The accountants who helped loot the Lottery
The accountants who helped loot the Lottery
Blog Article
The Specific Investigating Unit has determined 5 accounting firms that aided loot Lottery funds. Graphic: Lisa Nelson
The Distinctive Investigating Unit has determined five accounting and auditing companies that served non-revenue companies loot Lottery funds supposed for “superior will cause”.
The accounting corporations compiled fraudulent money statements utilized by these businesses to submit an application for Lottery funding, the SIU instructed Parliament.
Acting chief countrywide investigations officer Zodwa Xesibe stated the SIU would choose action to own these corporations blacklisted.
A four-calendar year probe through the ruay Distinctive Investigating Unit (SIU) has uncovered 5 accounting and auditing companies that helped dodgy non-income firms loot countless an incredible number of rands meant for “superior triggers” from the Lottery.
These companies were explained with the SIU as “professional enablers,” who “compiled fraudulent monetary statements” which were employed by the businesses to submit an application for Lottery funding.
The 5 firms ended up named in Parliament through the SIU’s performing chief national investigations officer Zodwa Xesibe. They are TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Companies.
Fraudulent financials produced by these five accounting companies helped nearly forty companies get their arms on lottery funding, according to the SIU presentation.
Depending on a Software that contains data with all lottery grants since 2002, these corporations bought more than R314-million in funding.
“These NPCs have been funded because of the Nationwide Lotteries Commission (NLC) even so the money weren't made use of for his or her supposed function,” Xesibe advised Parliament’s Trade, Market and Levels of competition Portfolio Committee previous 7 days.
The SIU, the Hawks plus the National Prosecuting Authority (NPA) were being in Parliament to report to the committee on progress in bringing persons and organisations involved in looting the lottery to ebook.
Xesibe explained to GroundUp that the SIU intended to lodge problems in opposition to the accounting firms concerned and was examining if these corporations had been registered and, if so, with which Qualified bodies.
“We want these providers for being blacklisted,” she advised GroundUp.
To qualify for Lottery funding, an organisation was necessary to make two several years of annual economical statements, Xesibe discussed in Parliament.
Even so, as an ongoing six-calendar year investigation into lottery corruption by GroundUp has exposed, hijacked non-gain organisations (NPOs) or new shelf non-income firms (NPCs) without having money track data were being used to make an application for funding.
In certain circumstances, Pretty much identical fiscal statements ended up made for unrelated organisations, normally with just the names in the organisations transformed, GroundUp’s investigation found.
Documents submitted by real NPCs for unsuccessful grant apps were frequently employed by new or hijacked NPCs and NPOs to submit an application for funding. The small print and paperwork in the unsuccessful applicants were equipped by senior Lottery officials on the dodgy applicants.
With cursory or - often - no verification, these dodgy applicants had been awarded numerous rands in grants. From time to time supplemental tranches of cash have been paid out without having Significantly checking about the progress of assignments.
The overwhelming majority of these grants had been built through proactive funding, which was at the heart of your looting in the lottery. Proactive funding authorized the Minister of Trade, Field and Competitiveness, or maybe the NLC along with its board, to detect brings about to fund without the need of first requiring an application. This was stopped when a new NLC board was appointed.
R2-billion in grants under investigation
SIU head Advocate Andy Mothibi claimed the SIU was presently investigating grants valued at over R2-billion, as well as device was even now often getting idea-offs about additional corruption.
He instructed MPs that the SIU’s investigation were broken into a few phases: the very first, that has been finalised, probed dodgy grants amounting to R280-million, and the second, also done, involved R247-million. While in the 3rd phase, because of be finalised at the end of the yr, the SIU is investigating grants valued at Virtually R906-million, involving forty NPOs and NPCs, Mothibi claimed.
He stated the SIU would apply “shortly” for your Presidential Proclamation, initially granted in Oct 2020 to analyze corruption involving lottery grants, to generally be prolonged to incorporate procurement because of the NLC.
The SIU investigation had to date resulted in 13 disciplinary referrals for the NLC, and administrative referrals to SARS and the Companies and Mental Attributes Commission to blacklist people today implicated from the looting. Problems involving two people today were referred towards the Lawful Observe Council along with the SA Institute of Chartered Accountants.
The SIU had noticed many developments beneath the previous NLC board and executive - a lot of whom are implicated in looting - Mothibi explained to MPs.
This included a “craze of collusion involving NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “standard maladministration from the approval of grants,” he said.
Sluggish progress because of the NPA
The SIU has frozen properties, properties, autos and also other belongings really worth tens of 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 Get well belongings acquired with stolen state funds and does not have prosecuting powers).
When the SIU has referred fifteen issues into the NPA, to this point only two people have been introduced right before a court docket. Two Adult males appeared in court in Kimberley not too long ago in reference to misappropriated resources gathered for just a project to beat gender-based violence.
In August 2022 Christopher Tshivule was sentenced to eight years in jail for his element within a R1.five-million lottery grant fraud. Fees against two people today charged with him, who the SIU has called “kingpins” within the corruption that overcome the NLC, ended up dropped.
Significant-Basic Mmeli Makinyane, the acting divisional commissioner for priority offences, advised MPs that the Hawks had been at the moment investigating 16 lottery corruption-relevant situations. A different a person - the Kimberley matter - is prior to a court docket and two are sent towards the NPA for a call to prosecute. An additional 5 scenarios are now being investigated from the SAPS detective and forensic companies, he mentioned.
Describing The explanations to the hold off in prosecutions, NPA Deputy National Director Rodney de Kock claimed Portion of The key reason why was that the Hawks had to do even more investigations when they acquired dossiers in the SIU.
“In essence, the investigations undertaken through the SIU will not fulfill felony benchmarks for prosecutions.”
Therefore, the NPA experienced to operate with investigators from the DPCI (the Hawks) and SAPS to carry out felony investigations and make sure the proof fulfills felony prosecution expectations, he mentioned, adding: “That said, the operate from the SIU is important and contributes greatly to this process.”
De Kock claimed which the SIU’s investigation “generally results in many referrals. The referrals might in the long run bring about just one docket and 1 court case.”
He explained that 12 matters, which might be “roughly 85% total”, have been getting jointly investigated with the Hawks plus the SIU’s Specialised Economic Functions Unit. (Most of these conditions, seven of which were lodged in 2020, require previous NLC chief running officer Phillemon Letwaba, who resigned under a cloud in 2022, and Pretoria attorney Leslie Ramulifho.)
De Kock said the NPA faced various “worries” in prosecuting scenarios. These, he mentioned, involved
the lapse of your time between if the offences were being fully commited as well as the issuing of your Presidential Proclamation on one November 2020;
“unavailability of witnesses and/or documentary evidence” (Earlier this year, the SIU informed the committee that essential documents essential in a few prosecutions had been deleted from the NLC Personal computer technique or had long gone missing from Metrofile, a warehouse exactly where copies of files are archived and stored);
the fact that some implicated people today are still used by NLC; and
A challenge into the legality with the Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to making sure finalisation in these matters. To this conclusion, a group of committed prosecutors continues to be allocated to supervise all NLC issues presently beneath investigation,” de Kock reported. “Matters are dealt with for a precedence. At the time [the] investigations are completed, the NPA will make a decision.”
What the companies say (or don’t)
GroundUp was only in a position to get remark from one of many five providers accused by the SIU in Parliament of manufacturing fraudulent annual financial statements,TTP Consulting.
Aubrey Moeng, amongst TTP’s two administrators, explained in an e-mail in reaction to queries: “As a result of shopper confidentiality, we would like to recommend that TTP Consulting just isn't prepared to disclose purchasers’ economic private data with the general public or media … with no consent from the customer or a authorized explanation.”
The corporate is usually a “partner” of a number of point out entities, together with SARS plus the CIPC, In keeping with its Web page.
Neither of the two administrators of Dzata Accountants, that are each stated as inactive within the CIPC sign up of organizations, responded to emailed questions. The business continues to be deregistered via the CIPC for failing to submit economic statements since 2021.
The sole director of Mageba Ntuli Trading and Consulting Provider, Patrick Zulu, died 3 yrs back, according to Formal documents. The company was deregistered by the CIPC for failing to post money statements due to the fact 2021.
Matamela Magodi, the only director of Magodi Consultants, did not reply to issues emailed to him.
GroundUp was not able to uncover any listing for Tafta Consulting and Accounting Companies Along with the CIPC. We had been also struggling to trace any of the business’s administrators to ask for comment.