The accountants who served loot the Lottery

The accountants who served loot the Lottery

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The Unique Investigating Unit has recognized five accounting companies that served loot Lottery funds. Graphic: Lisa Nelson

The Distinctive Investigating Device has identified five accounting and auditing companies that helped non-profit corporations loot Lottery funds supposed for “very good brings about”.
The accounting corporations compiled fraudulent financial statements utilized by these corporations to submit an application for Lottery funding, the SIU told Parliament.
Acting Main nationwide investigations officer Zodwa Xesibe explained the SIU would just take motion to possess these companies blacklisted.
A 4-calendar year probe because of the ตรวจ สลาก Distinctive Investigating Unit (SIU) has exposed five accounting and auditing companies that served dodgy non-earnings providers loot numerous many rands designed for “good leads to” from the Lottery.

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

The 5 organizations were being named in Parliament via the SIU’s performing chief nationwide investigations officer Zodwa Xesibe. These are TTP Consulting, Dzata Accountants, Magodi Consulting, Mageba Ntuli Consulting and Tafta Consulting and Accounting Expert services.

Fraudulent financials produced by these five accounting companies assisted nearly 40 businesses get their arms on lottery funding, based on the SIU presentation.

According to a tool made up of knowledge with all lottery grants considering that 2002, these providers got over R314-million in funding.

“These NPCs were being funded through the Nationwide Lotteries Fee (NLC) but the money weren't made use of for his or her supposed intent,” Xesibe explained to Parliament’s Trade, Field and Opposition Portfolio Committee previous 7 days.

The SIU, the Hawks along with the Countrywide Prosecuting Authority (NPA) have been in Parliament to report to the committee on development in bringing men and women and organisations involved in looting the lottery to reserve.

Xesibe advised GroundUp that the SIU intended to lodge issues against the accounting firms included and was examining if these corporations were registered and, In that case, with which Specialist bodies.

“We would like these firms to generally be blacklisted,” she told GroundUp.

To qualify for Lottery funding, an organisation was required to develop two decades of once-a-year financial statements, Xesibe described in Parliament.

However, being an ongoing 6-12 months investigation into lottery corruption by GroundUp has disclosed, hijacked non-financial gain organisations (NPOs) or new shelf non-revenue companies (NPCs) without having fiscal monitor records ended up used to apply for funding.

In certain occasions, Virtually equivalent economic statements were being created for unrelated organisations, typically with only the names with the organisations modified, GroundUp’s investigation observed.

Documents submitted by legitimate NPCs for unsuccessful grant applications had been typically utilized by new or hijacked NPCs and NPOs to make an application for funding. The small print and documents with the unsuccessful applicants had been supplied by senior Lottery officials into the dodgy applicants.

With cursory or - generally - no verification, these dodgy applicants have been awarded numerous rands in grants. Sometimes more tranches of money were being paid out out without having A lot checking to the development of jobs.

The overwhelming majority of such grants ended up built by using proactive funding, which was at the center with the looting with the lottery. Proactive funding permitted the Minister of Trade, Business and Opposition, or the NLC at the side of its board, to discover leads to to fund devoid of initial demanding an software. This was stopped when a new NLC board was appointed.

R2-billion in grants beneath investigation
SIU head Advocate Andy Mothibi said the SIU was at present investigating grants valued at in excess of R2-billion, as well as device was still frequently getting tip-offs about much more corruption.

He informed MPs that the SIU’s investigation were damaged into three phases: the initial, which has been finalised, probed dodgy grants amounting to R280-million, and the 2nd, also accomplished, concerned R247-million. Within 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 said.

He explained that the SIU would use “before long” for your Presidential Proclamation, initially granted in Oct 2020 to analyze corruption involving lottery grants, to become extended to incorporate procurement via the NLC.

The SIU investigation had up to now resulted in 13 disciplinary referrals on the NLC, and administrative referrals to SARS and the businesses and Mental Houses Fee to blacklist men and women implicated from the looting. Issues involving two men and women had been referred towards the Legal Observe Council as well as SA Institute of Chartered Accountants.

The SIU experienced observed several tendencies under the former NLC board and government - many of whom are actually implicated in looting - Mothibi advised MPs.

This included a “craze of collusion between NLC officials and NPOs and NPCs”, “the hijacking of NPOs and NPCs” and “typical maladministration inside the acceptance of grants,” he reported.

Slow progress with the NPA
The SIU has frozen households, Qualities, vehicles and various belongings worth tens of millions that were acquired with lottery resources, but MPs expressed worry at sluggish progress in prosecuting those linked to the looting. (The SIU is mandated only to Get better property bought with stolen point out money and does not have prosecuting powers).

Though the SIU has referred 15 issues for the NPA, so far only two folks have been brought right before a court. Two Adult males appeared in courtroom in Kimberley recently in connection with misappropriated cash gathered to get a job to combat gender-based mostly violence.

In August 2022 Christopher Tshivule was sentenced to 8 decades in prison for his component in the R1.five-million lottery grant fraud. Rates against two individuals charged with him, who the SIU has described as “kingpins” within the corruption that overwhelmed the NLC, were dropped.

Significant-Common Mmeli Makinyane, the performing divisional commissioner for precedence offences, advised MPs that the Hawks were now investigating 16 lottery corruption-associated cases. A different one particular - the Kimberley make a difference - is right before a courtroom and two have been sent into the NPA for a decision to prosecute. An additional 5 instances are now being investigated via the SAPS detective and forensic providers, he claimed.

Conveying The explanations for the delay in prosecutions, NPA Deputy Nationwide Director Rodney de Kock reported Component of the reason was that the Hawks needed to do further investigations every time they received dossiers from your SIU.

“In essence, the investigations undertaken with the SIU tend not to satisfy criminal standards for prosecutions.”

Consequently, the NPA experienced to operate with investigators inside the DPCI (the Hawks) and SAPS to conduct felony investigations and be sure that the evidence meets felony prosecution criteria, he mentioned, adding: “That said, the do the job in the SIU is important and contributes drastically to this method.”

De Kock reported that the SIU’s investigation “usually ends in various referrals. The referrals could in the long run result in just one docket and one courtroom situation.”

He reported that twelve issues, that are “around 85% complete”, were being jointly investigated via the Hawks and the SIU’s Specialised Financial Operations Device. (Many of these instances, 7 of which were lodged in 2020, require former NLC chief functioning officer Phillemon Letwaba, who resigned beneath a cloud in 2022, and Pretoria law firm Leslie Ramulifho.)

De Kock explained the NPA confronted numerous “worries” in prosecuting situations. These, he reported, provided

the lapse of your time involving when the offences have been dedicated and the issuing in the Presidential Proclamation on 1 November 2020;
“unavailability of witnesses and/or documentary evidence” (Earlier this year, the SIU informed the committee that essential paperwork desired in certain prosecutions were deleted through the NLC Computer system system or experienced gone lacking from Metrofile, a warehouse in which copies of files are archived and stored);
the fact that some implicated people today remain utilized by NLC; and
A challenge towards the legality of your Presidential Proclamation by former NLC chairperson Alfred Nevhutanda.
“The NPA is devoted to guaranteeing finalisation in these issues. To this finish, a workforce of dedicated prosecutors has long been allocated to oversee all NLC matters presently beneath investigation,” de Kock reported. “Matters are dealt with for a precedence. Once [the] investigations are concluded, the NPA is likely to make a call.”

What the businesses say (or don’t)
GroundUp was only in a position to get remark from one of many five businesses accused from the SIU in Parliament of producing fraudulent once-a-year economical statements,TTP Consulting.

Aubrey Moeng, considered one of TTP’s two directors, stated within an e-mail in reaction to inquiries: “On account of consumer confidentiality, we need to suggest that TTP Consulting is just not willing to disclose customers’ economical confidential information with the public or media … without the consent on the client or maybe a lawful reason.”

The organization is often a “husband or wife” of a number of point out entities, together with SARS as well as CIPC, In keeping with its Web-site.

Neither of The 2 directors of Dzata Accountants, who will be both mentioned as inactive about the CIPC register of companies, responded to emailed issues. The business has long been deregistered from the CIPC for failing to post money statements considering that 2021.

The only real director of Mageba Ntuli Investing and Consulting Support, Patrick Zulu, died 3 yrs ago, As outlined by official information. The corporation was deregistered through the CIPC for failing to submit economic statements due to the fact 2021.

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

GroundUp was not able to locate any listing for Tafta Consulting and Accounting Companies with the CIPC. We were being also not able to trace any of the organization’s administrators to request comment.