examining if these companies had been registered and, In that case, with which Specialist bodies.

“We wish these corporations to be blacklisted,” she informed GroundUp.

To qualify for Lottery funding, an organisation was necessary to deliver two a long time of yearly financial statements, Xesibe stated in Parliament.

However, as an ongoing six-yr investigation into lottery corruption by GroundUp has disclosed, hijacked non-revenue organisations (NPOs) or new shelf non-income providers (NPCs) without having economic track data have been used to submit an application for funding.

In a few circumstances, Practically similar fiscal statements had been manufactured for unrelated organisations, often with just the names in the organisations modified, GroundUp’s investigation identified.

Paperwork submitted by legitimate NPCs for unsuccessful grant programs ended up usually employed by new or hijacked NPCs and NPOs to apply for funding. The details and files in the unsuccessful applicants have been supplied by senior Lottery officials to your dodgy applicants.

With cursory or - generally - no verification, these dodgy applicants had been awarded an incredible number of rands in grants. Sometimes supplemental tranches of cash were being paid out without A great deal checking to the development of assignments.

The overwhelming majority of those grants had been designed by way of proactive funding, which was at the center of your looting from the lottery. Proactive funding allowed the Minister of Trade, Marketplace and Level of competition, or the NLC along with its board, to establish triggers to fund devoid of initially demanding 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 in excess of R2-billion, along with the unit was nevertheless often getting idea-offs about additional corruption.

He instructed MPs that the SIU’s investigation were broken into three phases: the very first, that has been finalised, probed dodgy grants amounting to R280-million, and the second, also accomplished, included R247-million. Within the third period, as a result of be finalised at the conclusion of the yr, the SIU is investigating grants valued at Just about R906-million, involving forty NPOs and NPCs, Mothibi claimed.

He said which the SIU would utilize “shortly” to the Presidential Proclamation, originally granted in Oct 2020 to research corruption involving lottery grants, being prolonged to include procurement with the NLC.

The SIU investigation had to this point triggered thirteen disciplinary referrals into the NLC, and administrative referrals to SARS and the Companies and Mental Homes Commission to blacklist people implicated from the looting. Grievances involving two persons were referred to the Authorized Exercise Council and also the SA Institute of Chartered Accountants.

The SIU had noticed several developments beneath the past NLC board and govt - many of whom are implicated in looting - Mothibi explained to MPs.

This incorporated a “development of collusion concerning NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “normal maladministration during the acceptance of grants,” he explained.

Slow progress from the NPA
The SIU has frozen homes, Houses, automobiles and various property truly worth tens of hundreds of thousands which were bought with lottery resources, but MPs expressed concern at slow progress in prosecuting People involved with the looting. (The SIU is mandated only to recover assets acquired with stolen point out funds and doesn't have prosecuting powers).

While the SIU has referred fifteen matters for the NPA, to this point only two people have been introduced prior to a courtroom. Two Adult males appeared in court docket in Kimberley a short while ago in reference to misappropriated money gathered for just a undertaking to overcome gender-based violence.

In August 2022 Christopher Tshivule was sentenced to 8 yrs in prison for his section in the R1.five-million lottery grant fraud. Expenses versus two folks billed with him, who the SIU has described as “kingpins” while in the corruption that overwhelmed the NLC, have been dropped.

Major-Standard Mmeli Makinyane, the performing divisional commissioner for precedence offences, explained to MPs that the Hawks have been at this time investigating sixteen lottery corruption-related instances. An additional 1 - the Kimberley make a difference - is just before a court and two have been sent towards the NPA for a decision to prosecute. An extra five circumstances are being investigated because of the SAPS detective and forensic companies, he stated.

Conveying the reasons with the delay in prosecutions, NPA Deputy Countrywide Director Rodney de Kock said Element of The main reason was the Hawks needed to do additional investigations when they acquired dossiers within the SIU.

“In essence, the investigations undertaken through the SIU never fulfill prison requirements for prosecutions.”

As a result, the NPA had to operate with investigators in the DPCI (the Hawks) and SAPS to perform legal investigations and be certain that the evidence satisfies legal prosecution requirements, he stated, introducing: “That said, the function of the SIU is crucial and contributes considerably to this method.”

De Kock mentioned the SIU’s investigation “usually brings about multiple referrals. The referrals could in the long run bring about a single docket and one particular courtroom scenario.”

He claimed that twelve matters, which happen to be “approximately eighty five% entire”, were being remaining jointly investigated because of the Hawks and the SIU’s Specialised Financial Functions Unit. (Many of these instances, 7 of which have been lodged in 2020, require previous NLC chief functioning officer Phillemon Letwaba, who resigned beneath a cloud in 2022, and Pretoria law firm Leslie Ramulifho.)

De Kock explained the NPA confronted numerous “difficulties” in prosecuting scenarios. These, he mentioned, involved

the lapse of your time between when the offences had been committed as well as the issuing with the Presidential Proclamation on one November 2020;
“unavailability of witnesses and/or documentary proof” (Previously this 12 months, the SIU explained to the committee that important documents needed in certain prosecutions had been deleted from your NLC Personal computer program or experienced absent lacking from Metrofile, a warehouse wherever copies of files are archived and saved);
the fact that some implicated folks remain utilized by NLC; and
A obstacle towards the legality of the Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is dedicated to ensuring finalisation in these matters. To this conclusion, a crew of focused prosecutors has been allotted to supervise all NLC matters currently less than investigation,” de Kock explained. “Issues are managed as a priority. At the time [the] investigations are finished, the NPA can make a choice.”

What the businesses say (or don’t)
GroundUp was only ready to get remark from one of many five businesses accused from the SIU in Parliament of producing fraudulent yearly money statements,TTP Consulting.

Aubrey Moeng, amongst TTP’s two directors, mentioned within an e mail in response to issues: “Resulting from consumer confidentiality, we need to suggest that TTP Consulting is not really ready to disclose shoppers’ economic private information with the public or media … without the consent on the shopper or a legal explanation.”

The organization is often a “lover” of quite a few condition entities, together with SARS plus the CIPC, according to its website.

Neither of The 2 directors of Dzata Accountants, who will be both equally shown as inactive about the CIPC register of firms, responded to emailed questions. The company has long been deregistered because of the CIPC for failing to submit financial statements considering the fact that 2021.

The sole director of Mageba Ntuli Buying and selling and Consulting Assistance, Patrick Zulu, died a few a long time in the past, In keeping with Formal documents. The company was deregistered because of the CIPC for failing to post economical statements given that 2021.

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

GroundUp was not able to come across any listing for Tafta Consulting and Accounting Services with the CIPC. We were being also not able to trace any of the company’s administrators to ask for remark.