The South African Sports Confederation and Olympic Committee (SASCOC) and several associated parties have been ordered to pay back some R24.98 million unlawfully diverted from a National Lotteries Commission (NLC) grant.
The order was handed down by the Special Tribunal following an investigation by the Special Investigating Unit which, according to the unit, found that payments meant to fund the 2016 Rio Olympics roadshow campaign were instead used to enrich certain individuals and companies linked to a former NLC official.
“On 7 July 2016, SASCOC applied for a grant of R34.83 million from the NLC as a conduit for the Mshandukani Foundation. This came after the Mshandukani Foundation was registered as a nonprofit company [NPO] on 16 February 2016 and opened a bank account on 12 April 2016.
“The investigation also uncovered that the identities of two women – a receptionist and a geologist intern at Mshandukani Holdings (Pty) Ltd – were used without their consent and their signatures forged to register the foundation, which had no affiliation with SASCOC.
“Despite this, SASCOC assisted Mshandukani in securing funding from the NLC,” the SIU explained in a statement.
Sophisticated scheme
The SIU said when funding was secured, SASCOC promptly transferred R24.83 million to the Mshandukani Foundation in three tranches.
This despite the fact that the foundation “did not qualify for funding, as it was a newly established NPO and lacked the required annual financial statements”.
Some R150 000 was retained and marked as “services rendered”.
Portions of the grant were transferred to various entities by the foundation, including:
• R15.35 million paid to Ironbridge Travel Agency between 22 July and 28 September 2016.
• R7.23 million paid to Mshandukani Holdings between 22 July 2016 and 6 March 2017.
• R2 million paid to Ndzhuku Trading between 23 and 28 July 2016.
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Furthermore, foundation paid R240,000 to several beneficiaries under the reference “SASCOC Events”, including:
• Benza Consulting – R80 000.
• Imbizo Events – R85 000.
• Koleka Music Productions – R30 000.
• Minenhle Dlamini – R50 000.
The investigation also found that several companies paid by Ironbridge Travel Agency were linked to NLC Chief Operations Officer, Philemon Letwaba.
Among the payments identified were:
• R450 000 paid to Letwaba.
• R600 000 paid to a former NLC official in legal.
• R3 million paid to Mosokodi Business Trust, an entity linked to Letwaba.
“The SIU found that the R15.35 million transferred to Ironbridge Travel Agency, owned by Karabo Charles Sithole, who is related to Letwaba, was used for purposes unrelated to the grant’s approved objectives.
“However, the funds were used to purchase vehicles and livestock, pay panel beaters, cover network installation services, fund decor, and enrich Letwaba, his family, and associates,” the statement read.
All the respondents have been ordered to pay back the money except the two women whose identities were fraudulently used.
Dlamini and Imbizo Events have already concluded settlement agreements with the SIU.
“In the judgment, the Tribunal found that SASCOC was complicit in the scheme to ‘siphon’ funds from the NLC and played a role in facilitating the unlawful diversion of public funds.
“The Tribunal orders form part of the implementation of the SIU investigation outcomes and consequence management to recover financial losses suffered by State institutions due to corruption or negligence.
“In line with the Special Investigating Units and Special Tribunals Act 74 of 1996, the SIU will refer any evidence of criminal conduct uncovered during its investigation to the National Prosecuting Authority for further action,” the statement concluded. – SAnews.gov.za
