Parly keen to see NLC prosecutions

Thursday, February 15, 2024

The Portfolio Committee on Trade, Industry and Competition on Wednesday committed to doing everything in its power to ensure that criminals involved in the National Lotteries Commission (NLC) corruption are brought to book.

The committee received an update from the Special Investigating Unit (SIU) regarding its investigations into the NLC and another from the National Prosecuting Authority (NPA) on cases referred to it.

“We want to assure the South African public that this committee is determined to see the criminals prosecuted,” said Committee Chairperson Judy Hermans.

These investigations emanated from President Cyril Ramaphosa’s proclamation of 6 November 2020 for the SIU to investigate allegations of corruption and maladministration at the NLC from 1 January 2014 to 6 November 2020.

The SIU said that the phase 1 investigation is now complete, at a cost of R279 710 409. Meanwhile, the phase 2 investigation is 90% completed, at a cost of R246 659 310. It will be finalised by 30 April 2024.

The SIU is also busy with phase 3 of the investigation, currently valued at R905 901 910, which is expected to be finalised on 31 December 2024.

At Wednesday’s session, the committee heard that the interim report is currently under review and will be submitted to the Presidency by 29 February 2004.

Furthermore, the committee heard, in almost all matters under consideration, very little of the money approved for grant recipients was used for the intended projects, nor was it received by the intended beneficiaries.

In some cases, no money was spent on the projects it was intended for.

The committee also heard that a syndicate or syndicates operated within the NLC and worked in conjunction with non-profit organisations (NPOs) or beneficiaries to syphon off funds.

Methods used to syphon off funds included misusing the proactive funding provision in the NLC Act, inadequate project management, lack of monitoring and evaluation of projects, and collusion between NLC officials or certain board members and the NPOs.

Steps taken

Furthermore, because of new allegations surfacing about procurement, the SIU is applying for an amendment to the scope of the President’s proclamation to include these allegations and the motivation for this is currently being drafted by their business development unit.

Meanwhile, the SIU has seconded members to the NLC to start processing some of these allegations while awaiting the new proclamation.

The committee also heard that the Asset Forfeiture Unit has seized several properties and stopped the pay-out of a senior NLC official’s pension, after the official resigned before disciplinary action could begin.

The NPA assured the committee that the NLC matters are a priority. The NPA has obtained three preservation orders in the NLC cases, in the meantime. The first order was obtained on 21 December 2022 to the value of R56.3m and included one movable property, nine immovable properties and two franchises.

It has been established that the cash purchases for the properties were linked to grants allocated by the NLC. A total of R22.4 million in grant funding was used to pay for the fixed properties.

The second preservation order was obtained on 28 September 2023 for five immovable properties to the value of R14.8m. The third preservation order was obtained on 4 November 2023 for an amount of R23.2m against four immovable properties and three luxury vehicles.

The NPA indicated that various interlocutory applications had delayed the forfeiture applications, but it has endeavoured to secure the preservation orders speedily.

The NLC is meanwhile in the process of conducting lifestyle audits on its officials to lower the risk of similar incidents in future.

Hermans said that while the committee favoured lifestyle audits for NLC staff, extending this to the NLC board members should also be considered.

“We want to assure the South African public that this committee is determined to see the criminals prosecuted.

“We are happy to see progress. However, we are extremely concerned by comments that there are still officials of the NLC involved in alleged crime and urged the new NLC board and management to address this with urgency,” Hermans said. –