The accountants who aided loot the Lottery
The accountants who aided loot the Lottery
Blog Article
The Special Investigating Unit has determined 5 accounting firms that aided loot Lottery resources. Graphic: Lisa Nelson
The Unique Investigating Unit has determined five accounting and auditing companies that helped non-profit providers loot Lottery income supposed for “good will cause”.
The accounting corporations compiled fraudulent financial statements used by these organizations to make an application for Lottery funding, the SIU instructed Parliament.
Performing chief nationwide investigations officer Zodwa Xesibe mentioned the SIU would just take action to possess these firms blacklisted.
A 4-yr probe through the ruay Special Investigating Unit (SIU) has uncovered 5 accounting and auditing companies that helped dodgy non-earnings organizations loot countless an incredible number of rands intended for “great leads to” from the Lottery.
These companies had been described via the SIU as “Specialist enablers,” who “compiled fraudulent monetary statements” which were used by the companies to submit an application for Lottery funding.
The five firms were named in Parliament with the SIU’s performing Main countrywide investigations officer Zodwa Xesibe. They're TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Expert services.
Fraudulent financials made by these 5 accounting companies served almost 40 corporations get their hands on lottery funding, according to the SIU presentation.
Depending on a Resource that contains knowledge with all lottery grants due to the fact 2002, these providers bought over R314-million in funding.
“These NPCs were being funded because of the Nationwide Lotteries Fee (NLC) although the money weren't employed for his or her intended function,” Xesibe told Parliament’s Trade, Business and Competitors Portfolio Committee very last week.
The SIU, the Hawks plus the Countrywide Prosecuting Authority (NPA) have been in Parliament to report back to the committee on development in bringing people and organisations associated with looting the lottery to e book.
Xesibe told GroundUp that the SIU intended to lodge complaints towards the accounting firms concerned and was checking if these firms were registered and, if so, with which Expert bodies.
“We wish these corporations being blacklisted,” she instructed GroundUp.
To qualify for Lottery funding, an organisation was necessary to generate two many years of once-a-year money statements, Xesibe stated in Parliament.
On the other hand, as an ongoing 6-calendar year investigation into lottery corruption by GroundUp has disclosed, hijacked non-earnings organisations (NPOs) or new shelf non-profit providers (NPCs) without any money track information had been used to apply for funding.
In a few situations, Practically equivalent financial statements ended up made for unrelated organisations, normally with just the names in the organisations improved, GroundUp’s investigation discovered.
Paperwork submitted by legitimate NPCs for unsuccessful grant applications ended up frequently utilized by new or hijacked NPCs and NPOs to submit an application for funding. The main points and files in the unsuccessful applicants have been equipped by senior Lottery officials to the dodgy applicants.
With cursory or - generally - no verification, these dodgy applicants had been awarded many rands in grants. Occasionally extra tranches of cash ended up compensated out without Considerably checking about the progress of tasks.
The vast majority of those grants have been built via proactive funding, which was at the heart with the looting of your lottery. Proactive funding authorized the Minister of Trade, Market and Competitiveness, or maybe the NLC together with its board, to discover results in to fund without the need of initially demanding an software. This was stopped whenever a new NLC board was appointed.
R2-billion in grants less than investigation
SIU head Advocate Andy Mothibi mentioned the SIU was presently investigating grants valued at around R2-billion, as well as device was even now routinely acquiring idea-offs about much more corruption.
He advised MPs the SIU’s investigation had been broken into 3 phases: the initial, that has been finalised, probed dodgy grants amounting to R280-million, and the next, also done, involved R247-million. In the 3rd section, as a result of be finalised at the conclusion of the calendar year, the SIU is investigating grants valued at Virtually R906-million, involving forty NPOs and NPCs, Mothibi stated.
He mentioned the SIU would implement “shortly” for that Presidential Proclamation, initially granted in October 2020 to analyze corruption involving lottery grants, being extended to incorporate procurement from the NLC.
The SIU investigation experienced to date resulted in thirteen disciplinary referrals into the NLC, and administrative referrals to SARS and the Companies and Mental Qualities Fee to blacklist individuals implicated during the looting. Complaints involving two people today had been referred for the Legal Exercise Council as well as the SA Institute of Chartered Accountants.
The SIU had observed several developments beneath the earlier NLC board and executive - many of whom are implicated in looting - Mothibi instructed MPs.
This provided a “trend of collusion involving NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “typical maladministration from the approval of grants,” he reported.
Sluggish development from the NPA
The SIU has frozen households, Homes, cars and other assets value tens of tens of millions which were purchased with lottery cash, but MPs expressed problem at slow progress in prosecuting These involved in the looting. (The SIU is mandated only to Recuperate assets bought with stolen point out resources and doesn't have prosecuting powers).
When the SIU has referred 15 issues on the NPA, up to now only two people have been brought just before a court docket. Two Gentlemen appeared in court docket in Kimberley not long ago in reference to misappropriated money gathered for a job to combat gender-based mostly violence.
In August 2022 Christopher Tshivule was sentenced to 8 many years in prison for his portion inside a R1.5-million lottery grant fraud. Prices versus two individuals charged with him, who the SIU has described as “kingpins” inside the corruption that overcome the NLC, have been dropped.
Key-Standard Mmeli Makinyane, the acting divisional commissioner for priority offences, explained to MPs which the Hawks were being now investigating 16 lottery corruption-relevant situations. Yet another 1 - the Kimberley make a difference - is right before a courtroom and two happen to be despatched on the NPA for a decision to prosecute. An additional 5 circumstances are being investigated with the SAPS detective and forensic services, he mentioned.
Outlining The explanations with the hold off in prosecutions, NPA Deputy Countrywide Director Rodney de Kock said Portion of The rationale was the Hawks had to do more investigations whenever they acquired dossiers through the SIU.
“In essence, the investigations undertaken by the SIU never satisfy criminal benchmarks for prosecutions.”
For that reason, the NPA had to work with investigators in the DPCI (the Hawks) and SAPS to carry out criminal investigations and be sure that the evidence fulfills felony prosecution requirements, he claimed, introducing: “That said, the operate of your SIU is very important and contributes considerably to this method.”
De Kock reported which the SIU’s investigation “often results in numerous referrals. The referrals could eventually cause a single docket and a single court circumstance.”
He claimed that 12 issues, which happen to be “close to 85% total”, were being currently being jointly investigated from the Hawks and also the SIU’s Specialised Financial Functions Unit. (A large number of circumstances, 7 of which were being lodged in 2020, include previous NLC Main functioning officer Phillemon Letwaba, who resigned under a cloud in 2022, and Pretoria attorney Leslie Ramulifho.)
De Kock explained the NPA confronted quite a few “challenges” in prosecuting circumstances. These, he explained, involved
the lapse of your time amongst if the offences have been dedicated as well as the issuing from the Presidential Proclamation on one November 2020;
“unavailability of witnesses and/or documentary proof” (Earlier this calendar year, the SIU instructed the committee that essential documents desired in a few prosecutions were deleted through the NLC Personal computer procedure or had long gone missing from Metrofile, a warehouse the place copies of files are archived and stored);
The reality that some implicated individuals are still utilized by NLC; and
A problem into the legality from the Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to guaranteeing finalisation in these issues. To this close, a team of dedicated prosecutors is allocated to oversee all NLC issues now less than investigation,” de Kock reported. “Issues are dealt with like a priority. Once [the] investigations are completed, the NPA could make a choice.”
What the businesses say (or don’t)
GroundUp was only in the position to get comment from among the 5 organizations accused by the SIU in Parliament of producing fraudulent once-a-year monetary statements,TTP Consulting.
Aubrey Moeng, amongst TTP’s two directors, explained within an email in response to issues: “Because of consumer confidentiality, we prefer to recommend that TTP Consulting is not willing to divulge customers’ economic confidential details with the public or media … without the consent of the shopper or a lawful motive.”
The corporate is often a “associate” of a number of point out entities, which include SARS along with the CIPC, In accordance with its website.
Neither of the two administrators of Dzata Accountants, who are both equally detailed as inactive over the CIPC register of firms, responded to emailed questions. The business has long been deregistered by the CIPC for failing to submit monetary statements considering that 2021.
The only director of Mageba Ntuli Buying and selling and Consulting Assistance, Patrick Zulu, died 3 several years in the past, In line with official records. The company was deregistered via the CIPC for failing to post economic statements given that 2021.
Matamela Magodi, the sole director of Magodi Consultants, didn't respond to issues emailed to him.
GroundUp was unable to obtain any listing for Tafta Consulting and Accounting Expert services With all the CIPC. We were being also unable to trace any of the corporate’s administrators to ask for comment.