National Lotteries Commission

OUTA INVESTIGATES THE NATIONAL LOTTERIES COMMISSION'S USE OF FUNDS


Overview

OUTA has since 2018 investigated irregularities in the National Lotteries Commission (NLC) use of funding, particularly its proactive funding.


Pro-active funding is founded on the Lotteries Amendment Act which allows the NLC to identify worthy causes that may be funded without a formal grant application. Pro-active funding is at face value a noble cause, aimed to uplift and empower vulnerable members of society by providing much-needed funding to non-profit organisations to assist communities and related projects. Unfortunately, these funds do not all reach the vulnerable but are diverted once the funds reach the charities (which are either hijacked or disguise the beneficial ownership).

The NLC not only enjoys unfettered discretion when deciding to fund a specific charity, but the absence of strict procurement principles and procedures diminishes transparency, which opens it up to abuse.

When charities apply for grant funding in terms of the pro-active funding model, certain criteria need to be met. These include that the charity applying should have the capacity to use the funding for the purpose it applied for and should have been in existence for at least two years. OUTA has found that some charities either did not exist prior to applying for funding, had no track record of doing any charitable work, or in many cases simply shared business addresses with other established entities. This type of practice is often described as fronting.

Vulnerable members of society who should receive help are losing out. The only “winners” are the real beneficial owners of the charities – in most cases, the directors of these charities. 

OUTA has been investigating the use of the funds which the NLC distributed to two organisations in particular, Zibsifusion and I Am Made For God's Glory.



The November 2019 report on schools

In May 2019, OUTA conducted site visits to eight Limpopo schools to assess the work done by Zibsifusion with NLC funding.

This trip was initiated after OUTA received a copy of a report titled “Limpopo Sanitation Report”, which had been issued to the NLC by the contractor Zibsifusion. This report detailed Zibsifusion’s progress regarding the building of ablution facilities in eight schools located in Polokwane and Venda.  Red flags were raised by OUTA because the NLC awarded Zibsifusion R10 million to build ablutions in ten schools and not eight. This R10 million had already been paid to Zibsifusion, but OUTA's site visit found that minimum work had started.

In November 2019, OUTA released a report on this visit, which  outlines the state of ablutions facilities at these schools and the work which was done between November 2018 (when Zibsifusion received the funds) and May 2019 (when OUTA visited the eight schools).

OUTA's report on the schools visit is here.

The criminal complaints in July 2020

In July 2020, OUTA opened criminal complaints arising from the NLC funding to Zibsifusion and I Am Made For God's Glory (IAMFGG).

OUTA believes that there is prima facie evidence to investigate both those responsible for the organisations as well as NLC officials. OUTA is also concerned that senior officials should have known about these activities but failed to report them to the relevant law enforcement agencies, which in itself might also constitute a criminal offence.

The complaints are about the award to IAMFGG of R11.375 million in April 2018 and to Zibsifusion of R10 million in November 2018. The directors of both organisations were Liesl Moses, Tsietsi Joseph Tshabalala and Lesley Ramulifho.

The grant to Zibsifusion was signed by Zibsifusion’s Louisa Mangwagape and the NLC’s COO Phillemon Letwaba. The Zibsifusion grant was supposedly to build toilets at various Limpopo schools. However, an OUTA investigation found that this work wasn’t completed.

The grant to IAMFGG was signed by its director Ramulifho and the NLC’s Letwaba. It was supposed to fund the construction of a sports complex but appears to have been used instead to buy an Ocean Basket restaurant franchise for Ramulifho.

The Zibsifusion complaint is here.

The IAMFGG complaint is here.

The complaint to SAICA in September 2020

OUTA filed a complaint with the SA Institute of Chartered Accountants (SAICA) against Phillemon Letwaba, who is the NLC COO and a chartered accountant. As COO, Letwaba has presided over the apparent laundering of millions of rand through supposed charitable entities, funds which did not reach the supposed beneficiaries. Even if Letwaba did not benefit directly, he is responsible as this happened under his watch. Filing such a complaint makes it possible for SAICA to investigate and potentially remove Letwaba from the roll of chartered accountants. SAICA may also liaise with law enforcement agencies.

OUTA's complaint to SAICA is here.

  • Since the deliberations on the appointment of a chairperson to the National Lotteries Commission commenced in November 2020, OUTA has been keeping a close eye on the developments between the Portfolio Committee on Trade, Industry and Competition and the Minister, Ebrahim Patel.
  • In terms of the Lotteries Act, 1997 the Minister is to appoint a chairperson following a nomination process by the Portfolio Committee.
  • Notwithstanding a series of delays and a plethora of pending investigations into irregularities within the National Lotteries Commission, the process of appointing a chairperson is underway.
  • On 24 February 2021, the Portfolio Committee resolved to finalise the nominations to six candidates by 26 February 2021. However, on 26 February 2021, the Portfolio Committee voted that the shortlist be expanded to eight candidates, the names of which consist of the following individuals:

​ ​- Mr Terry I Tselane

​ ​- Dr Nyameko B Pityana

​ ​- Ms Beryl D Fegusan

​ ​- Mr Gugulethu G Xaba

​ ​- Dr Muthuhadini A Madzivhandila

​ ​- Rev Frank Chikane

​ ​- Mr Ashwin Hirjee Trikamjee

​ ​- Mr Themba TC Dlamini

  • All curriculum vitae’s are to be published on Parliament’s social media pages for public comment.
  • All interviews are to be conducted on 9 March 2021 in line with the relevant COVID-19 protocols in Parliament. Upon conclusion of the interviews, the Portfolio Committee will draft a report containing the its consideration and recommendations for the position of chairperson and then submit the report to the National Assembly on 16 March 2021.
  • Although OUTA takes cognisance of the Portfolio Committee’s commitment to conclude the process as soon as possible, we will remain vigilant and monitor the process to ensure that a suitable candidate is appointed. OUTA remains hopeful that the Minister does not digress from appointing a candidate in line with the provisions of the Lotteries Act and that he does not consider a candidate with a questionable history or a candidate implicated in maladministration.
  • OUTA remains committed to ensure that the appointment of a suitable candidate to the National Lotteries Commission is not only in the interest of the NLC itself, but also in the interest of the public.
  • On 9 March 2021, OUTA submitted it objections to certain candidates identified by the members Portfolio Committee. Following deliberations within the, no final appointment has been made.
  • On 31 March 2021 during a Portfolio Committee meeting, it was suggested that the process will only be finalised at a later stage. Minister Patel argued that a position for an acting chairperson be filled in the interim, pending a final appointment.
  • OUTA remains vigilant on any developments.
  • Since the deliberations on the appointment of a chairperson to the National Lotteries Commission commenced in November 2020, OUTA has been keeping a close eye on the developments between the Portfolio Committee on Trade, Industry and Competition and the Minister, Ebrahim Patel.
  • In terms of the Lotteries Act, 1997 the Minister is to appoint a chairperson following a nomination process by the Portfolio Committee.
  • Notwithstanding a series of delays and a plethora of pending investigations into irregularities within the National Lotteries Commission, the process of appointing a chairperson is underway.
  • On 24 February 2021, the Portfolio Committee resolved to finalise the nominations to six candidates by 26 February 2021. However, on 26 February 2021, the Portfolio Committee voted that the shortlist be expanded to eight candidates, the names of which consist of the following individuals:

​ ​- Mr Terry I Tselane

​ ​- Dr Nyameko B Pityana

​ ​- Ms Beryl D Fegusan

​ ​- Mr Gugulethu G Xaba

​ ​- Dr Muthuhadini A Madzivhandila

​ ​- Rev Frank Chikane

​ ​- Mr Ashwin Hirjee Trikamjee

​ ​- Mr Themba TC Dlamini

  • All curriculum vitae’s are to be published on Parliament’s social media pages for public comment.
  • All interviews are to be conducted on 9 March 2021 in line with the relevant COVID-19 protocols in Parliament. Upon conclusion of the interviews, the Portfolio Committee will draft a report containing the its consideration and recommendations for the position of chairperson and then submit the report to the National Assembly on 16 March 2021.
  • Although OUTA takes cognisance of the Portfolio Committee’s commitment to conclude the process as soon as possible, we will remain vigilant and monitor the process to ensure that a suitable candidate is appointed. OUTA remains hopeful that the Minister does not digress from appointing a candidate in line with the provisions of the Lotteries Act and that he does not consider a candidate with a questionable history or a candidate implicated in maladministration.
  • OUTA remains committed to ensure that the appointment of a suitable candidate to the National Lotteries Commission is not only in the interest of the NLC itself, but also in the interest of the public.
  • On 9 March 2021, OUTA submitted it objections to certain candidates identified by the members Portfolio Committee. Following deliberations within the, no final appointment has been made.
  • On 31 March 2021 during a Portfolio Committee meeting, it was suggested that the process will only be finalised at a later stage. Minister Patel argued that a position for an acting chairperson be filled in the interim, pending a final appointment.
  • OUTA remains vigilant on any developments.

Return to Projects

In 2018, the National Lotteries Commission handed out R10m to Zibsifusion and R11.375m to I Am Made For God's Glory but the work was never done. OUTA has opened criminal cases.

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