“Brazen theft that has been uncovered – laying the basis for action against implicated persons”.

Lifting the veil on maladministration in the National Lotteries Commission (NLC) today at a portfolio committee in Parliament, the Special Investigating Unit (SIU), the Department of Trade, Industry and Competition and new Board of the NLC provided detailed information on the findings of various investigations about grant funding intended for socio-economic upliftment.

“The funds of the NLC, meant for the most vulnerable communities and projects (old-age homes, drug rehab centres and centres for young children), were cynically and brazenly stolen by an organised syndicate of persons. However, the institutions of the democracy were able, when brought into action, to collect the evidence of wrong-doing that can ensure that implicated persons are identified and held to account,” the Minister of Trade, Industry and Competition Ebrahim Patel said today.

The Minister set out the steps taken by the Department since August 2019, at the start of the new Administration to address allegations of misconduct, including

  • undertaking physical visits by the dtic internal audit team on claimed project buildings
  • commissioning an independent forensic investigation into specific projects
  • requesting implicated NLC staff to be suspended
  • laying criminal charges with SAPS
  • supporting the appointment of the Special investigating Unit (SIU) to look into maladministration at the NLC
  • resisting pressure from orchestrated marches on the offices of the Minister
  • opposing a number of applications by external entities to suppress disclosure of beneficiary information and successfully challenging the NLC’s grounds for refusing to disclose such information, and
  • opposing a number of court applications by the NLC against the Minister on governance matters, including the Minister’s decision to commission an independent forensic investigation, which decision was upheld by the Gauteng High Court.

The Minister also appointed a new NLC Board and requested the Board to prioritise measures to hold implicated persons to account. The Board is headed by Dr Barney Pityana, a respected public figure and the Board members comprise Dr Cassius Lubisi (former head of Cabinet), Ms Precious Mvelane, a chartered accountant, Mr Willie Hofmeyr, former head of the Asset Forfeiture Unit and Ms Beryl Ferguson, a previous MP with experience in governance.

Minister Patel noted that while it has taken time to address the governance failures in the NLC and put the file of evidence together, it was necessary to scrupulously follow due process to avoid implicated individuals from relying on the courts to evade accountability.

“There is compelling evidence now available that can result in criminal charges, and recovery of money. Resignations do not absolve any implicated party from civil and criminal prosecution,” he said.

The head of the SIU Advocate Andy Mothibi and Chief National investigating Officer Leonard Lekgetho provided the Portfolio Committee on Trade, Industry and Competition with a detailed account of the work done to date and some of the preliminary findings.

The new Chairperson of the NLC Board, Dr Barney Pityana provided the meeting with details of action taken by the new Board to address the findings of the SIU.

Parliament heard that a number of senior staff of the NLC have resigned, including the NLC Commissioner (after she had been summoned by the SIU), the Chief Operating Officer (after he had been charged by the new Board) and the Chief Financial Officer.

The Minister advised the meeting that a number of additional steps are being identified for consideration by the Board, including:

  • Reviewing the pro-active funding programme thoroughly before any further approvals are made
  • Investigations into the activities of the regions of the NLC; and all previous forensic reports
  • Initiating a wider investigation beyond the pro-active funding projects, to include all contracts by the NLC and all channels through which payments were made by or on behalf of the NLC
  • Actions by the Board on the findings to date, to complement the work of the law enforcement agencies, including integrity measures involving staff and Board members of the NLC
  • Support for whistle-blowers who were threatened or dismissed
  • Addressing the position of communities or NGOs who were deprived of the support for which the NLC funding was designed
  • Promoting transparency: possible steps include publication of monthly reports on beneficiaries with project geo-location
  • Oversight visits to project sites by NLC Board.

“Syndicates responsible for looting public funds were able to rely on a network of professional firms that enabled the monies to be redirected and used sophisticated methods to cover up their actions and deflect attention. At the same time, we would not have made the breakthroughs in uncovering wrong-doing without a number of courageous individuals, ranging from whistle-blowers to journalists and investigators. They were able to show the channels through which monies flowed between the NLC and recipients, by-passing the intended community beneficiaries,” Minister Patel told Parliament.

Bongani Lukhele – Director: Media Relations
Tel: (012) 394 1643
Mobile: 079 5083 457
WhatsApp: 074 2998 512
E-mail: BLukhele@thedtic.gov.za
Issued by: The Department of Trade, Industry and Competition (the dtic)
Follow us on Twitter: @the_dti

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