The accountants who assisted loot the Lottery

The accountants who assisted loot the Lottery

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The Special Investigating Unit has identified 5 accounting firms that helped loot Lottery money. Graphic: Lisa Nelson

The Exclusive Investigating Unit has discovered five accounting and auditing firms that served non-income firms loot Lottery cash intended for “good triggers”.
The accounting corporations compiled fraudulent fiscal statements employed by these companies to apply for Lottery funding, the SIU instructed Parliament.
Performing chief national investigations officer Zodwa Xesibe stated the SIU would consider motion to own these firms blacklisted.
A 4-yr probe from the ตรวจ Special Investigating Device (SIU) has uncovered five accounting and auditing firms that served dodgy non-gain providers loot hundreds of millions of rands intended for “excellent leads to” from the Lottery.

These companies were described by the SIU as “Qualified enablers,” who “compiled fraudulent monetary statements” which were employed by the companies to make an application for Lottery funding.

The 5 companies had been named in Parliament because of the SIU’s performing Main countrywide investigations officer Zodwa Xesibe. They're TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Expert services.

Fraudulent financials made by these five accounting firms assisted practically 40 businesses get their hands on lottery funding, according to the SIU presentation.

Dependant on a Software that contains info with all lottery grants considering that 2002, these organizations got around R314-million in funding.

“These NPCs have been funded from the Countrywide Lotteries Commission (NLC) even so the funds were not made use of for their intended reason,” Xesibe informed Parliament’s Trade, Sector and Competitors Portfolio Committee previous 7 days.

The SIU, the Hawks as well as National Prosecuting Authority (NPA) had been in Parliament to report to the committee on progress in bringing individuals and organisations involved in looting the lottery to guide.

Xesibe informed GroundUp that the SIU meant to lodge issues from the accounting firms involved and was examining if these companies had been registered and, if so, with which Experienced bodies.

“We would like these businesses to generally be blacklisted,” she instructed GroundUp.

To qualify for Lottery funding, an organisation was required to make two many years of once-a-year monetary statements, Xesibe spelled out in Parliament.

Nonetheless, as an ongoing 6-calendar year investigation into lottery corruption by GroundUp has exposed, hijacked non-income organisations (NPOs) or new shelf non-profit businesses (NPCs) without any fiscal observe data ended up accustomed to make an application for funding.

In a few circumstances, Practically identical financial statements were being manufactured for unrelated organisations, normally with only the names of the organisations improved, GroundUp’s investigation observed.

Documents submitted by legitimate NPCs for unsuccessful grant programs were being typically employed by new or hijacked NPCs and NPOs to make an application for funding. The main points and documents in the unsuccessful applicants were being supplied by senior Lottery officials on the dodgy applicants.

With cursory or - normally - no verification, these dodgy applicants were awarded an incredible number of rands in grants. In some cases additional tranches of funds were paid out with out Significantly checking on the development of jobs.

The vast majority of these grants were built by means of proactive funding, which was at the center from the looting of your lottery. Proactive funding permitted the Minister of Trade, Industry and Competition, or perhaps the NLC together with its board, to detect triggers to fund without the need of very first demanding an software. This was stopped when a new NLC board was appointed.

R2-billion in grants beneath investigation
SIU head Advocate Andy Mothibi reported the SIU was presently investigating grants valued at in excess of R2-billion, plus the device was continue to consistently acquiring idea-offs about extra corruption.

He explained to MPs which the SIU’s investigation had been damaged into 3 phases: the primary, which has been finalised, probed dodgy grants amounting to R280-million, and the second, also done, included R247-million. Inside the 3rd stage, because of be finalised at the conclusion of the yr, the SIU is investigating grants valued at almost R906-million, involving 40 NPOs and NPCs, Mothibi claimed.

He mentioned which the SIU would apply “quickly” with the Presidential Proclamation, originally granted in October 2020 to research corruption involving lottery grants, to generally be prolonged to include procurement through the NLC.

The SIU investigation had to date brought about thirteen disciplinary referrals to your NLC, and administrative referrals to SARS and the businesses and Mental Attributes Fee to blacklist people today implicated during the looting. Problems involving two people today were referred on the Legal Practice Council and the SA Institute of Chartered Accountants.

The SIU experienced observed quite a few tendencies under the former NLC board and government - most of whom are implicated in looting - Mothibi informed MPs.

This included a “pattern of collusion between NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “standard maladministration in the approval of grants,” he explained.

Gradual development by the NPA
The SIU has frozen houses, Homes, autos as well as other assets well worth tens of hundreds of thousands that were bought with lottery resources, but MPs expressed worry at sluggish progress in prosecuting All those involved with the looting. (The SIU is mandated only to recover assets bought with stolen state cash and doesn't have prosecuting powers).

While the SIU has referred 15 matters for the NPA, so far only two people have been introduced in advance of a court. Two Guys appeared in court in Kimberley a short while ago in connection with misappropriated funds gathered to get a job to overcome gender-centered violence.

In August 2022 Christopher Tshivule was sentenced to eight several years in jail for his component in a very R1.five-million lottery grant fraud. Charges versus two men and women billed with him, who the SIU has called “kingpins” while in the corruption that confused the NLC, were being dropped.

Significant-Common Mmeli Makinyane, the acting divisional commissioner for precedence offences, explained to MPs the Hawks ended up at the moment investigating 16 lottery corruption-related instances. Another a person - the Kimberley subject - is just before a court docket and two are sent to your NPA for a decision to prosecute. An additional 5 instances are now being investigated by the SAPS detective and forensic companies, he reported.

Describing the reasons to the hold off in prosecutions, NPA Deputy Nationwide Director Rodney de Kock claimed Element of The main reason was that the Hawks needed to do further more investigations when they been given dossiers in the SIU.

“In essence, the investigations undertaken by the SIU don't satisfy prison criteria for prosecutions.”

Thus, the NPA had to operate with investigators while in the DPCI (the Hawks) and SAPS to conduct prison investigations and make sure the evidence satisfies criminal prosecution criteria, he stated, incorporating: “Having said that, the function with the SIU is essential and contributes drastically to this method.”

De Kock reported which the SIU’s investigation “often results in numerous referrals. The referrals could eventually cause one particular docket and one particular court case.”

He said that twelve matters, that are “roughly eighty five% comprehensive”, had been being jointly investigated via the Hawks as well as SIU’s Specialised Economic Functions Device. (The majority of these situations, 7 of which had been lodged in 2020, require previous NLC Main working officer Phillemon Letwaba, who resigned beneath a cloud in 2022, and Pretoria law firm Leslie Ramulifho.)

De Kock said the NPA faced various “worries” in prosecuting circumstances. These, he explained, involved

the lapse of your time involving if the offences ended up fully commited plus the issuing with the Presidential Proclamation on one November 2020;
“unavailability of witnesses and/or documentary evidence” (Before this 12 months, the SIU advised the committee that crucial documents desired in a few prosecutions had been deleted from the NLC computer procedure or had long gone missing from Metrofile, a warehouse where by copies of paperwork are archived and saved);
The reality that some implicated folks remain employed by NLC; and
A challenge on the legality of your Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is committed to ensuring finalisation in these matters. To this stop, a crew of committed prosecutors has actually been allotted to supervise all NLC matters at present below investigation,” de Kock mentioned. “Matters are handled for a priority. At the time [the] investigations are accomplished, the NPA will make a choice.”

What the businesses say (or don’t)
GroundUp was only capable to get remark from one of many 5 companies accused with the SIU in Parliament of manufacturing fraudulent once-a-year financial statements,TTP Consulting.

Aubrey Moeng, one among TTP’s two administrators, claimed within an e mail in reaction to issues: “Due to client confidentiality, we wish to recommend that TTP Consulting is not really prepared to divulge consumers’ economic confidential information with the general public or media … without the consent of the customer or possibly a legal motive.”

The business is really a “husband or wife” of many point out entities, like SARS and also the CIPC, As outlined by its Web site.

Neither of the two administrators of Dzata Accountants, who will be each shown as inactive over the CIPC register of organizations, responded to emailed inquiries. The corporate has long been deregistered by the CIPC for failing to post economical statements because 2021.

The only real director of Mageba Ntuli Investing and Consulting Assistance, Patrick Zulu, died 3 many years back, As outlined by official documents. The corporate was deregistered with the CIPC for failing to post fiscal statements given that 2021.

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

GroundUp was not able to obtain any listing for Tafta Consulting and Accounting Companies with the CIPC. We had been also not able to trace any of the corporation’s administrators to request remark.