The Distinctive Investigating Device has discovered 5 accounting firms that served loot Lottery money. Graphic: Lisa Nelson
The Special Investigating Unit has discovered five accounting and auditing firms that aided non-revenue providers loot Lottery income supposed for “good brings about”.
The accounting companies compiled fraudulent money statements employed by these corporations to submit an application for Lottery funding, the SIU instructed Parliament.
Performing chief countrywide investigations officer Zodwa Xesibe claimed the SIU would acquire action to have these corporations blacklisted.
A four-calendar year probe because of the ruay 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 “good results in” with the Lottery.
These firms were being described via the SIU as “Skilled enablers,” who “compiled fraudulent financial statements” that were utilized by the businesses to apply for Lottery funding.
The five corporations were named in Parliament through the SIU’s performing Main nationwide investigations officer Zodwa Xesibe. They are really TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Providers.
Fraudulent financials produced by these five accounting corporations served nearly forty providers get their arms on lottery funding, in accordance with the SIU presentation.
Based upon a Resource that contains information with all lottery grants because 2002, these companies bought in excess of R314-million in funding.
“These NPCs had been funded by the Nationwide Lotteries Fee (NLC) even so the resources were not applied for his or her intended reason,” Xesibe informed Parliament’s Trade, Marketplace and Opposition Portfolio Committee very last 7 days.
The SIU, the Hawks and also the National Prosecuting Authority (NPA) have been in Parliament to report to the committee on progress in bringing folks and organisations involved with looting the lottery to ebook.
Xesibe instructed GroundUp the SIU intended to lodge complaints against the accounting corporations included and was checking if these firms were being registered and, If that's so, with which Qualified bodies.
“We want these companies being blacklisted,” she advised GroundUp.
To qualify for Lottery funding, an organisation was needed to make two years of yearly financial statements, Xesibe discussed in Parliament.
However, as an ongoing 6-12 months investigation into lottery corruption by GroundUp has uncovered, hijacked non-revenue organisations (NPOs) or new shelf non-profit businesses (NPCs) without any financial observe records ended up utilized to make an application for funding.
In some occasions, Just about equivalent economic statements were manufactured for unrelated organisations, usually with just the names of the organisations improved, GroundUp’s investigation discovered.
Files submitted by genuine NPCs for unsuccessful grant applications had been usually utilized by new or hijacked NPCs and NPOs to submit an application for funding. The small print and files of the unsuccessful applicants were provided by senior Lottery officers for the dodgy applicants.
With cursory or - often - no verification, these dodgy applicants ended up awarded a lot of rands in grants. From time to time more tranches of funds were being paid out out without the need of much examining about the development of projects.
The overwhelming majority of such grants ended up manufactured via proactive funding, which was at the center of the looting with the lottery. Proactive funding allowed the Minister of Trade, Sector and Competitiveness, or maybe the NLC in conjunction with its board, to establish leads to to fund with no initially necessitating an application. This was stopped whenever a new NLC board was appointed.
R2-billion in grants beneath investigation
SIU head Advocate Andy Mothibi explained the SIU was at the moment investigating grants valued at about R2-billion, and also the unit was however on a regular basis receiving idea-offs about extra corruption.
He instructed MPs that the SIU’s investigation had been broken into 3 phases: the first, that has been finalised, probed dodgy grants amounting to R280-million, and the 2nd, also accomplished, associated R247-million. During the 3rd phase, due to be finalised at the end of the year, the SIU is investigating grants valued at almost R906-million, involving forty NPOs and NPCs, Mothibi mentioned.
He stated which the SIU would use “before long” for the Presidential Proclamation, originally granted in Oct 2020 to research corruption involving lottery grants, to get extended to incorporate procurement with the NLC.
The SIU investigation had to date brought about 13 disciplinary referrals into the NLC, and administrative referrals to SARS and the businesses and Intellectual Qualities Fee to blacklist persons implicated while in the looting. Complaints involving two individuals were referred towards the Legal Exercise Council as well as SA Institute of Chartered Accountants.
The SIU had observed a number of traits under the preceding NLC board and govt - lots of whom happen to be implicated in looting - Mothibi advised MPs.
This included a “trend of collusion in between NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “basic maladministration while in the approval of grants,” he said.
Gradual development with the NPA
The SIU has frozen houses, Attributes, autos and various property truly worth tens of thousands and thousands which were acquired with lottery funds, but MPs expressed problem at gradual progress in prosecuting Those people involved with the looting. (The SIU is mandated only to recover assets purchased with stolen point out resources and doesn't have prosecuting powers).
Although the SIU has referred 15 issues into the NPA, to this point only two folks have been brought before a court docket. Two men appeared in court docket in Kimberley recently in reference to misappropriated cash collected for any task to battle gender-based mostly violence.
In August 2022 Christopher Tshivule was sentenced to eight years in prison for his component in a R1.5-million lottery grant fraud. Rates from two individuals charged with him, who the SIU has called “kingpins” during the corruption that overwhelmed the NLC, were dropped.
Significant-Common Mmeli Makinyane, the acting divisional commissioner for precedence offences, explained to MPs which the Hawks ended up now investigating sixteen lottery corruption-relevant situations. A further 1 - the Kimberley make a difference - is prior to a court docket and two are actually sent towards the NPA for a call to prosecute. An additional 5 situations are increasingly being investigated through the SAPS detective and forensic services, he claimed.
Detailing The explanations to the hold off in prosecutions, NPA Deputy National Director Rodney de Kock explained A part of the reason was that the Hawks had to do further more investigations after they been given dossiers in the SIU.
“In essence, the investigations undertaken via the SIU never fulfill legal expectations for prosecutions.”
Thus, the NPA had to operate with investigators from the DPCI (the Hawks) and SAPS to conduct prison investigations and be sure that the evidence fulfills criminal prosecution benchmarks, he mentioned, introducing: “That said, the get the job done of the SIU is significant and contributes tremendously to this method.”
De Kock said the SIU’s investigation “normally results in a number of referrals. The referrals may well in the end cause just one docket and a person court docket circumstance.”
He reported that twelve matters, which happen to be “approximately eighty five% finish”, were remaining jointly investigated via the Hawks plus the SIU’s Specialised Financial Operations Device. (These types of circumstances, 7 of which were lodged in 2020, entail previous NLC chief running officer Phillemon Letwaba, who resigned less than a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)
De Kock mentioned the NPA confronted a number of “troubles” in prosecuting cases. These, he explained, bundled
the lapse of your time between when the offences ended up fully commited as well as the issuing with the Presidential Proclamation on one November 2020;
“unavailability of witnesses and/or documentary proof” (Previously this year, the SIU told the committee that vital paperwork necessary in certain prosecutions were deleted in the NLC Pc procedure or had long gone missing from Metrofile, a warehouse the place copies of documents are archived and stored);
The point that some implicated folks remain used by NLC; and
A challenge for the legality with the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is committed to ensuring finalisation in these matters. To this stop, a staff of focused prosecutors has been allotted to supervise all NLC issues at this time less than investigation,” de Kock reported. “Issues are managed like a priority. Once [the] investigations are completed, the NPA could make a choice.”
What the companies say (or don’t)
GroundUp was only able to get remark from one of many 5 firms accused through the SIU in Parliament of manufacturing fraudulent annual money statements,TTP Consulting.
Aubrey Moeng, among TTP’s two administrators, said in an e mail in reaction to concerns: “As a consequence of client confidentiality, we desire to suggest that TTP Consulting will not be prepared to disclose clients’ monetary confidential info with the public or media … with no consent of your shopper or simply a lawful rationale.”
The corporation is a “partner” of quite a few condition entities, which includes SARS and the CIPC, In keeping with its Web page.
Neither of the two directors of Dzata Accountants, who will be equally listed as inactive about the CIPC sign up of businesses, responded to emailed issues. The business has become deregistered by the CIPC for failing to submit money statements given that 2021.
The only director of Mageba Ntuli Investing and Consulting Company, Patrick Zulu, died a few years back, In accordance with Formal documents. The organization was deregistered through the CIPC for failing to submit fiscal statements considering the fact that 2021.
Matamela Magodi, the only real director of Magodi Consultants, did not reply to thoughts 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.