THE Special Investigating Unit (SIU) is on the brink of solving a R1.4 billion case involving the National Lotteries Commission (NLC), now described as a “criminal enterprise”.

Three years ago, the unit was tasked, under Proclamation 32 of 2020 - signed by President Cyril Ramaphosa - to investigate the fraudulent conduct of the entity.

The unit reported on Thursday that they had completed 90% of phase two in the investigation which is worth R1.4 billion lost to the government and the commission.

Some of those who have been subject of the investigations are former Hawks spokesperson Hangwani Mulaudzi, pitting him against his former colleagues.

This week, it was reported that the Hawks had completed an investigation into a multimillion-rand grant made to a foundation that belonged to Mulaudzi.

Other high-profile subjects into the investigations include artist and businessman Arthur Mafokate and actress Terry Pheto, who won an Oscar for the movie, ‘Tsotsi’, and fashion designer Thula Sindi.

The investigation consists of three phases including the first phase which added up to nearly R280 million while the second phase amounted to nearly R250 million.

The third phase, which the SIU is yet to commence, totals about R900 million.

The unit was on Thursday updating the portfolio committee on trade and industry in Parliament on the status of its investigation into the NLC.

The SIU head, Andy Mothibi, described the NLC as a criminal enterprise as the unit had unveiled a web of criminal activities and collusion between senior members of the commission, legal representatives and its subjects that were meant to benefit from the fund including non-profit-organisations.

Mothibi told Parliament that the brazen corruption in the NLC may force the unit to introduce phase four.

He said this kind of investigation required a “meticulous assessment and investigation”.

In a report seen by The Star titled “Progress update on the status of the SIU’s investigations relating to the NLC”, it stated that applications to fund creches had been used as a cover for getting funding that was then syphoned off to a variety of individuals and companies.

The report states: “The unit had initially received the following new allegations from NLC:

•Procurement allegations have been received by SIU, however, they are not covered by the current NLC proclamation. The SIU seconded members to NLC in order to deal with some of the new allegations while waiting for the new proclamation.

•In order to extend the scope of the proclamation, business development is busy drafting motivation to extend the scope of the NLC proclamation to include a new focus area.

•Some of the grant funding allegations received are dated as far back as 2010 and they are not covered by the current NLC proclamation.

•SIU has also received several grant funding allegations which will necessitate the NLC investigation to move to phase 4 of the investigation.

•Lifestyle audit allegations for NLC officials have also been received by the SIU, but not covered by the current NLC proclamation. The SIU will be the second member to NLC in order to deal with the lifestyle audit.”

Some of the revelations in the investigations include how the funds meant to uplift the community of Marikana and the surrounding areas in the North West were squandered.

The other findings are related to Pheto, who unduly benefited, once again, from the NLC grant funding.

The NLC approved grant funding of R5 million to Zibisibix Non-Profit Company for a chicken farm in December 2018. After receiving the R5 million, money moved from the account and payments were made to different accounts, including that of Black Planet Trading, whose director is Sindi. The company was paid R140,000.

The farm was purchased for R850,000, and the SIU found that the former chairperson of the NLC board, Professor Alfred Nevhutanda, signed the offer to purchase the farm in the Vaal area.

More evidence revealed that the farm was purchased for the benefit of Dimakatso Pheto, who is Terry’s sister. The case has been referred for civil litigation for recovery and criminal referrals are being prepared.

Another glaring revelation was the looting of about R15 million, a grant that the South African Youth Movement (SAYM) had applied for on behalf of award-winning actor Presley Chweneyagae of the Chweneyagae Foundation.

The investigation uncovered that the foundation was used to launder and distribute the R15m grant to different companies of officials at the NLC.

From the R15m, R2.9m was transferred to Iron Bridge Travelling Agency and Events in August 2016. Iron Bridge Travelling Agency and Events are owned by former NLC chief operating officer Phillemon Letwaba’s wife, Rebotile Malomane.

In May 2017, a further R950k was transferred to VNMM Consulting Engineers CC. VNMM Consulting Engineers is owned by Professor Nevhutanda’s son-in-law, Meshack Makhubela.

“On 25 May 2017, an amount of R500,000 with a reference ‘plot purchase’ was transferred to conveyancing attorneys. From the balance of R450,000, Professor Nevhutanda received R100,000 for a bus purchase and a further R60,000 for a funeral and debit orders for a car finance account,” said the report.

Chweneyagae was the co-writer and co-director of the musical billed to take place in three provinces in 2017. However, there was little evidence that the events took place.

Some of what the SIU observed in the matter, which it said was a modus operandi used to syphon money from NLC through various NPO and NPCs, were the misuse of proactive funding provision in the NLC Act, inadequate project management, lack of monitoring and evaluation, collusion between NLC officials and NPO and NPCs, collusion between some board members, members and NPO and NPCs, abuse of NPO and NPCs and the hijacking of NPO and NPCs.

Mothibi said the unit was expected to submit an interim report to Ramaphosa by the end of February.

Responding to the update, the portfolio committee’s spokesperson Rajaa Azzakani said the committee was committed to ensuring that those fingered are brought to book.

“Because of new allegations surfacing about procurement, the SIU is applying for an amendment to the scope of the president’s proclamation to include these allegations and the motivation for this is currently being drafted by their business development unit. Meanwhile, the SIU has seconded members to the NLC to start processing some of these allegations while awaiting the new proclamation,” she said.

The Star

#marikana

Govan Whittles on making an impact through work on ‘Carte Blanche’

The great Lotto heist

Call for R1bn Marikana lawsuit to be heard as soon as possible