The accountants who aided loot the Lottery

The accountants who aided loot the Lottery

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The Distinctive Investigating Device has discovered five accounting firms that served loot Lottery money. Graphic: Lisa Nelson

The Unique Investigating Device has discovered 5 accounting and auditing firms that assisted non-revenue organizations loot Lottery money intended for “very good causes”.
The accounting companies compiled fraudulent financial statements used by these organizations to make an application for Lottery funding, the SIU informed Parliament.
Performing chief national investigations officer Zodwa Xesibe explained the SIU would acquire motion to get these firms blacklisted.
A 4-12 months probe with the ตรวจ Exclusive Investigating Device (SIU) has exposed 5 accounting and auditing firms that served dodgy non-financial gain organizations loot many hundreds of many rands intended for “fantastic causes” with the Lottery.

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

The five corporations were being named in Parliament through the SIU’s acting Main nationwide investigations officer Zodwa Xesibe. These are TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Providers.

Fraudulent financials produced by these five accounting corporations assisted virtually 40 providers get their hands on lottery funding, according to the SIU presentation.

Determined by a Resource containing knowledge with all lottery grants considering that 2002, these corporations bought around R314-million in funding.

“These NPCs were funded from the National Lotteries Commission (NLC) even so the money were not used for their intended function,” Xesibe advised Parliament’s Trade, Business and Opposition Portfolio Committee last 7 days.

The SIU, the Hawks as well as Countrywide Prosecuting Authority (NPA) ended up in Parliament to report to the committee on development in bringing individuals and organisations linked to looting the lottery to book.

Xesibe told GroundUp the SIU intended to lodge grievances towards the accounting firms concerned and was examining if these firms had been registered and, If that is so, with which Expert bodies.

“We want these corporations to generally be blacklisted,” she instructed GroundUp.

To qualify for Lottery funding, an organisation was required to develop two years of yearly money statements, Xesibe defined in Parliament.

Having said that, being an ongoing 6-calendar year investigation into lottery corruption by GroundUp has exposed, hijacked non-earnings organisations (NPOs) or new shelf non-income corporations (NPCs) without having economical keep track of documents were being accustomed to apply for funding.

In some instances, Pretty much similar monetary statements ended up made for unrelated organisations, usually with just the names on the organisations modified, GroundUp’s investigation found.

Paperwork submitted by real NPCs for unsuccessful grant applications ended up typically used by new or hijacked NPCs and NPOs to submit an application for funding. The small print and files of your unsuccessful applicants had been provided by senior Lottery officers to your dodgy applicants.

With cursory or - generally - no verification, these dodgy applicants were awarded an incredible number of rands in grants. In some cases added tranches of money were compensated out without having A lot examining on the progress of jobs.

The vast majority of those grants ended up created by using proactive funding, which was at the heart with the looting on the lottery. Proactive funding permitted the Minister of Trade, Industry and Opposition, or maybe the NLC together with its board, to establish triggers to fund without to start with demanding an software. This was stopped when a new NLC board was appointed.

R2-billion in grants below investigation
SIU head Advocate Andy Mothibi mentioned the SIU was at present investigating grants valued at above R2-billion, as well as the device was continue to regularly receiving suggestion-offs about a lot more corruption.

He advised MPs that the SIU’s investigation had been damaged into 3 phases: the first, which has been finalised, probed dodgy grants amounting to R280-million, and the second, also accomplished, associated R247-million. From the third period, on account of be finalised at the conclusion of the year, the SIU is investigating grants valued at Virtually R906-million, involving forty NPOs and NPCs, Mothibi said.

He stated the SIU would utilize “before long” for the Presidential Proclamation, originally granted in October 2020 to analyze corruption involving lottery grants, to be extended to include procurement through the NLC.

The SIU investigation had to date triggered 13 disciplinary referrals on the NLC, and administrative referrals to SARS and the Companies and Mental Attributes Fee to blacklist men and women implicated inside the looting. Grievances involving two people were referred for the Legal Observe Council plus the SA Institute of Chartered Accountants.

The SIU had observed various trends under the preceding NLC board and govt - most of whom are implicated in looting - Mothibi told MPs.

This bundled a “pattern of collusion between NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “normal maladministration within the approval of grants,” he explained.

Gradual development with the NPA
The SIU has frozen residences, Houses, cars and trucks as well as other belongings truly worth tens of millions which were bought with lottery cash, but MPs expressed concern at sluggish development in prosecuting All those associated with the looting. (The SIU is mandated only to Get better assets bought with stolen condition cash and doesn't have prosecuting powers).

Whilst the SIU has referred fifteen issues to the NPA, up to now only two individuals have been brought right before a court docket. Two Adult males appeared in court docket in Kimberley lately in connection with misappropriated resources gathered for just a challenge to beat gender-based violence.

In August 2022 Christopher Tshivule was sentenced to eight many years in jail for his aspect in a very R1.5-million lottery grant fraud. Costs towards two men and women charged with him, who the SIU has referred to as “kingpins” inside the corruption that confused the NLC, have been dropped.

Key-General Mmeli Makinyane, the performing divisional commissioner for precedence offences, advised MPs the Hawks ended up currently investigating 16 lottery corruption-connected cases. A different 1 - the Kimberley make any difference - is just before a court docket and two are sent for the NPA for a choice to prosecute. An additional five conditions are being investigated because of the SAPS detective and forensic solutions, he reported.

Detailing the reasons for the hold off in prosecutions, NPA Deputy Countrywide Director Rodney de Kock said Portion of The main reason was that the Hawks needed to do additional investigations when they been given dossiers through the SIU.

“In essence, the investigations undertaken because of the SIU tend not to fulfill criminal standards for prosecutions.”

Thus, the NPA had to operate with investigators within the DPCI (the Hawks) and SAPS to conduct criminal investigations and ensure that the proof satisfies criminal prosecution criteria, he said, adding: “Having said that, the function in the SIU is important and contributes significantly to this process.”

De Kock mentioned that the SIU’s investigation “frequently results in several referrals. The referrals could in the end lead to 1 docket and a person courtroom circumstance.”

He mentioned that 12 issues, which can be “approximately eighty five% complete”, were being getting jointly investigated because of the Hawks and also the SIU’s Specialised Economic Operations Unit. (The majority of these conditions, 7 of which had been lodged in 2020, contain former NLC chief operating officer Phillemon Letwaba, who resigned underneath a cloud in 2022, and Pretoria law firm Leslie Ramulifho.)

De Kock reported the NPA confronted various “worries” in prosecuting instances. These, he stated, included

the lapse of your time concerning when the offences were fully commited as well as issuing with the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Earlier this 12 months, the SIU advised the committee that key paperwork wanted in some prosecutions had been deleted within the NLC Computer system system or experienced absent lacking from Metrofile, a warehouse where copies of documents are archived and stored);
The point that some implicated men and women remain utilized by NLC; and
A challenge on the legality on the Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is committed to ensuring finalisation in these issues. To this conclusion, a staff of committed prosecutors has actually been allocated to oversee all NLC issues at the moment below investigation,” de Kock said. “Issues are handled for a priority. The moment [the] investigations are finished, the NPA could make a decision.”

What the companies say (or don’t)
GroundUp was only ready to get comment from on the list of 5 businesses accused through the SIU in Parliament of producing fraudulent annual economic statements,TTP Consulting.

Aubrey Moeng, considered one of TTP’s two administrators, claimed within an e mail in response to concerns: “As a result of consumer confidentiality, we want to recommend that TTP Consulting will not be willing to disclose consumers’ monetary private details with the general public or media … without the consent with the client or possibly a lawful cause.”

The corporate is really a “associate” of quite a few state entities, which includes SARS plus the CIPC, according to its Site.

Neither of the two directors of Dzata Accountants, who are both outlined as inactive within the CIPC register of businesses, responded to emailed questions. The company has long been deregistered via the CIPC for failing to submit financial statements considering the fact that 2021.

The only director of Mageba Ntuli Investing and Consulting Support, Patrick Zulu, died a few many years back, Based on official documents. The organization was deregistered because of the CIPC for failing to post monetary statements considering that 2021.

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

GroundUp was unable to find any listing for Tafta Consulting and Accounting Companies Along with the CIPC. We were being also struggling to trace any of the corporate’s directors to request remark.

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