The Distinctive Investigating Unit has determined 5 accounting firms that assisted loot Lottery money. Graphic: Lisa Nelson
The Special Investigating Unit has recognized five accounting and auditing firms that helped non-income firms loot Lottery cash supposed for “excellent results in”.
The accounting companies compiled fraudulent money statements used by these companies to submit an application for Lottery funding, the SIU instructed Parliament.
Performing Main national investigations officer Zodwa Xesibe said the SIU would acquire motion to acquire these firms blacklisted.
A four-calendar year probe because of the fox888 Particular Investigating Device (SIU) has uncovered 5 accounting and auditing corporations that helped dodgy non-revenue companies loot hundreds of millions of rands designed for “fantastic will cause” within the Lottery.
These corporations were being explained because of the SIU as “professional enablers,” who “compiled fraudulent financial statements” which were used by the companies to apply for Lottery funding.
The 5 companies have been named in Parliament because of the SIU’s acting chief national investigations officer Zodwa Xesibe. They're TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Companies.
Fraudulent financials produced by these 5 accounting corporations helped approximately 40 companies get their palms on lottery funding, in accordance with the SIU presentation.
Based upon a Instrument that contains data with all lottery grants considering that 2002, these organizations got about R314-million in funding.
“These NPCs ended up funded from the National Lotteries Commission (NLC) nevertheless the money were not applied for his or her meant goal,” Xesibe advised Parliament’s Trade, Market and Competition Portfolio Committee last 7 days.
The SIU, the Hawks and the Countrywide Prosecuting Authority (NPA) have been in Parliament to report back to the committee on progress in bringing individuals and organisations associated with looting the lottery to e-book.
Xesibe informed GroundUp the SIU meant to lodge grievances against the accounting companies involved and was examining if these firms were being registered and, In that case, with which Specialist bodies.
“We wish these providers for being blacklisted,” she explained to GroundUp.
To qualify for Lottery funding, an organisation was necessary to develop two many years of annual economical statements, Xesibe discussed in Parliament.
On the other hand, as an ongoing 6-yr investigation into lottery corruption by GroundUp has uncovered, hijacked non-earnings organisations (NPOs) or new shelf non-financial gain providers (NPCs) without having money observe documents were being utilized to apply for funding.
In certain situations, almost equivalent fiscal statements had been manufactured for unrelated organisations, typically with just the names with the organisations modified, GroundUp’s investigation uncovered.
Documents submitted by legitimate NPCs for unsuccessful grant apps were being usually used by new or hijacked NPCs and NPOs to apply for funding. The small print and documents from the unsuccessful applicants were being supplied by senior Lottery officers for the dodgy applicants.
With cursory or - usually - no verification, these dodgy applicants were awarded millions of rands in grants. Occasionally additional tranches of money were paid out out without the need of Considerably examining around the progress of jobs.
The vast majority of those grants were designed via proactive funding, which was at the heart of your looting on the lottery. Proactive funding authorized the Minister of Trade, Business and Competitors, or even the NLC at the side of its board, to identify leads to to fund without having to start with demanding an application. This was stopped whenever a new NLC board was appointed.
R2-billion in grants less than investigation
SIU head Advocate Andy Mothibi claimed the SIU was now investigating grants valued at above R2-billion, plus the unit was nevertheless routinely acquiring idea-offs about extra corruption.
He explained to MPs that the SIU’s investigation had been broken into 3 phases: the initial, that has been finalised, probed dodgy grants amounting to R280-million, and the 2nd, also accomplished, involved R247-million. Within the third period, resulting from be finalised at the end of the calendar year, the SIU is investigating grants valued at Practically R906-million, involving forty NPOs and NPCs, Mothibi claimed.
He mentioned which the SIU would implement “soon” for the Presidential Proclamation, at first granted in Oct 2020 to investigate corruption involving lottery grants, to get extended to include procurement through the NLC.
The SIU investigation had so far triggered 13 disciplinary referrals towards the NLC, and administrative referrals to SARS and the businesses and Intellectual Attributes Commission to blacklist people today implicated within the looting. Grievances involving two people today had been referred for the Lawful Observe Council along with the SA Institute of Chartered Accountants.
The SIU had observed many trends under the past NLC board and govt - many of whom have been implicated in looting - Mothibi informed MPs.
This incorporated a “pattern of collusion among NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “common maladministration within the acceptance of grants,” he reported.
Sluggish progress by the NPA
The SIU has frozen houses, Homes, vehicles and also other assets worthy of tens of hundreds of thousands which were bought with lottery funds, but MPs expressed problem at slow progress in prosecuting These linked to the looting. (The SIU is mandated only to recover assets bought with stolen state funds and does not have prosecuting powers).
When the SIU has referred fifteen matters towards the NPA, to date only two individuals have been brought just before a court. Two Males appeared in court in Kimberley not too long ago in reference to misappropriated resources collected for any undertaking to overcome gender-based mostly violence.
In August 2022 Christopher Tshivule was sentenced to eight a long time in jail for his component within a R1.five-million lottery grant fraud. Prices towards two individuals billed with him, who the SIU has called “kingpins” during the corruption that overwhelmed the NLC, had been dropped.
Major-Standard Mmeli Makinyane, the performing divisional commissioner for priority offences, informed MPs the Hawks ended up presently investigating 16 lottery corruption-connected scenarios. An additional a single - the Kimberley subject - is right before a court docket and two have been despatched to your NPA for a choice to prosecute. An additional five circumstances are being investigated from the SAPS detective and forensic providers, he reported.
Conveying the reasons with the delay in prosecutions, NPA Deputy Nationwide Director Rodney de Kock mentioned A part of the reason was the Hawks had to do further more investigations every time they received dossiers through the SIU.
“In essence, the investigations undertaken because of the SIU don't satisfy legal benchmarks for prosecutions.”
As a result, the NPA had to work with investigators while in the DPCI (the Hawks) and SAPS to carry out criminal investigations and be certain that the evidence satisfies prison prosecution standards, he said, introducing: “That said, the do the job of your SIU is important and contributes enormously to this method.”
De Kock mentioned which the SIU’s investigation “usually brings about multiple referrals. The referrals might in the end bring about a single docket and a single court docket situation.”
He said that 12 matters, that are “close to eighty five% comprehensive”, were being jointly investigated through the Hawks plus the SIU’s Specialised Economic Functions Device. (Most of these circumstances, seven of which were lodged in 2020, include former NLC Main working officer Phillemon Letwaba, who resigned beneath a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)
De Kock mentioned the NPA confronted various “challenges” in prosecuting instances. These, he reported, provided
the lapse of time between if the offences were dedicated along with the issuing with the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary proof” (Before this yr, the SIU told the committee that vital paperwork essential in certain prosecutions were deleted within the NLC Pc program or had absent missing from Metrofile, a warehouse exactly where copies of documents are archived and saved);
The truth that some implicated people remain employed by NLC; and
A problem to the legality on the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is committed to guaranteeing finalisation in these issues. To this stop, a workforce of devoted prosecutors is allotted to supervise all NLC matters at the moment underneath investigation,” de Kock stated. “Matters are handled like a priority. As soon as [the] investigations are finished, the NPA can make a call.”
What the businesses say (or don’t)
GroundUp was only in the position to get comment from among the list of 5 organizations accused from the SIU in Parliament of manufacturing fraudulent yearly monetary statements,TTP Consulting.
Aubrey Moeng, one of TTP’s two administrators, mentioned within an email in response to concerns: “As a consequence of consumer confidentiality, we need to advise that TTP Consulting is just not prepared to disclose customers’ fiscal private info with the public or media … with no consent of your client or even a lawful rationale.”
The company can be a “associate” of various condition entities, which include SARS as well as CIPC, according to its Web-site.
Neither of The 2 directors of Dzata Accountants, that are both detailed as inactive on the CIPC sign-up of companies, responded to emailed inquiries. The corporation has become deregistered via the CIPC for failing to submit monetary statements considering that 2021.
The only real director of Mageba Ntuli Investing and Consulting Company, Patrick Zulu, died a few decades back, according to official records. The organization was deregistered through the CIPC for failing to submit monetary statements because 2021.
Matamela Magodi, the sole director of Magodi Consultants, didn't respond to concerns emailed to him.
GroundUp was struggling to come across any listing for Tafta Consulting and Accounting Products and services Using the CIPC. We were being also not able to trace any of the company’s administrators to request comment.