The accountants who assisted loot the Lottery

The accountants who assisted loot the Lottery

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The Exclusive Investigating Device has determined five accounting companies that aided loot Lottery money. Graphic: Lisa Nelson

The Unique Investigating Device has determined five accounting and auditing firms that served non-financial gain providers loot Lottery dollars supposed for “excellent causes”.
The accounting firms compiled fraudulent economic statements utilized by these corporations to submit an application for Lottery funding, the SIU told Parliament.
Acting Main countrywide investigations officer Zodwa Xesibe reported the SIU would take motion to obtain these corporations blacklisted.
A four-yr probe from the lottovip Distinctive Investigating Device (SIU) has exposed five accounting and auditing corporations that aided dodgy non-financial gain corporations loot many a lot of rands intended for “great causes” with the Lottery.

These firms were being described via the SIU as “Specialist enablers,” who “compiled fraudulent financial statements” that were utilized by the businesses to apply for Lottery funding.

The five firms were being named in Parliament from the SIU’s acting chief nationwide investigations officer Zodwa Xesibe. These are TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Solutions.

Fraudulent financials produced by these 5 accounting corporations aided just about forty firms get their fingers on lottery funding, according to the SIU presentation.

According to a Instrument made up of facts with all lottery grants due to the fact 2002, these firms received over R314-million in funding.

“These NPCs ended up funded through the Countrywide Lotteries Commission (NLC) although the funds were not made use of for their meant intent,” Xesibe informed Parliament’s Trade, Marketplace and Opposition Portfolio Committee very last 7 days.

The SIU, the Hawks and the National Prosecuting Authority (NPA) had been in Parliament to report to the committee on progress in bringing individuals and organisations involved in looting the lottery to guide.

Xesibe informed GroundUp that the SIU meant to lodge issues in opposition to the accounting firms involved and was examining if these firms were registered and, If that's so, with which Qualified bodies.

“We want these companies being blacklisted,” she informed GroundUp.

To qualify for Lottery funding, an organisation was needed to generate two years of yearly economical statements, Xesibe described in Parliament.

Having said that, as an ongoing six-12 months investigation into lottery corruption by GroundUp has disclosed, hijacked non-revenue organisations (NPOs) or new shelf non-income providers (NPCs) without having financial track records were used to submit an application for funding.

In certain scenarios, Pretty much similar fiscal statements had been created for unrelated organisations, frequently with just the names in the organisations altered, GroundUp’s investigation found.

Paperwork submitted by genuine NPCs for unsuccessful grant apps were generally used by new or hijacked NPCs and NPOs to make an application for funding. The main points and documents on the unsuccessful applicants were being supplied by senior Lottery officials on the dodgy applicants.

With cursory or - normally - no verification, these dodgy applicants had been awarded an incredible number of rands in grants. Sometimes extra tranches of funds had been paid out with out Significantly checking around the development of jobs.

The overwhelming majority of these grants were made by means of proactive funding, which was at the center of the looting of your lottery. Proactive funding permitted the Minister of Trade, Business and Competition, or even the NLC at the side of its board, to identify leads to to fund without initial necessitating an software. This was stopped each time a new NLC board was appointed.

R2-billion in grants beneath investigation
SIU head Advocate Andy Mothibi mentioned the SIU was at present investigating grants valued at above R2-billion, as well as the device was continue to regularly acquiring idea-offs about additional corruption.

He told MPs that the SIU’s investigation had been broken into three phases: the first, which has been finalised, probed dodgy grants amounting to R280-million, and the next, also completed, concerned R247-million. While in the 3rd phase, resulting from be finalised at the conclusion of the year, the SIU is investigating grants valued at Practically R906-million, involving forty NPOs and NPCs, Mothibi said.

He claimed which the SIU would utilize “shortly” for that Presidential Proclamation, initially granted in October 2020 to research corruption involving lottery grants, being prolonged to include procurement because of the NLC.

The SIU investigation experienced to date triggered 13 disciplinary referrals into the NLC, and administrative referrals to SARS and the Companies and Intellectual Homes Fee to blacklist persons implicated within the looting. Grievances involving two people had been referred to your Lawful Practice Council plus the SA Institute of Chartered Accountants.

The SIU experienced observed many developments beneath the prior NLC board and executive - most of whom happen to be implicated in looting - Mothibi told MPs.

This bundled 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 explained.

Slow progress by the NPA
The SIU has frozen houses, Houses, cars and various belongings worth tens of hundreds of thousands that were bought with lottery funds, but MPs expressed issue at gradual development in prosecuting All those linked to the looting. (The SIU is mandated only to Get better belongings purchased with stolen condition money and does not have prosecuting powers).

Whilst the SIU has referred 15 issues on the NPA, thus far only two individuals have been introduced before a court docket. Two Adult men appeared in courtroom in Kimberley lately in reference to misappropriated cash collected for your undertaking to fight gender-centered violence.

In August 2022 Christopher Tshivule was sentenced to eight yrs in prison for his section in the R1.five-million lottery grant fraud. Charges in opposition to two people charged with him, who the SIU has referred to as “kingpins” during the corruption that overwhelmed the NLC, have been dropped.

Key-Typical Mmeli Makinyane, the performing divisional commissioner for precedence offences, instructed MPs which the Hawks were being presently investigating sixteen lottery corruption-similar scenarios. A different one particular - the Kimberley make a difference - is prior to a court docket and two are already sent on the NPA for a decision to prosecute. An additional 5 circumstances are increasingly being investigated from the SAPS detective and forensic services, he claimed.

Describing The explanations for that hold off in prosecutions, NPA Deputy Countrywide Director Rodney de Kock stated Section of The key reason why was which the Hawks needed to do further investigations once they obtained dossiers from your SIU.

“In essence, the investigations undertaken from the SIU don't fulfill felony expectations for prosecutions.”

For that reason, the NPA had to operate with investigators from the DPCI (the Hawks) and SAPS to carry out criminal investigations and make sure the evidence fulfills criminal prosecution benchmarks, he mentioned, introducing: “That said, the get the job done in the SIU is important and contributes considerably to this method.”

De Kock stated the SIU’s investigation “generally brings about multiple referrals. The referrals could eventually end in a person docket and 1 court circumstance.”

He said that twelve matters, which can be “around eighty five% finish”, have been getting jointly investigated from the Hawks as well as the SIU’s Specialised Financial Operations Device. (The majority of these circumstances, 7 of which had been lodged in 2020, require previous NLC chief running officer Phillemon Letwaba, who resigned less than a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)

De Kock claimed the NPA confronted numerous “worries” in prosecuting cases. These, he mentioned, provided

the lapse of your time concerning in the event the offences were being fully commited and the issuing of the Presidential Proclamation on one November 2020;
“unavailability of witnesses and/or documentary proof” (Previously this year, the SIU told the committee that key files wanted in a few prosecutions had been deleted within the NLC Computer system technique or experienced gone lacking from Metrofile, a warehouse the place copies of documents are archived and stored);
The point that some implicated folks remain employed by NLC; and
A problem into the legality from the Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to making sure finalisation in these issues. To this finish, a staff of focused prosecutors has become allocated to supervise all NLC issues now below investigation,” de Kock stated. “Matters are handled as a precedence. The moment [the] investigations are concluded, the NPA is likely to make a decision.”

What the companies say (or don’t)
GroundUp was only in a position to get remark from on the list of five organizations accused from the SIU in Parliament of manufacturing fraudulent yearly financial statements,TTP Consulting.

Aubrey Moeng, considered one of TTP’s two directors, explained within an email in reaction to questions: “Resulting from client confidentiality, we would like to recommend that TTP Consulting is not willing to divulge consumers’ economical private info with the public or media … without the consent in the consumer or possibly a authorized explanation.”

The corporate is often a “lover” of various condition entities, such as SARS and also the CIPC, according to its Web-site.

Neither of the two administrators of Dzata Accountants, who're each stated as inactive within the CIPC sign up of organizations, responded to emailed issues. The organization has actually been deregistered from the CIPC for failing to submit fiscal statements given that 2021.

The only director of Mageba Ntuli Buying and selling and Consulting Assistance, Patrick Zulu, died a few decades back, In keeping with Formal documents. The corporation was deregistered by the CIPC for failing to post money statements considering the fact that 2021.

Matamela Magodi, the only real director of Magodi Consultants, did not reply to queries emailed to him.

GroundUp was unable to come across any listing for Tafta Consulting and Accounting Companies With all the CIPC. We were being also unable to trace any of the corporation’s directors to request remark.