The accountants who assisted loot the Lottery

The accountants who assisted loot the Lottery

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The Specific Investigating Unit has recognized 5 accounting corporations that helped loot Lottery funds. Graphic: Lisa Nelson

The Particular Investigating Device has determined five accounting and auditing companies that helped non-earnings businesses loot Lottery revenue supposed for “excellent brings about”.
The accounting corporations compiled fraudulent money statements employed by these corporations to make an application for Lottery funding, the SIU informed Parliament.
Acting Main national investigations officer Zodwa Xesibe mentioned the SIU would acquire action to obtain these firms blacklisted.
A 4-year probe by the ruay Distinctive Investigating Unit (SIU) has exposed five accounting and auditing companies that aided dodgy non-gain firms loot many countless rands meant for “very good will cause” from the Lottery.

These firms have been described with the SIU as “Qualified enablers,” who “compiled fraudulent monetary statements” which were used by the businesses to apply for Lottery funding.

The 5 corporations have been named in Parliament by the SIU’s performing Main national investigations officer Zodwa Xesibe. They can be TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Expert services.

Fraudulent financials made by these five accounting companies served just about 40 companies get their arms on lottery funding, based on the SIU presentation.

Dependant on a Software that contains facts with all lottery grants because 2002, these organizations received above R314-million in funding.

“These NPCs were being funded by the National Lotteries Fee (NLC) but the money weren't utilised for their supposed goal,” Xesibe informed Parliament’s Trade, Business and Opposition Portfolio Committee final 7 days.

The SIU, the Hawks as well as National Prosecuting Authority (NPA) were in Parliament to report to the committee on development in bringing individuals and organisations associated with looting the lottery to guide.

Xesibe advised GroundUp the SIU meant to lodge problems versus the accounting firms involved and was examining if these companies ended up registered and, if so, with which Expert bodies.

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

To qualify for Lottery funding, an organisation was necessary to make two a long time of yearly economic statements, Xesibe explained in Parliament.

Nonetheless, being an ongoing six-year investigation into lottery corruption by GroundUp has revealed, hijacked non-revenue organisations (NPOs) or new shelf non-financial gain businesses (NPCs) without having financial monitor information had been used to apply for funding.

In certain occasions, Pretty much similar economical statements ended up made for unrelated organisations, frequently with just the names of your organisations adjusted, GroundUp’s investigation located.

Documents submitted by authentic NPCs for unsuccessful grant applications have been usually employed by new or hijacked NPCs and NPOs to make an application for funding. The small print and files from the unsuccessful applicants ended up equipped by senior Lottery officers towards the dodgy applicants.

With cursory or - usually - no verification, these dodgy applicants ended up awarded an incredible number of rands in grants. Occasionally further tranches of money have been paid out out with no Considerably checking on the development of initiatives.

The vast majority of such grants had been made by means of proactive funding, which was at the heart on the looting from the lottery. Proactive funding permitted the Minister of Trade, Field and Levels of competition, or the NLC along side its board, to identify triggers to fund devoid of to start with demanding an software. This was stopped every time a new NLC board was appointed.

R2-billion in grants underneath investigation
SIU head Advocate Andy Mothibi claimed the SIU was at this time investigating grants valued at around R2-billion, as well as the unit was nonetheless frequently acquiring suggestion-offs about much more corruption.

He told MPs which the SIU’s investigation had been damaged into three phases: the initial, which has been finalised, probed dodgy grants amounting to R280-million, and the next, also finished, involved R247-million. In the 3rd phase, because of be finalised at the conclusion of the calendar year, the SIU is investigating grants valued at Virtually R906-million, involving forty NPOs and NPCs, Mothibi mentioned.

He reported which the SIU would use “quickly” for that Presidential Proclamation, at first granted in Oct 2020 to analyze corruption involving lottery grants, to become extended to include procurement through the NLC.

The SIU investigation had thus far brought about 13 disciplinary referrals for the NLC, and administrative referrals to SARS and the Companies and Intellectual Attributes Commission to blacklist folks implicated within the looting. Problems involving two persons had been referred towards the Lawful Exercise Council along with the SA Institute of Chartered Accountants.

The SIU experienced observed a number of tendencies under the past NLC board and executive - a lot of whom happen to be implicated in looting - Mothibi advised MPs.

This included a “trend of collusion concerning NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “normal maladministration in the acceptance of grants,” he said.

Slow development by the NPA
The SIU has frozen houses, properties, vehicles and other belongings worth tens of millions which were bought with lottery resources, but MPs expressed problem at slow development in prosecuting People involved in the looting. (The SIU is mandated only to Get better property bought with stolen point out cash and doesn't have prosecuting powers).

When the SIU has referred 15 issues to the NPA, to date only two people have been brought in advance of a court docket. Two Males appeared in courtroom in Kimberley not long ago in reference to misappropriated resources collected for any challenge to beat gender-centered violence.

In August 2022 Christopher Tshivule was sentenced to 8 decades in jail for his aspect in a very R1.five-million lottery grant fraud. Costs in opposition to two people today billed with him, who the SIU has referred to as “kingpins” while in the corruption that overcome the NLC, had been dropped.

Key-Basic Mmeli Makinyane, the acting divisional commissioner for precedence offences, instructed MPs that the Hawks were presently investigating sixteen lottery corruption-relevant circumstances. Yet another one - the Kimberley subject - is ahead of a court docket and two are already despatched into the NPA for a decision to prosecute. An extra 5 conditions are being investigated because of the SAPS detective and forensic solutions, he mentioned.

Detailing the reasons to the delay in prosecutions, NPA Deputy National Director Rodney de Kock stated Portion of The explanation was that the Hawks needed to do even more investigations if they gained dossiers within the SIU.

“In essence, the investigations carried out because of the SIU tend not to satisfy felony criteria for prosecutions.”

Thus, the NPA had to work with investigators in the DPCI (the Hawks) and SAPS to perform legal investigations and make sure that the evidence fulfills legal prosecution benchmarks, he claimed, introducing: “That said, the get the job done of the SIU is vital and contributes enormously to this process.”

De Kock mentioned that the SIU’s investigation “typically ends in many referrals. The referrals may perhaps finally result in 1 docket and 1 court docket situation.”

He said that twelve matters, which might be “approximately eighty five% total”, were staying jointly investigated with the Hawks and also the SIU’s Specialised Financial Functions Unit. (A large number of instances, seven of which were lodged in 2020, require previous NLC Main operating officer Phillemon Letwaba, who resigned below a cloud in 2022, and Pretoria attorney Leslie Ramulifho.)

De Kock reported the NPA confronted various “troubles” in prosecuting conditions. These, he reported, included

the lapse of your time between when the offences were fully commited as well as issuing of your Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Previously this yr, the SIU informed the committee that vital documents necessary in certain prosecutions had been deleted from the NLC computer process or experienced gone lacking from Metrofile, a warehouse exactly where copies of paperwork are archived and saved);
The truth that some implicated folks remain used by NLC; and
A obstacle for the legality with the Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to guaranteeing finalisation in these issues. To this end, a group of devoted prosecutors has become allocated to supervise all NLC issues currently underneath investigation,” de Kock explained. “Issues are handled to be a priority. At the time [the] investigations are done, the NPA can make a call.”

What the companies say (or don’t)
GroundUp was only in the position to get comment from among the five companies accused with the SIU in Parliament of producing fraudulent annual fiscal statements,TTP Consulting.

Aubrey Moeng, one of TTP’s two directors, mentioned in an e mail in response to thoughts: “Because of client confidentiality, we want to advise that TTP Consulting isn't willing to disclose clientele’ monetary private information and facts with the general public or media … with no consent from the shopper or simply a authorized cause.”

The organization is a “lover” of many point out entities, including SARS along with the CIPC, In line with its Web site.

Neither of the two directors of Dzata Accountants, that are both shown as inactive over the CIPC sign up of providers, responded to emailed questions. The company continues to be deregistered by the CIPC for failing to post economic statements considering that 2021.

The only real director of Mageba Ntuli Buying and selling and Consulting Company, Patrick Zulu, died three yrs ago, In keeping with Formal information. The corporate was deregistered by the CIPC for failing to submit economic statements due to the fact 2021.

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

GroundUp was not able to uncover any listing for Tafta Consulting and Accounting Products and services with the CIPC. We were being also struggling to trace any of the corporate’s directors to request comment.

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