The accountants who aided loot the Lottery

The accountants who aided loot the Lottery

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The Special Investigating Device has identified 5 accounting corporations that aided loot Lottery money. Graphic: Lisa Nelson

The Particular Investigating Unit has discovered five accounting and auditing corporations that assisted non-earnings organizations loot Lottery money meant for “great causes”.
The accounting companies compiled fraudulent financial statements utilized by these providers to apply for Lottery funding, the SIU instructed Parliament.
Performing Main national investigations officer Zodwa Xesibe mentioned the SIU would acquire motion to have these firms blacklisted.
A four-year probe through the lottovip Special Investigating Unit (SIU) has exposed five accounting and auditing corporations that served dodgy non-revenue corporations loot hundreds of numerous rands intended for “fantastic results in” from the Lottery.

These corporations were being explained because of the SIU as “Qualified enablers,” who “compiled fraudulent money statements” that were used by the businesses to make an application for Lottery funding.

The 5 corporations have been named in Parliament from the SIU’s performing chief countrywide investigations officer Zodwa Xesibe. They may be TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Solutions.

Fraudulent financials made by these 5 accounting firms aided almost 40 organizations get their fingers on lottery funding, in accordance with the SIU presentation.

Dependant on a Device made up of knowledge with all lottery grants because 2002, these firms obtained around R314-million in funding.

“These NPCs were funded through the Nationwide Lotteries Commission (NLC) but the money were not applied for his or her meant reason,” Xesibe explained to Parliament’s Trade, Marketplace and Levels of competition Portfolio Committee previous 7 days.

The SIU, the Hawks as well as National Prosecuting Authority (NPA) were in Parliament to report back to the committee on progress in bringing people and organisations linked to looting the lottery to e-book.

Xesibe told GroundUp which the SIU intended to lodge grievances against the accounting companies concerned and was examining if these firms have been registered and, If that's the case, with which Specialist bodies.

“We want these businesses being blacklisted,” she explained to GroundUp.

To qualify for Lottery funding, an organisation was required to develop two a long time of once-a-year monetary statements, Xesibe discussed in Parliament.

Nevertheless, as an ongoing six-12 months investigation into lottery corruption by GroundUp has discovered, hijacked non-financial gain organisations (NPOs) or new shelf non-financial gain corporations (NPCs) without fiscal track data have been used to submit an application for funding.

In some scenarios, Just about identical money statements have been created for unrelated organisations, generally with only the names of your organisations adjusted, GroundUp’s investigation found.

Paperwork submitted by real NPCs for unsuccessful grant programs were being usually employed by new or hijacked NPCs and NPOs to apply for funding. The small print and documents of your unsuccessful applicants were provided by senior Lottery officers for the dodgy applicants.

With cursory or - frequently - no verification, these dodgy applicants had been awarded millions of rands in grants. Often more tranches of resources had been paid out with no Considerably checking about the progress of initiatives.

The vast majority of those grants ended up manufactured by way of proactive funding, which was at the guts on the looting from the lottery. Proactive funding permitted the Minister of Trade, Marketplace and Levels of competition, or even the NLC at the side of its board, to recognize results in to fund without having initially demanding an application. This was stopped any time a new NLC board was appointed.

R2-billion in grants under investigation
SIU head Advocate Andy Mothibi stated the SIU was at present investigating grants valued at more than R2-billion, and also the device was still on a regular basis receiving suggestion-offs about extra corruption.

He informed MPs the SIU’s investigation were damaged into three phases: the primary, that has been finalised, probed dodgy grants amounting to R280-million, and the 2nd, also completed, involved R247-million. Within the third phase, on account of be finalised at the conclusion of the yr, the SIU is investigating grants valued at Practically R906-million, involving 40 NPOs and NPCs, Mothibi mentioned.

He stated that the SIU would implement “shortly” for your Presidential Proclamation, originally granted in Oct 2020 to investigate corruption involving lottery grants, to be prolonged to include procurement via the NLC.

The SIU investigation had to this point brought about thirteen disciplinary referrals for the NLC, and administrative referrals to SARS and the businesses and Intellectual Houses Fee to blacklist folks implicated during the looting. Grievances involving two persons were referred to the Legal Follow Council as well as SA Institute of Chartered Accountants.

The SIU experienced noticed several trends under the prior NLC board and executive - many of whom have already been implicated in looting - Mothibi advised MPs.

This provided a “pattern of collusion among NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “general maladministration during the acceptance of grants,” he stated.

Gradual progress by the NPA
The SIU has frozen households, Homes, cars and various assets worthy of tens of hundreds of thousands which were acquired with lottery resources, but MPs expressed concern at sluggish development in prosecuting Those people associated with the looting. (The SIU is mandated only to Recuperate property purchased with stolen condition cash and doesn't have prosecuting powers).

Though the SIU has referred fifteen issues to your NPA, to this point only two folks have been introduced ahead of a court docket. Two Gentlemen appeared in court docket in Kimberley just lately in reference to misappropriated cash collected for your project to fight gender-based mostly violence.

In August 2022 Christopher Tshivule was sentenced to eight decades in prison for his part in a very R1.5-million lottery grant fraud. Prices towards two people today charged with him, who the SIU has called “kingpins” inside the corruption that overwhelmed the NLC, ended up dropped.

Main-Typical Mmeli Makinyane, the acting divisional commissioner for precedence offences, informed MPs the Hawks were at the moment investigating sixteen lottery corruption-linked cases. One more just one - the Kimberley subject - is before a court docket and two are actually despatched on the NPA for a decision to prosecute. A further 5 circumstances are being investigated via the SAPS detective and forensic expert services, he mentioned.

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

“In essence, the investigations carried out by the SIU don't satisfy criminal specifications for prosecutions.”

For that reason, the NPA had to work with investigators inside the DPCI (the Hawks) and SAPS to conduct criminal investigations and make sure that the proof fulfills legal prosecution requirements, he stated, introducing: “That said, the function of the SIU is crucial and contributes drastically to this process.”

De Kock explained that the SIU’s investigation “typically results in a number of referrals. The referrals may eventually bring about 1 docket and just one court docket case.”

He stated that 12 matters, that happen to be “close to eighty five% complete”, were becoming jointly investigated through the Hawks as well as the SIU’s Specialised Economic Functions Device. (These types of scenarios, seven of which had been lodged in 2020, involve previous NLC chief functioning officer Phillemon Letwaba, who resigned beneath a cloud in 2022, and Pretoria attorney Leslie Ramulifho.)

De Kock said the NPA confronted a number of “worries” in prosecuting situations. These, he said, provided

the lapse of your time among if the offences were being committed along with the issuing of your Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Earlier this yr, the SIU advised the committee that critical files desired in certain prosecutions were deleted with the NLC Laptop or computer system or experienced absent missing from Metrofile, a warehouse in which copies of documents are archived and saved);
The reality that some implicated folks are still employed by NLC; and
A problem on the legality on the Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is committed to making sure finalisation in these matters. To this stop, a group of dedicated prosecutors has long been allocated to supervise all NLC matters at present beneath investigation,” de Kock stated. “Matters are dealt with like a precedence. After [the] investigations are completed, the NPA could make a decision.”

What the companies say (or don’t)
GroundUp was only in a position to get remark from one of several 5 firms accused through the SIU in Parliament of manufacturing fraudulent once-a-year fiscal statements,TTP Consulting.

Aubrey Moeng, among TTP’s two administrators, reported within an electronic mail in reaction to questions: “Due to consumer confidentiality, we prefer to suggest that TTP Consulting is just not prepared to disclose consumers’ fiscal confidential information with the general public or media … without the consent with the consumer or a authorized purpose.”

The organization is a “partner” of quite a few state entities, including SARS as well as CIPC, As outlined by its Web site.

Neither of the two directors of Dzata Accountants, who are the two stated as inactive over the CIPC sign up of providers, responded to emailed thoughts. The company is deregistered with the CIPC for failing to submit monetary statements given that 2021.

The sole director of Mageba Ntuli Trading and Consulting Service, Patrick Zulu, died 3 many years back, As outlined by official data. The company was deregistered via the CIPC for failing to submit fiscal statements because 2021.

Matamela Magodi, the only director of Magodi Consultants, didn't reply to queries emailed to him.

GroundUp was struggling to discover any listing for Tafta Consulting and Accounting Companies While using the CIPC. We had been also struggling to trace any of the business’s directors to ask for remark.

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