The accountants who helped loot the Lottery

The accountants who helped loot the Lottery

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The Exclusive Investigating Device has recognized five accounting firms that aided loot Lottery resources. Graphic: Lisa Nelson

The Special Investigating Unit has identified five accounting and auditing firms that helped non-revenue companies loot Lottery funds supposed for “excellent leads to”.
The accounting firms compiled fraudulent economical statements utilized by these providers to make an application for Lottery funding, the SIU advised Parliament.
Acting Main countrywide investigations officer Zodwa Xesibe mentioned the SIU would acquire motion to obtain these corporations blacklisted.
A four-year probe from the ตรวจ หวย Exclusive Investigating Unit (SIU) has exposed 5 accounting and auditing companies that helped dodgy non-earnings corporations loot a huge selection of millions of rands designed for “good leads to” in the Lottery.

These corporations ended up described with the SIU as “professional enablers,” who “compiled fraudulent monetary statements” that were used by the companies to submit an application for Lottery funding.

The five firms ended up named in Parliament through the SIU’s performing chief countrywide investigations officer Zodwa Xesibe. They're TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Services.

Fraudulent financials produced by these five accounting corporations served almost 40 companies get their fingers on lottery funding, according to the SIU presentation.

Depending on a Device that contains information with all lottery grants since 2002, these organizations obtained around R314-million in funding.

“These NPCs ended up funded by the Nationwide Lotteries Commission (NLC) however the money were not utilized for his or her meant objective,” Xesibe told Parliament’s Trade, Marketplace and Opposition Portfolio Committee final 7 days.

The SIU, the Hawks along with the National Prosecuting Authority (NPA) ended up in Parliament to report to the committee on progress in bringing people today and organisations involved in looting the lottery to ebook.

Xesibe instructed GroundUp that the SIU intended to lodge complaints in opposition to the accounting corporations included and was examining if these companies were being registered and, if so, with which Expert bodies.

“We wish these companies to be blacklisted,” she explained to GroundUp.

To qualify for Lottery funding, an organisation was necessary to produce two many years of once-a-year economic statements, Xesibe defined in Parliament.

Nonetheless, as an ongoing 6-12 months investigation into lottery corruption by GroundUp has discovered, hijacked non-income organisations (NPOs) or new shelf non-revenue providers (NPCs) without any economic keep track of information have been utilized to apply for funding.

In some cases, almost identical monetary statements have been developed for unrelated organisations, typically with just the names of the organisations altered, GroundUp’s investigation located.

Paperwork submitted by genuine NPCs for unsuccessful grant apps were normally used by new or hijacked NPCs and NPOs to apply for funding. The main points and documents with the unsuccessful applicants were provided by senior Lottery officers for the dodgy applicants.

With cursory or - often - no verification, these dodgy applicants were being awarded an incredible number of rands in grants. From time to time supplemental tranches of funds have been paid out out without the need of Considerably checking within the progress of tasks.

The vast majority of these grants had been produced by way of proactive funding, which was at the guts of the looting from the lottery. Proactive funding allowed the Minister of Trade, Business and Competitors, or maybe the NLC at the side of its board, to identify causes to fund without the need of to start with requiring an software. 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 in excess of R2-billion, along with the device was even now frequently receiving suggestion-offs about far more corruption.

He advised MPs that the SIU’s investigation were broken into 3 phases: the primary, that has been finalised, probed dodgy grants amounting to R280-million, and the 2nd, also done, concerned R247-million. Inside the 3rd stage, as a result of be finalised at the conclusion of the yr, the SIU is investigating grants valued at Nearly R906-million, involving forty NPOs and NPCs, Mothibi stated.

He reported that the SIU would implement “soon” to the Presidential Proclamation, initially granted in Oct 2020 to analyze corruption involving lottery grants, to be extended to include procurement because of the NLC.

The SIU investigation experienced thus far brought about 13 disciplinary referrals on the NLC, and administrative referrals to SARS and the businesses and Intellectual Properties Commission to blacklist individuals implicated inside the looting. Complaints involving two people were referred to your Legal Observe Council as well as SA Institute of Chartered Accountants.

The SIU had observed several developments underneath the past NLC board and executive - lots of whom are implicated in looting - Mothibi advised MPs.

This integrated a “craze of collusion concerning NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “typical maladministration in the approval of grants,” he explained.

Slow progress with the NPA
The SIU has frozen residences, properties, vehicles and various belongings worth tens of millions which were purchased with lottery funds, but MPs expressed worry at slow progress in prosecuting those involved with the looting. (The SIU is mandated only to recover belongings purchased with stolen condition funds and doesn't have prosecuting powers).

Although the SIU has referred fifteen matters to the NPA, to date only two folks have been introduced ahead of a court docket. Two Guys appeared in court docket in Kimberley just lately in connection with misappropriated money collected for just a task to beat gender-centered violence.

In August 2022 Christopher Tshivule was sentenced to 8 several years in jail for his aspect inside of a R1.five-million lottery grant fraud. Charges versus two persons charged with him, who the SIU has referred to as “kingpins” while in the corruption that overwhelmed the NLC, were dropped.

Significant-Standard Mmeli Makinyane, the acting divisional commissioner for priority offences, informed MPs that the Hawks were being currently investigating sixteen lottery corruption-linked situations. One more 1 - the Kimberley subject - is just before a court docket and two have already been despatched to the NPA for a decision to prosecute. A further five scenarios are increasingly being investigated by the SAPS detective and forensic services, he stated.

Describing The explanations with the hold off in prosecutions, NPA Deputy National Director Rodney de Kock stated A part of The main reason was that the Hawks needed to do even further investigations whenever they acquired dossiers in the SIU.

“In essence, the investigations carried out through the SIU do not satisfy prison expectations for prosecutions.”

As a result, the NPA experienced to operate with investigators from the DPCI (the Hawks) and SAPS to conduct legal investigations and ensure that the evidence fulfills prison prosecution specifications, he reported, introducing: “Having said that, the operate with the SIU is essential and contributes tremendously to this process.”

De Kock reported which the SIU’s investigation “normally ends in many referrals. The referrals may perhaps eventually end in 1 docket and 1 court docket scenario.”

He mentioned that twelve matters, which are “somewhere around eighty five% full”, were being currently being jointly investigated from the Hawks along with the SIU’s Specialised Financial Operations Device. (A large number of cases, seven of which had been lodged in 2020, entail previous NLC Main running officer Phillemon Letwaba, who resigned less than a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)

De Kock mentioned the NPA faced several “challenges” in prosecuting cases. These, he said, bundled

the lapse of time between if the offences had been fully commited plus the issuing in the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Before this yr, the SIU explained to the committee that crucial paperwork needed in some prosecutions were deleted within the NLC Laptop system or had gone lacking from Metrofile, a warehouse exactly where copies of documents are archived and stored);
the fact that some implicated men and women are still utilized by NLC; and
A problem to your legality of your Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to ensuring finalisation in these issues. To this conclusion, a staff of devoted prosecutors has become allotted to supervise all NLC matters at the moment below investigation,” de Kock stated. “Issues are managed as being a priority. The moment [the] investigations are finished, the NPA is likely to make a call.”

What the companies say (or don’t)
GroundUp was only able to get comment from one of several 5 organizations accused via the SIU in Parliament of manufacturing fraudulent once-a-year monetary statements,TTP Consulting.

Aubrey Moeng, one among TTP’s two administrators, claimed within an e mail in response to inquiries: “As a consequence of client confidentiality, we want to advise that TTP Consulting isn't prepared to disclose consumers’ fiscal confidential data with the public or media … with no consent with the consumer or possibly a legal reason.”

The corporation is usually a “associate” of several condition entities, together with SARS and also the CIPC, In keeping with its Site.

Neither of The 2 directors of Dzata Accountants, who're both equally mentioned as inactive on the CIPC sign up of organizations, responded to emailed concerns. The corporate has long been deregistered because of the CIPC for failing to submit economical statements considering the fact that 2021.

The only director of Mageba Ntuli Trading and Consulting Company, Patrick Zulu, died three years in the past, according to official data. The organization was deregistered by the CIPC for failing to submit economical statements considering that 2021.

Matamela Magodi, the only real director of Magodi Consultants, didn't respond to queries emailed to him.

GroundUp was struggling to discover any listing for Tafta Consulting and Accounting Services With all the CIPC. We have been also not able to trace any of the organization’s directors to request remark.

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