The Unique Investigating Device has discovered five accounting firms that helped loot Lottery funds. Graphic: Lisa Nelson
The Specific Investigating Unit has determined 5 accounting and auditing firms that assisted non-profit providers loot Lottery cash supposed for “very good brings about”.
The accounting firms compiled fraudulent economical statements used by these businesses to submit an application for Lottery funding, the SIU advised Parliament.
Performing Main national investigations officer Zodwa Xesibe claimed the SIU would choose action to possess these firms blacklisted.
A 4-year probe through the hihuay Special Investigating Device (SIU) has uncovered five accounting and auditing corporations that assisted dodgy non-profit corporations loot numerous many rands meant for “excellent will cause” within the Lottery.
These corporations were explained because of the SIU as “Qualified enablers,” who “compiled fraudulent money statements” that were used by the companies to make an application for Lottery funding.
The 5 businesses have been named in Parliament with the SIU’s acting Main countrywide investigations officer Zodwa Xesibe. They're TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Providers.
Fraudulent financials made by these five accounting companies assisted nearly 40 businesses get their palms on lottery funding, in accordance with the SIU presentation.
According to a Device made up of information with all lottery grants given that 2002, these corporations got more than R314-million in funding.
“These NPCs have been funded through the Nationwide Lotteries Commission (NLC) even so the cash were not applied for his or her intended intent,” Xesibe told Parliament’s Trade, Market and Competitiveness Portfolio Committee previous 7 days.
The SIU, the Hawks and the Countrywide Prosecuting Authority (NPA) have been in Parliament to report back to the committee on progress in bringing people and organisations involved with looting the lottery to ebook.
Xesibe instructed GroundUp which the SIU intended to lodge problems in opposition to the accounting firms associated and was examining if these corporations have been registered and, if so, with which Specialist bodies.
“We wish these firms to be blacklisted,” she explained to GroundUp.
To qualify for Lottery funding, an organisation was necessary to create two decades of annual economic statements, Xesibe spelled out in Parliament.
Nonetheless, as an ongoing six-year investigation into lottery corruption by GroundUp has exposed, hijacked non-earnings organisations (NPOs) or new shelf non-income companies (NPCs) without fiscal track records were utilized to submit an application for funding.
In some instances, Nearly equivalent money statements were generated for unrelated organisations, frequently with only the names of your organisations modified, GroundUp’s investigation observed.
Documents submitted by authentic NPCs for unsuccessful grant programs ended up often employed by new or hijacked NPCs and NPOs to submit an application for funding. The details and files of the unsuccessful applicants were supplied by senior Lottery officers to your dodgy applicants.
With cursory or - often - no verification, these dodgy applicants were being awarded millions of rands in grants. At times extra tranches of resources had been compensated out without Considerably checking to the development of tasks.
The vast majority of those grants ended up made by means of proactive funding, which was at the guts with the looting of your lottery. Proactive funding permitted the Minister of Trade, Sector and Competitiveness, or even the NLC along with its board, to establish causes to fund without the need of 1st requiring an software. This was stopped every time a new NLC board was appointed.
R2-billion in grants under investigation
SIU head Advocate Andy Mothibi said the SIU was now investigating grants valued at about R2-billion, as well as the device was nonetheless consistently getting suggestion-offs about much more corruption.
He instructed MPs which the SIU’s investigation were broken into 3 phases: the first, which has been finalised, probed dodgy grants amounting to R280-million, and the second, also completed, concerned R247-million. In the third phase, on account of be finalised at the end of the yr, the SIU is investigating grants valued at Nearly R906-million, involving forty NPOs and NPCs, Mothibi explained.
He stated which the SIU would use “soon” with the Presidential Proclamation, initially granted in October 2020 to analyze corruption involving lottery grants, for being prolonged to include procurement with the NLC.
The SIU investigation experienced so far resulted in thirteen disciplinary referrals to your NLC, and administrative referrals to SARS and the Companies and Mental Properties Commission to blacklist people implicated during the looting. Issues involving two people today were referred towards the Legal Follow Council as well as SA Institute of Chartered Accountants.
The SIU experienced noticed numerous tendencies beneath the preceding NLC board and government - a lot of whom have already been implicated in looting - Mothibi informed MPs.
This integrated a “development of collusion amongst NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “standard maladministration while in the acceptance of grants,” he explained.
Gradual progress via the NPA
The SIU has frozen houses, Houses, cars and various assets value tens of millions that were bought with lottery money, but MPs expressed worry at sluggish development in prosecuting These associated with the looting. (The SIU is mandated only to Recuperate assets bought with stolen state money and doesn't have prosecuting powers).
While the SIU has referred fifteen issues into the NPA, so far only two folks have been introduced ahead of a courtroom. Two Guys appeared in court in Kimberley a short while ago in connection with misappropriated funds gathered to get a challenge to battle gender-primarily based violence.
In August 2022 Christopher Tshivule was sentenced to 8 many years in prison for his aspect inside a R1.5-million lottery grant fraud. Fees versus two folks charged with him, who the SIU has referred to as “kingpins” from the corruption that confused the NLC, had been dropped.
Big-Standard Mmeli Makinyane, the performing divisional commissioner for precedence offences, instructed MPs the Hawks have been at this time investigating sixteen lottery corruption-associated instances. One more one - the Kimberley make a difference - is just before a court docket and two happen to be despatched to the NPA for a call to prosecute. An extra five instances are being investigated via the SAPS detective and forensic products and services, he mentioned.
Describing The explanations for your hold off in prosecutions, NPA Deputy National Director Rodney de Kock said Component of The explanation was that the Hawks had to do further more investigations after they been given dossiers in the SIU.
“In essence, the investigations undertaken with the SIU will not satisfy legal expectations for prosecutions.”
As a result, the NPA had to work with investigators in the DPCI (the Hawks) and SAPS to perform felony investigations and be certain that the evidence fulfills criminal prosecution criteria, he mentioned, introducing: “Having said that, the function of your SIU is significant and contributes tremendously to this process.”
De Kock said the SIU’s investigation “often leads to many referrals. The referrals might finally cause a person docket and 1 courtroom situation.”
He explained that 12 matters, which might be “approximately eighty five% complete”, were being jointly investigated through the Hawks and also the SIU’s Specialised Economic Functions Unit. (A large number of conditions, seven of which have been lodged in 2020, include previous NLC Main operating officer Phillemon Letwaba, who resigned beneath a cloud in 2022, and Pretoria law firm Leslie Ramulifho.)
De Kock said the NPA faced various “difficulties” in prosecuting situations. These, he reported, included
the lapse of your time involving in the event the offences were committed as well as the issuing from the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary proof” (Previously this yr, the SIU informed the committee that important documents desired in a few prosecutions had been deleted from the NLC computer system or had gone missing from Metrofile, a warehouse in which copies of documents are archived and stored);
The point that some implicated folks remain employed by NLC; and
A problem to the legality on the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is committed to making certain finalisation in these issues. To this end, a group of committed prosecutors has been allocated to oversee all NLC issues presently below investigation,” de Kock explained. “Matters are dealt with like a priority. When [the] investigations are accomplished, the NPA will make a call.”
What the businesses say (or don’t)
GroundUp was only in the position to get remark from on the list of five companies accused via the SIU in Parliament of producing fraudulent once-a-year economic statements,TTP Consulting.
Aubrey Moeng, amongst TTP’s two directors, said in an e mail in reaction to questions: “Resulting from shopper confidentiality, we want to advise that TTP Consulting is just not ready to divulge clientele’ financial confidential data with the general public or media … without the consent on the customer or maybe a authorized explanation.”
The corporate is often a “associate” of many state entities, including SARS as well as CIPC, As outlined by its Internet site.
Neither of the two directors of Dzata Accountants, who are both stated as inactive within the CIPC sign up of firms, responded to emailed questions. The corporation has become deregistered because of the CIPC for failing to post money statements considering that 2021.
The only director of Mageba Ntuli Investing and Consulting Service, Patrick Zulu, died three a long time in the past, As outlined by Formal data. The corporation was deregistered via the CIPC for failing to post fiscal statements because 2021.
Matamela Magodi, the sole director of Magodi Consultants, didn't respond to concerns emailed to him.
GroundUp was unable to find any listing for Tafta Consulting and Accounting Services with the CIPC. We ended up also unable to trace any of the corporate’s administrators to ask for comment.