The accountants who aided loot the Lottery

The accountants who aided loot the Lottery

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The Distinctive Investigating Unit has discovered 5 accounting corporations that helped loot Lottery cash. Graphic: Lisa Nelson

The Exclusive Investigating Unit has determined five accounting and auditing corporations that aided non-financial gain businesses loot Lottery funds intended for “good causes”.
The accounting firms compiled fraudulent financial statements utilized by these firms to submit an application for Lottery funding, the SIU advised Parliament.
Performing chief national investigations officer Zodwa Xesibe explained the SIU would acquire action to acquire these corporations blacklisted.
A 4-calendar year probe via the cat888 Unique Investigating Unit (SIU) has exposed 5 accounting and auditing companies that aided dodgy non-earnings organizations loot many numerous rands meant for “good causes” through the Lottery.

These firms have been explained from the SIU as “professional enablers,” who “compiled fraudulent financial statements” that were employed by the businesses to submit an application for Lottery funding.

The five corporations were named in Parliament because of the SIU’s performing Main nationwide investigations officer Zodwa Xesibe. They are TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Companies.

Fraudulent financials made by these 5 accounting corporations served virtually 40 corporations get their arms on lottery funding, according to the SIU presentation.

Determined by a Software that contains details with all lottery grants given that 2002, these corporations obtained around R314-million in funding.

“These NPCs were being funded because of the Nationwide Lotteries Fee (NLC) even so the funds weren't utilised for their meant function,” Xesibe advised Parliament’s Trade, Sector and Opposition Portfolio Committee previous week.

The SIU, the Hawks and the Countrywide Prosecuting Authority (NPA) ended up in Parliament to report back to the committee on progress in bringing persons and organisations linked to looting the lottery to reserve.

Xesibe told GroundUp which the SIU intended to lodge issues from the accounting companies concerned and was examining if these corporations were registered and, If that is so, with which Experienced bodies.

“We would like these corporations to get blacklisted,” she advised GroundUp.

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

On the other hand, as an ongoing six-year investigation into lottery corruption by GroundUp has exposed, hijacked non-earnings organisations (NPOs) or new shelf non-profit providers (NPCs) without any money monitor information were being used to submit an application for funding.

In some occasions, Nearly similar monetary statements were being developed for unrelated organisations, typically with just the names with the organisations transformed, GroundUp’s investigation discovered.

Paperwork submitted by genuine NPCs for unsuccessful grant purposes were being normally utilized by new or hijacked NPCs and NPOs to make an application for funding. The details and documents on the unsuccessful applicants were being supplied by senior Lottery officials to your dodgy applicants.

With cursory or - usually - no verification, these dodgy applicants were being awarded an incredible number of rands in grants. Occasionally further tranches of funds had been paid out without having much examining over the progress of jobs.

The overwhelming majority of those grants were made via proactive funding, which was at the guts in the looting on the lottery. Proactive funding permitted the Minister of Trade, Marketplace and Opposition, or the NLC together with its board, to identify causes to fund without first demanding an application. This was stopped each time a new NLC board was appointed.

R2-billion in grants under investigation
SIU head Advocate Andy Mothibi reported the SIU was at this time investigating grants valued at around R2-billion, and the unit was however routinely receiving idea-offs about a lot more corruption.

He advised MPs the SIU’s investigation were broken into a few phases: the primary, that has been finalised, probed dodgy grants amounting to R280-million, and the second, also accomplished, involved R247-million. Inside the 3rd phase, as a result of be finalised at the conclusion of the calendar year, the SIU is investigating grants valued at Just about R906-million, involving 40 NPOs and NPCs, Mothibi said.

He reported which the SIU would use “soon” for your Presidential Proclamation, initially granted in Oct 2020 to investigate corruption involving lottery grants, to get prolonged to incorporate procurement by the NLC.

The SIU investigation experienced to this point led to 13 disciplinary referrals into the NLC, and administrative referrals to SARS and the businesses and Mental Attributes Fee to blacklist people implicated during the looting. Issues involving two men and women had been referred to the Lawful Exercise Council plus the SA Institute of Chartered Accountants.

The SIU had noticed a number of trends beneath the previous NLC board and govt - many of whom have been implicated in looting - Mothibi explained to MPs.

This involved a “pattern of collusion concerning NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “general maladministration from the approval of grants,” he said.

Sluggish progress through the NPA
The SIU has frozen properties, Houses, cars along with other property value tens of millions which were purchased with lottery money, but MPs expressed problem at slow development in prosecuting All those involved with the looting. (The SIU is mandated only to recover belongings bought with stolen condition funds and does not have prosecuting powers).

While the SIU has referred 15 issues to your NPA, so far only two individuals have been introduced just before a court docket. Two Gentlemen appeared in court in Kimberley a short while ago in connection with misappropriated funds collected for your project to fight gender-based violence.

In August 2022 Christopher Tshivule was sentenced to eight several years in jail for his section inside of a R1.five-million lottery grant fraud. Expenses from two persons billed with him, who the SIU has referred to as “kingpins” while in the corruption that overcome the NLC, had been dropped.

Significant-General Mmeli Makinyane, the performing divisional commissioner for priority offences, informed MPs that the Hawks ended up at present investigating 16 lottery corruption-linked circumstances. Yet another a person - the Kimberley issue - is before a courtroom and two are actually sent into the NPA for a decision to prosecute. A further five scenarios are increasingly being investigated via the SAPS detective and forensic solutions, he explained.

Detailing the reasons for your hold off in prosecutions, NPA Deputy Nationwide Director Rodney de Kock stated A part of The main reason was which the Hawks had to do further investigations when they been given dossiers within the SIU.

“In essence, the investigations undertaken from the SIU never satisfy felony requirements for prosecutions.”

Hence, the NPA had to work with investigators inside the DPCI (the Hawks) and SAPS to conduct legal investigations and make sure the proof satisfies criminal prosecution specifications, he explained, adding: “That said, the function from the SIU is vital and contributes drastically to this process.”

De Kock mentioned that the SIU’s investigation “often brings about a number of referrals. The referrals might finally end in a single docket and one courtroom circumstance.”

He claimed that 12 issues, that are “about eighty five% total”, have been remaining jointly investigated by the Hawks along with the SIU’s Specialised Economic Operations Unit. (A large number of instances, seven of which have been lodged in 2020, involve former NLC Main working officer Phillemon Letwaba, who resigned beneath a cloud in 2022, and Pretoria attorney Leslie Ramulifho.)

De Kock claimed the NPA confronted many “worries” in prosecuting cases. These, he said, bundled

the lapse of your time amongst when the offences were fully commited as well as issuing on the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Before this year, the SIU told the committee that essential files necessary in certain prosecutions were deleted with the NLC Pc process or experienced long gone lacking from Metrofile, a warehouse where copies of files are archived and saved);
The point that some implicated individuals remain used by NLC; and
A problem on the legality of your Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is committed to making sure finalisation in these issues. To this conclusion, a staff of devoted prosecutors has become allocated to supervise all NLC matters at present below investigation,” de Kock stated. “Issues are handled as being a precedence. When [the] investigations are done, the NPA will make a decision.”

What the companies say (or don’t)
GroundUp was only in a position to get comment from one of many five corporations accused by the SIU in Parliament of producing fraudulent yearly economical statements,TTP Consulting.

Aubrey Moeng, certainly one of TTP’s two directors, claimed within an e-mail in response to issues: “Because of consumer confidentiality, we desire to suggest that TTP Consulting just isn't ready to divulge consumers’ financial private information with the general public or media … without the consent with the consumer or even a lawful cause.”

The business is actually a “lover” of numerous condition entities, such as SARS plus the CIPC, In accordance with its Web page.

Neither of The 2 administrators of Dzata Accountants, who will be each shown as inactive over the CIPC sign up of businesses, responded to emailed inquiries. The corporation continues to be deregistered with the CIPC for failing to submit monetary statements given that 2021.

The sole director of Mageba Ntuli Trading and Consulting Services, Patrick Zulu, died three years in the past, As outlined by official documents. The business was deregistered through the CIPC for failing to post fiscal statements because 2021.

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

GroundUp was not able to find any listing for Tafta Consulting and Accounting Expert services Using the CIPC. We ended up also unable to trace any of the company’s directors to request remark.

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