The accountants who assisted loot the Lottery

The accountants who assisted loot the Lottery

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The Particular Investigating Device has determined five accounting firms that helped loot Lottery cash. Graphic: Lisa Nelson

The Distinctive Investigating Unit has determined five accounting and auditing firms that assisted non-gain firms loot Lottery dollars intended for “excellent triggers”.
The accounting firms compiled fraudulent financial statements employed by these corporations to submit an application for Lottery funding, the SIU instructed Parliament.
Acting Main nationwide investigations officer Zodwa Xesibe mentioned the SIU would consider motion to get these firms blacklisted.
A 4-12 months probe through the ตรวจ Distinctive Investigating Device (SIU) has exposed five accounting and auditing firms that assisted dodgy non-income firms loot countless countless rands intended for “superior triggers” within the Lottery.

These firms had been explained because of the SIU as “professional enablers,” who “compiled fraudulent economic statements” that were used by the companies to apply for Lottery funding.

The five organizations have been named in Parliament through 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 helped virtually 40 providers get their fingers on lottery funding, in accordance with the SIU presentation.

Based upon a tool that contains information with all lottery grants considering the fact that 2002, these businesses acquired around R314-million in funding.

“These NPCs were funded from the Nationwide Lotteries Fee (NLC) although the cash were not used for their intended goal,” Xesibe explained to Parliament’s Trade, Market and Competitors Portfolio Committee previous week.

The SIU, the Hawks plus the Countrywide Prosecuting Authority (NPA) had been in Parliament to report to the committee on development in bringing persons and organisations involved with looting the lottery to e-book.

Xesibe advised GroundUp that the SIU meant to lodge problems against the accounting corporations included and was checking if these firms had been registered and, If that is so, with which Experienced bodies.

“We want these businesses to become blacklisted,” she instructed GroundUp.

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

Nonetheless, being an ongoing six-yr investigation into lottery corruption by GroundUp has revealed, hijacked non-earnings organisations (NPOs) or new shelf non-gain corporations (NPCs) without having economical keep track of information ended up accustomed to make an application for funding.

In some instances, Nearly equivalent economical statements ended up manufactured for unrelated organisations, usually with only the names in the organisations modified, GroundUp’s investigation located.

Paperwork submitted by legitimate NPCs for unsuccessful grant purposes have been normally employed by new or hijacked NPCs and NPOs to make an application for funding. The details and paperwork of the unsuccessful applicants ended up supplied by senior Lottery officials into the dodgy applicants.

With cursory or - usually - no verification, these dodgy applicants have been awarded millions of rands in grants. At times further tranches of money have been paid out with out Considerably checking within the progress of projects.

The overwhelming majority of these grants were being built by using proactive funding, which was at the center in the looting from the lottery. Proactive funding authorized the Minister of Trade, Market and Competitiveness, or the NLC together with its board, to discover causes to fund without the need of initial necessitating an software. This was stopped any time a new NLC board was appointed.

R2-billion in grants below investigation
SIU head Advocate Andy Mothibi claimed the SIU was now investigating grants valued at more than R2-billion, as well as the unit was even now regularly receiving idea-offs about additional corruption.

He advised MPs that the SIU’s investigation were damaged into 3 phases: the primary, which has been finalised, probed dodgy grants amounting to R280-million, and the second, also completed, concerned R247-million. Within the 3rd stage, as a consequence of be finalised at the conclusion of the calendar year, the SIU is investigating grants valued at Just about R906-million, involving forty NPOs and NPCs, Mothibi mentioned.

He claimed that the SIU would implement “soon” to the Presidential Proclamation, at first granted in Oct 2020 to investigate corruption involving lottery grants, to get extended to include procurement because of the NLC.

The SIU investigation had up to now brought about 13 disciplinary referrals for the NLC, and administrative referrals to SARS and the businesses and Intellectual Properties Fee to blacklist people today implicated in the looting. Grievances involving two people today had been referred on the Authorized Apply Council and also the SA Institute of Chartered Accountants.

The SIU experienced observed quite a few developments underneath the prior NLC board and government - many of whom are actually implicated in looting - Mothibi informed MPs.

This included a “pattern of collusion involving NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “general maladministration from the acceptance of grants,” he reported.

Gradual development via the NPA
The SIU has frozen houses, Homes, autos along with other assets worth tens of millions which were purchased with lottery money, but MPs expressed concern at gradual development in prosecuting those linked to the looting. (The SIU is mandated only to Recuperate belongings bought with stolen point out cash and does not have prosecuting powers).

When the SIU has referred 15 matters into the NPA, thus far only two individuals have been introduced ahead of a court docket. Two Guys appeared in courtroom in Kimberley just lately in reference to misappropriated money collected for your venture to overcome gender-centered violence.

In August 2022 Christopher Tshivule was sentenced to 8 years in jail for his part inside of a R1.five-million lottery grant fraud. Costs towards two persons charged with him, who the SIU has described as “kingpins” within the corruption that confused the NLC, ended up dropped.

Key-Standard Mmeli Makinyane, the acting divisional commissioner for priority offences, told MPs which the Hawks had been at present investigating sixteen lottery corruption-relevant situations. Yet another 1 - the Kimberley make any difference - is just before a courtroom and two happen to be sent on the NPA for a decision to prosecute. A further 5 cases are increasingly being investigated via the SAPS detective and forensic services, he mentioned.

Describing The explanations for that delay in prosecutions, NPA Deputy National Director Rodney de Kock claimed Component of The explanation was which the Hawks had to do further investigations if they obtained dossiers from the SIU.

“In essence, the investigations undertaken by the SIU tend not to fulfill prison standards for prosecutions.”

As a result, the NPA had to work with investigators while in the DPCI (the Hawks) and SAPS to carry out legal investigations and be sure that the evidence fulfills legal prosecution specifications, he mentioned, including: “That said, the function on the SIU is significant and contributes considerably to this process.”

De Kock mentioned that the SIU’s investigation “normally ends in several referrals. The referrals may in the long run cause 1 docket and one courtroom circumstance.”

He explained that twelve issues, which can be “around eighty five% entire”, had been currently being jointly investigated because of the Hawks and the SIU’s Specialised Economic Operations Unit. (Most of these instances, seven of which ended up lodged in 2020, entail former NLC chief operating officer Phillemon Letwaba, who resigned below a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)

De Kock reported the NPA confronted many “issues” in prosecuting scenarios. These, he explained, incorporated

the lapse of your time concerning if the offences had been committed along with the issuing in the Presidential Proclamation on one November 2020;
“unavailability of witnesses and/or documentary proof” (Earlier this 12 months, the SIU told the committee that critical files necessary in certain prosecutions were deleted through the NLC Personal computer procedure or experienced gone lacking from Metrofile, a warehouse where by copies of files are archived and saved);
The truth that some implicated individuals are still utilized by NLC; and
A problem into the legality from the Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is committed to making sure finalisation in these issues. To this conclude, a workforce of committed prosecutors continues to be allotted to oversee all NLC issues at the moment below investigation,” de Kock reported. “Matters are taken care of as being a precedence. When [the] investigations are done, the NPA can make a choice.”

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

Aubrey Moeng, certainly one of TTP’s two directors, stated in an email in response to questions: “Because of consumer confidentiality, we desire to advise that TTP Consulting is not really prepared to divulge clientele’ economic confidential information with the general public or media … without the consent from the shopper or a authorized purpose.”

The organization is usually a “associate” of several condition entities, such as SARS as well as CIPC, In line with its Web-site.

Neither of The 2 administrators of Dzata Accountants, who will be the two stated as inactive over the CIPC sign up of providers, responded to emailed questions. The company has actually been deregistered via the CIPC for failing to post money statements since 2021.

The only director of Mageba Ntuli Trading and Consulting Services, Patrick Zulu, died a few several years in the past, Based on Formal records. The corporation was deregistered with the CIPC for failing to post monetary statements considering the fact that 2021.

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

GroundUp was struggling to discover any listing for Tafta Consulting and Accounting Products and services Together with the CIPC. We were being also unable to trace any of the company’s directors to request remark.

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