The Special Tribunal has declared the R14 million in funding awarded by the National Lotteries Commission (NLC) to the Madumelani Community Project as unlawful, invalid and set aside.
The ruling, which was welcomed by the Special Investigating Unit (SIU), comes after the unit exposed an intricate scheme by brothers Tshimangadzo and Ndoweni Mukutu, who fraudulently obtained funding intended for the construction of a cultural village in Hammanskraal.
The cultural village that the two had claimed they would build was already established in 2015 through legitimate R300 000 in NLC funding by the Maubane Cultural Village and Community Arts Centre.
In her judgment, President of the Special Tribunal, Judge Margaret Victor, found that the scheme concocted by the two brothers was “clearly fraudulent”.
“The available facts and context are clear. South Africa is in the midst of a catastrophic corruption epidemic.
“In this case, the facts are such that the conduct of the antagonists is unconscionable, which justifies the piercing of the corporate veil. Money earmarked for a cultural village, a pride and joy of any community, has been lost to a fraudulent scheme,” Victor said.
The brothers have also been ordered to pay back the funding money.
Web of lies
According to the SIU, the two brothers weaved a scheme with “extensive planning and deliberate misrepresentation, including the unlawful use of the Madumelani Community Project’s constitution”.
Cited as one of the respondents in the judgment is Dzata Accountants – a firm already identified by the SIU as one of five firms that helped in the looting of NLC coffers.
The accounting firm allegedly prepared false financial statements for the grant application.
“The SIU investigation found that the original members of the Madumelani Community Project… did not apply for NLC funding and were unaware of the grant application process. Instead, Tshimangadzo Mukutu fraudulently submitted the application, falsely claiming to be a director of the organisation.
“Further evidence from the SIU’s probe revealed that the brothers had previously approached the project’s members, obtained a copy of its constitution under the pretext of assisting with funding applications, and later used it without authorisation.
“Several individuals listed as members in the application confirmed that they had no knowledge of the submission and that their signatures had been forged. The probe also uncovered misrepresentation regarding the purpose of the funding,” the corruption busting unit said.
Follow the money
The false takeover of the legitimate project also included the appointment of fictitious office bearers and the “opening of a bank account through which millions of rands were disbursed”.
“Following the disbursement of funds in February 2018 into a newly opened bank account, substantial payments were channelled to various entities and relatives, including companies associated with T Mukutu,” the SIU stated.
Between March and July 2018, the following transactions were made:
- Nine transactions with RUM Management Consultancy, owned by Ndoweni Mukutu, totalling some R3 070 000.
- Ndhava Management Consulting, owned by Tshisimba Collin Mukondoleli, received a payment of R4 999 000
- Thwala Front, owned by Mukondoleli’s wife, Kharivhe Fulufhelo Promise, was paid R1 400 000. At least R1 million of that money was paid to a money trading account.
- R50 000 was paid in salaries
- R400 000 was recorded as a hardware purchase
“The SIU found that the Mukutu brothers, along with Mukondoleli and his wife, and Tshilidzi David Netswinganani, who acted as the treasurer and one of the signatories, had ‘hijacked’ the NPO.
“In April 2018, five payments totalling R4 650 000 were also made, with R3 519 000 going to Mudonde Events and Investment owned by N Mukutu. These also included a payment of R3 million to a trust associated with Advocate William Huma, a former NLC Board member.
“Last year, the Special Tribunal ordered Huma to reimburse R21 million in misused grant funds, and the SIU obtained a preservation order for R10 million from the sale of his luxury residence,” the SIU said.
The corruption busting unit welcomed the ruling.
“The order of the Special Tribunal is part of the implementation of the SIU investigation outcomes and consequence management to recover financial losses suffered by State institutions due to corruption, maladministration, or malpractice.
“In line with the Special Investigating Units and Special Tribunals Act 74 of 1996, the SIU refers any evidence it uncovers that indicates possible criminal conduct to the National Prosecuting Authority for further action,” the SIU said. – SAnews.gov.za
