SIU probing dodgy lottery grants worth over 1.4 bn

The Special Investigating Unit (SIU) is probing over R1.4 billion in dodgy lottery grants, the unit’s head, Andy Mothibi, told the parliamentary portfolio committee for trade, industry and competition.

The SIU’s investigation into the National Lotteries Commission (NLC) includes examining the purchases of luxury homes for former NLC board members and its former commissioner and a R6.3 million Rolls-Royce bought with lottery funds in 2016 by Alfred Nevhutanda, the former board chair. Nevhutanda’s 10-year term ended in November 2020.

Mothibi said that civil litigation would be instituted to recover misappropriated funds that were used to pay for Nevhutanda’s home.

The SIU recently successfully applied for a preservation order over a R27 million property and its furnishings owned by a company of which Nevhutanda is the sole director.

The house was paid for by nonprofit organisations that received grants, as well as by private companies that provided services to the NLC.

In a significant move, the new NLC board said it had placed a moratorium on proactive funding. Proactive funding had allowed the NLC, in consultation with its board, to identify and fund projects without receiving an application for a grant.

This loophole, introduced in a 2015 amendment to the Lotteries Act, enabled industrial-scale looting of lottery funds meant for good causes.

The board also said it planned to “conduct lifestyle audits across all levels of staff to root out corruption at the NLC”.

The SIU’s appearance in parliament was a follow-up to a previous presentation by the unit in March, when Mothibi revealed a litany of fraud, money laundering and networks of corruption involving former NLC chief operating officer NLC Phillemon Letwaba, a senior member of his family, two former board members, Nevhutanda and William Huma, and hijacked nonprofits and shelf companies.

In his presentation on Tuesday, Mothibi said the SIU was looking at more than R1.4 billion in dodgy grants, over three phases of investigation.

The first phase, now complete, involved 12 grants valued at R279.7 million, which were “corruptly siphoned out of the NLC with the assistance of [former NLC] executive and board members”.

A report on the first phase will be handed to President Cyril Ramaphosa by 31 October. The second phase, which is under way and involves 17 matters, has identified R246.6 million in grants for investigation. The report on this leg of the investigation is due in March 2023.

The third phase of the investigation, which will begin in April next year, will investigate grants valued at R905.9 million, for a total of R1.4 billion of lottery funding under investigation.

If further information of corrupt grants was received, they would be investigated, Mothibi said. Civil litigation to set aside and recover the stolen funds is under way and applications for preservation orders over eight more properties purchased with misappropriated lottery funds will come before the Special Tribunal soon, Mothibi said.

A list of 13 implicated people will be handed to the National Prosecuting Authority by the end of October. Barney Pityana, the new NLC board chair, said NLC planned to embark on a programme to restore its damaged reputation.

Minister of Trade, Industry and Competition Ebrahim Patel told the portfolio committee that the latest report revealed how NLC funding “meant for the most vulnerable communities and projects (old-age homes, drug rehabilitation centres and centres for young children), were cynically and brazenly stolen by an organised syndicate of person”.

ALSO READ: Organised syndicate ‘siphoned’ R279m from Lottery Commission – SIU

This article first appeared on GroundUp and was republished with permission. Read the original article here