SIU expands probe to include procurement irregularities
Among the issues under scrutiny is the NLC’s expenditure of R24.7 million (€1.3m) on advertorials in the Sunday World newspaper between 2020 and 2022, aimed at countering media exposés on grant misuse.
South Africa.- The Special Investigating Unit (SIU) has widened its investigation of the National Lotteries Commission (NLC) to include procurement practices in addition to grant-related corruption. Authorised by President Cyril Ramaphosa, the extended mandate comes 18 months after the SIU sought greater investigative authority.
The original 2020 proclamation restricted the SIU to examining grant-related corruption between 2014 and 2020, leaving procurement issues untouched despite evidence of irregularities from whistleblowers and NLC-commissioned audits. The new mandate allows the SIU to investigate specific procurement cases, driven largely by a 2023 audit from TSU Investigations Services. The report uncovered violations involving hundreds of millions of rand, including questionable contracts and payments.
Among the issues under scrutiny is the NLC’s expenditure of R24.7 million (€1.3m) on advertorials in the Sunday World newspaper between 2020 and 2022, aimed at countering media exposés on grant misuse. Another case involves a R1.7 million (€90,000) contract for a flashmob event that never took place, linked to MSG Group Sales and Elsiscope Digital Solutions.
The SIU will also examine the appointment of legal firms, including Maluks, which engaged in litigation against former Trade, Industry and Competition Minister, Ebrahim Patel, and a tender awarded to Neo Africa for a non-existent hacking investigation.
NLC Commissioner Jodi Scholtz welcomed the expanded probe, emphasising its role in strengthening oversight. She said: “This development underscores our commitment to transparency and good governance. We look forward to continuing our collaboration with the SIU to address any irregularities and ensure that our operations are aligned with the highest standards of integrity and accountability.”
The SIU’s earlier efforts have led to recoveries, including a court order for a former NLC board member to repay R21 million (€1.1m) in misallocated grants. High-profile figures, such as actress Terry Pheto and musician Arthur Mafokate, have been linked to grant fraud cases, highlighting the misuse of funds intended for community projects in arts, sports and charity.
The delay in approving the extension raised concerns because the Department of Justice has stalled the SIU’s request since April 2024. The process spanned three justice ministers, with current minister Mmamoloko Khubayi finalising the approval 10 months after her appointment. Some allegations suggest political interference, though no concrete evidence has surfaced.
Scholtz noted that the NLC has independently investigated some procurement issues excluded from the SIU’s mandate and shared findings with authorities. The SIU will receive these reports, which may lead to further recoveries or prosecutions. However, the proclamation’s limits exclude certain accounting and auditing firms implicated in enabling lottery mismanagement.
