The Distinctive Investigating Device has discovered 5 accounting firms that helped loot Lottery money. Graphic: Lisa Nelson
The Unique Investigating Unit has recognized five accounting and auditing companies that helped non-profit corporations loot Lottery money intended for “very good results in”.
The accounting corporations compiled fraudulent economical statements employed by these corporations to make an application for Lottery funding, the SIU advised Parliament.
Acting Main countrywide investigations officer Zodwa Xesibe mentioned the SIU would consider action to own these companies blacklisted.
A four-calendar year probe via the lottovip Distinctive Investigating Device (SIU) has exposed five accounting and auditing corporations that aided dodgy non-earnings companies loot many hundreds of an incredible number of rands designed for “very good triggers” from the Lottery.
These firms ended up described because of the SIU as “Expert enablers,” who “compiled fraudulent monetary statements” that were used by the companies to make an application for Lottery funding.
The five providers were being named in Parliament via 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 Services.
Fraudulent financials made by these five accounting firms served practically 40 companies get their hands on lottery funding, according to the SIU presentation.
According to a Software containing facts with all lottery grants considering the fact that 2002, these corporations obtained in excess of R314-million in funding.
“These NPCs have been funded through the Countrywide Lotteries Fee (NLC) nevertheless the cash were not made use of for his or her intended purpose,” Xesibe explained to Parliament’s Trade, Business and Level of competition Portfolio Committee past 7 days.
The SIU, the Hawks and the National Prosecuting Authority (NPA) were being in Parliament to report back to the committee on progress in bringing folks and organisations associated with looting the lottery to reserve.
Xesibe told GroundUp which the SIU meant to lodge issues in opposition to the accounting firms included and was examining if these firms had been registered and, In that case, with which Skilled bodies.
“We wish these corporations for being blacklisted,” she told GroundUp.
To qualify for Lottery funding, an organisation was required to produce two several years of once-a-year money statements, Xesibe defined in Parliament.
Nonetheless, being an ongoing 6-year investigation into lottery corruption by GroundUp has uncovered, hijacked non-earnings organisations (NPOs) or new shelf non-financial gain providers (NPCs) without money observe data ended up accustomed to submit an application for funding.
In certain scenarios, Practically equivalent money statements have been created for unrelated organisations, normally with only the names with the organisations transformed, GroundUp’s investigation observed.
Files submitted by real NPCs for unsuccessful grant apps were being often utilized by new or hijacked NPCs and NPOs to make an application for funding. The main points and documents on the unsuccessful applicants were equipped by senior Lottery officers to your dodgy applicants.
With cursory or - often - no verification, these dodgy applicants were being awarded millions of rands in grants. Occasionally additional tranches of resources were being paid out out without having Substantially checking within the development of initiatives.
The overwhelming majority of these grants were produced via proactive funding, which was at the center from the looting of your lottery. Proactive funding allowed the Minister of Trade, Business and Competitors, or even the NLC in conjunction with its board, to recognize will cause to fund without the need of first demanding an application. This was stopped whenever a new NLC board was appointed.
R2-billion in grants under investigation
SIU head Advocate Andy Mothibi mentioned the SIU was at present investigating grants valued at around R2-billion, plus the device was however on a regular basis receiving suggestion-offs about more corruption.
He explained to MPs that the SIU’s investigation were damaged into three phases: the primary, that has been finalised, probed dodgy grants amounting to R280-million, and the next, also done, involved R247-million. While in the 3rd section, as a result of be finalised at the end of the 12 months, the SIU is investigating grants valued at Pretty much R906-million, involving forty NPOs and NPCs, Mothibi claimed.
He claimed which the SIU would apply “before long” for the Presidential Proclamation, originally granted in Oct 2020 to research corruption involving lottery grants, being extended to incorporate procurement because of the NLC.
The SIU investigation had up to now triggered 13 disciplinary referrals to the NLC, and administrative referrals to SARS and the Companies and Mental Homes Fee to blacklist people implicated inside the looting. Issues involving two persons were referred into the Legal Exercise Council as well as the SA Institute of Chartered Accountants.
The SIU had observed numerous tendencies beneath the past NLC board and govt - lots of whom have been implicated in looting - Mothibi informed MPs.
This incorporated a “pattern of collusion amongst NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “standard maladministration while in the approval of grants,” he mentioned.
Sluggish progress with the NPA
The SIU has frozen houses, properties, cars as well as other belongings really worth tens of tens of millions which were bought with lottery cash, but MPs expressed worry at slow progress in prosecuting All those involved in the looting. (The SIU is mandated only to Recuperate belongings acquired with stolen point out resources and doesn't have prosecuting powers).
Though the SIU has referred fifteen issues on the NPA, to date only two individuals have been brought just before a court. Two men appeared in court docket in Kimberley lately in reference to misappropriated funds gathered for a project to beat gender-dependent violence.
In August 2022 Christopher Tshivule was sentenced to eight many years in jail for his component inside of a R1.5-million lottery grant fraud. Fees in opposition to two people charged with him, who the SIU has referred to as “kingpins” from the corruption that confused the NLC, were dropped.
Big-General Mmeli Makinyane, the acting divisional commissioner for priority offences, informed MPs the Hawks have been at the moment investigating 16 lottery corruption-connected circumstances. Yet another a single - the Kimberley issue - is just before a court and two are actually despatched towards the NPA for a call to prosecute. A further 5 cases are now being investigated by the SAPS detective and forensic expert services, he stated.
Detailing The explanations with the delay in prosecutions, NPA Deputy Countrywide Director Rodney de Kock stated Element of The main reason was which the Hawks had to do further more investigations after they received dossiers with the SIU.
“In essence, the investigations carried out from the SIU will not fulfill criminal criteria for prosecutions.”
Thus, the NPA experienced to operate with investigators inside the DPCI (the Hawks) and SAPS to carry out felony investigations and ensure that the evidence satisfies felony prosecution criteria, he mentioned, adding: “That said, the work on the SIU is essential and contributes considerably to this method.”
De Kock stated the SIU’s investigation “generally brings about various referrals. The referrals might in the end lead to a single docket and one particular court case.”
He stated that 12 issues, which are “roughly eighty five% finish”, ended up staying jointly investigated because of the Hawks plus the SIU’s Specialised Financial Operations Device. (Most of these scenarios, seven of which were being lodged in 2020, require former NLC Main running officer Phillemon Letwaba, who resigned underneath a cloud in 2022, and Pretoria attorney Leslie Ramulifho.)
De Kock said the NPA confronted many “problems” in prosecuting scenarios. These, he said, provided
the lapse of your time concerning when the offences have been dedicated and also the issuing in the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary proof” (Earlier this year, the SIU instructed the committee that important documents necessary in some prosecutions had been deleted from your NLC Personal computer program or experienced absent missing from Metrofile, a warehouse where by copies of paperwork are archived and stored);
The truth that some implicated men and women are still utilized by NLC; and
A obstacle to your legality in the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is dedicated to making certain finalisation in these issues. To this finish, a workforce of dedicated prosecutors has actually been allotted to supervise all NLC issues presently beneath investigation,” de Kock reported. “Issues are handled as being a priority. After [the] investigations are done, the NPA is likely to make a call.”
What the businesses say (or don’t)
GroundUp was only ready to get remark from one of the 5 corporations accused with the SIU in Parliament of producing fraudulent once-a-year fiscal statements,TTP Consulting.
Aubrey Moeng, one among TTP’s two directors, claimed in an e mail in reaction to queries: “Due to customer confidentiality, we desire to suggest that TTP Consulting is not ready to divulge shoppers’ monetary confidential data with the general public or media … without the consent on the consumer or maybe a authorized motive.”
The corporation is a “partner” of several point out entities, which include SARS along with the CIPC, In line with its Site.
Neither of The 2 directors of Dzata Accountants, who will be equally outlined as inactive to the CIPC register of providers, responded to emailed inquiries. The organization has actually been deregistered through the CIPC for failing to post economical statements given that 2021.
The only real director of Mageba Ntuli Investing and Consulting Services, Patrick Zulu, died three many years ago, As outlined by Formal data. The corporate was deregistered via the CIPC for failing to post fiscal statements due to the fact 2021.
Matamela Magodi, the only director of Magodi Consultants, did not respond to thoughts emailed to him.
GroundUp was not able to discover any listing for Tafta Consulting and Accounting Providers Using the CIPC. We were being also not able to trace any of the organization’s administrators to request comment.