The Special Investigating Device has recognized five accounting firms that assisted loot Lottery money. Graphic: Lisa Nelson
The Particular Investigating Unit has identified 5 accounting and auditing companies that helped non-earnings firms loot Lottery funds supposed for “fantastic leads to”.
The accounting corporations compiled fraudulent economical statements used by these corporations to apply for Lottery funding, the SIU informed Parliament.
Acting chief national investigations officer Zodwa Xesibe stated the SIU would get action to own these companies blacklisted.
A 4-calendar year probe by the hihuay Unique Investigating Unit (SIU) has exposed five accounting and auditing companies that aided dodgy non-financial gain businesses loot numerous an incredible number of rands intended for “very good causes” from your Lottery.
These firms were being described with the SIU as “Skilled enablers,” who “compiled fraudulent fiscal statements” which were utilized by the businesses to make an application for Lottery funding.
The 5 firms were named in Parliament via the SIU’s acting Main national investigations officer Zodwa Xesibe. They are really TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Companies.
Fraudulent financials made by these five accounting firms helped just about forty businesses get their palms on lottery funding, in accordance with the SIU presentation.
According to a Instrument containing information with all lottery grants considering that 2002, these providers acquired over R314-million in funding.
“These NPCs had been funded because of the Countrywide Lotteries Fee (NLC) but the resources were not utilized for his or her intended purpose,” Xesibe explained to Parliament’s Trade, Sector and Competitiveness Portfolio Committee final week.
The SIU, the Hawks as well as the National Prosecuting Authority (NPA) had been in Parliament to report to the committee on development in bringing folks and organisations involved in looting the lottery to reserve.
Xesibe advised GroundUp that the SIU meant to lodge issues in opposition to the accounting corporations associated and was checking if these companies had been registered and, If that is so, with which Skilled bodies.
“We wish these companies for being blacklisted,” she instructed GroundUp.
To qualify for Lottery funding, an organisation was needed to create two several years of once-a-year fiscal statements, Xesibe stated in Parliament.
Nevertheless, as an ongoing 6-yr investigation into lottery corruption by GroundUp has unveiled, hijacked non-financial gain organisations (NPOs) or new shelf non-gain organizations (NPCs) with no financial keep track of data were utilized to apply for funding.
In a few scenarios, Practically equivalent economic statements had been produced for unrelated organisations, normally with only the names of the organisations transformed, GroundUp’s investigation discovered.
Paperwork submitted by real NPCs for unsuccessful grant programs ended up generally used by new or hijacked NPCs and NPOs to submit an application for funding. The main points and files with the unsuccessful applicants ended up provided by senior Lottery officers on the dodgy applicants.
With cursory or - typically - no verification, these dodgy applicants have been awarded an incredible number of rands in grants. Often further tranches of funds have been paid out out without Considerably examining to the development of jobs.
The vast majority of these grants ended up produced through proactive funding, which was at the guts in the looting on the lottery. Proactive funding authorized the Minister of Trade, Business and Competitiveness, or maybe the NLC together with its board, to discover will cause to fund devoid of to start with necessitating an application. This was stopped any time a new NLC board was appointed.
R2-billion in grants underneath investigation
SIU head Advocate Andy Mothibi mentioned the SIU was currently investigating grants valued at about R2-billion, and also the device was still on a regular basis receiving tip-offs about additional corruption.
He instructed MPs the SIU’s investigation had been damaged into a few phases: the main, that has been finalised, probed dodgy grants amounting to R280-million, and the next, also completed, associated R247-million. From the third phase, due to be finalised at the conclusion of the year, the SIU is investigating grants valued at Just about R906-million, involving 40 NPOs and NPCs, Mothibi said.
He claimed that the SIU would implement “soon” for that Presidential Proclamation, originally granted in October 2020 to analyze corruption involving lottery grants, for being prolonged to incorporate procurement from the NLC.
The SIU investigation had to this point resulted in thirteen disciplinary referrals to the NLC, and administrative referrals to SARS and the Companies and Intellectual Homes Commission to blacklist persons implicated during the looting. Problems involving two individuals had been referred on the Lawful Exercise Council and the SA Institute of Chartered Accountants.
The SIU experienced noticed various tendencies beneath the earlier NLC board and government - many of whom have already been implicated in looting - Mothibi informed MPs.
This integrated a “trend of collusion concerning NLC officers and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “common maladministration from the approval of grants,” he claimed.
Slow progress via the NPA
The SIU has frozen properties, Houses, vehicles and other assets well worth tens of millions that were bought with lottery funds, but MPs expressed issue at gradual development in prosecuting All those involved with the looting. (The SIU is mandated only to Get well assets acquired with stolen condition money and does not have prosecuting powers).
Though the SIU has referred 15 issues to your NPA, to date only two people have been introduced prior to a court docket. Two Guys appeared in court docket in Kimberley a short while ago in connection with misappropriated resources collected for just a undertaking to combat gender-based mostly violence.
In August 2022 Christopher Tshivule was sentenced to 8 years in prison for his aspect inside a R1.five-million lottery grant fraud. Charges from two people charged with him, who the SIU has referred to as “kingpins” in the corruption that confused the NLC, were dropped.
Main-Basic Mmeli Makinyane, the acting divisional commissioner for priority offences, told MPs which the Hawks were being currently investigating sixteen lottery corruption-related cases. A further one - the Kimberley make any difference - is in advance of a court and two have been despatched towards the NPA for a call to prosecute. A further 5 circumstances are increasingly being investigated with the SAPS detective and forensic solutions, he claimed.
Describing the reasons with the hold off in prosecutions, NPA Deputy Countrywide Director Rodney de Kock stated Section of The key reason why was which the Hawks needed to do additional investigations after they obtained dossiers through the SIU.
“In essence, the investigations carried out via the SIU never satisfy criminal benchmarks for prosecutions.”
Thus, the NPA had to operate with investigators within the DPCI (the Hawks) and SAPS to perform criminal investigations and make sure the evidence satisfies criminal prosecution criteria, he said, including: “Having said that, the function with the SIU is essential and contributes considerably to this method.”
De Kock reported which the SIU’s investigation “often results in numerous referrals. The referrals may possibly in the long run bring about one docket and 1 court circumstance.”
He reported that twelve matters, which can be “around eighty five% finish”, have been becoming jointly investigated by the Hawks and the SIU’s Specialised Financial Operations Device. (A large number of scenarios, seven of which ended up lodged in 2020, include previous NLC Main working officer Phillemon Letwaba, who resigned less than a cloud in 2022, and Pretoria lawyer Leslie Ramulifho.)
De Kock mentioned the NPA confronted a number of “issues” in prosecuting instances. These, he explained, bundled
the lapse of your time between when the offences had been dedicated along with the issuing with the Presidential Proclamation on one November 2020;
“unavailability of witnesses and/or documentary proof” (Earlier this yr, the SIU informed the committee that crucial documents needed in certain prosecutions had been deleted from your NLC Laptop program or had long gone missing from Metrofile, a warehouse in which copies of files are archived and stored);
the fact that some implicated individuals are still used by NLC; and
A problem to your legality in the Presidential Proclamation by previous NLC chairperson Alfred Nevhutanda.
“The NPA is dedicated to making sure finalisation in these matters. To this conclude, a crew of dedicated prosecutors has actually been allotted to supervise all NLC issues currently below investigation,” de Kock explained. “Matters are dealt with for a priority. After [the] investigations are concluded, the NPA is likely to make a choice.”
What the companies say (or don’t)
GroundUp was only capable to get comment from one of several five businesses accused from the SIU in Parliament of manufacturing fraudulent annual financial statements,TTP Consulting.
Aubrey Moeng, considered one of TTP’s two directors, stated within an e-mail in reaction to concerns: “Because of shopper confidentiality, we desire to suggest that TTP Consulting isn't prepared to disclose customers’ fiscal private information and facts with the general public or media … with no consent of the customer or perhaps a authorized motive.”
The corporation is a “companion” of several condition entities, together with SARS and the CIPC, In accordance with its Web-site.
Neither of The 2 administrators of Dzata Accountants, who're the two listed as inactive over the CIPC sign-up of companies, responded to emailed issues. The organization has long been deregistered with the CIPC for failing to post economical statements considering that 2021.
The only real director of Mageba Ntuli Investing and Consulting Support, Patrick Zulu, died a few many years in the past, As outlined by Formal information. The business was deregistered with the CIPC for failing to submit economic statements given that 2021.
Matamela Magodi, the sole director of Magodi Consultants, didn't respond to questions emailed to him.
GroundUp was not able to locate any listing for Tafta Consulting and Accounting Providers With all the CIPC. We had been also struggling to trace any of the business’s administrators to ask for remark.