Special Tribunal declares R14m NLC grant to cultural project unlawful
The grant, paid out in February 2018, was intended to support the construction of a cultural village in Hammanskraal, Gauteng.
South Africa.- A Special Tribunal has declared a R14m (€720,000) grant from the National Lotteries Commission (NLC) to the Madumelani Community Project unlawful and invalid. The ruling nullified the allocation and ordered those involved to repay the full amount plus legal costs.
The grant, paid out in February 2018, was intended to support the construction of a cultural village in Hammanskraal, Gauteng. However, a similar project had already been established in 2015 by the Maubane Cultural Village and Community Arts Centre, following an earlier R300,000 grant from the NLC.
According to the SIU, brothers Tshimangadzo Mukutu and Ndoweni Mukutu were responsible for the scheme described as “clearly fraudulent”. Judge Margaret Victor, President of the Special Tribunal, ruled that the brothers, together with other implicated individuals, including Tshilidzi David Netswinganani, Tshisimba Collin Mukondoleli, and Mukondoleli’s wife, Kharivhe Fulufhelo Promise, acted together with the intent to defraud the NLC.
Other companies implicated in the case include Mudonde Events and Investment, RUM Management Consultancy, Ndhava Management and Thwala Front.
In court documents, the Special Investigating Unit (SIU) explained how the brothers obtained a copy of the Madumelani Community Project’s constitution under the pretext of helping with funding applications. They then used the document without permission to submit a grant application in the name of the non-profit organisation, while Tshimangadzo Mukutu falsely presented himself as a director.
Original members of the Madumelani project told investigators they had no knowledge of the application, and that some signatures on the documents were forged. A new bank account was also opened to receive the funds.
Once the money arrived, payments flowed quickly to entities connected to the individuals involved. Between March and July 2018, nine transactions totalling R3.07m (€157,286) went to RUM Management Consultancy, owned by Ndoweni Mukutu. Ndhava Management Consulting, linked to Mukondoleli, received R4.999m (€257,089). On the same day, Thwala Front, owned by Mukondoleli’s wife, received R1.4m (€72,000) and later deposited R1m (€51,429) into a money trading account.
Additional payments included R3.519m (€181,097) to Mudonde Events and Investment, owned by Ndoweni Mukutu, and R3m (€154,286) to a trust associated with former NLC board member Advocate William Huma. Huma was previously ordered by the Tribunal to repay R21m (€1.08m) in other NLC grant funds.
The SIU investigation, conducted under a proclamation issued by President Cyril Ramaphosa, showed that the original members of the Madumelani NPO were unaware of the grant process. The brothers and their associates effectively took control of the organisation for the purpose of accessing the funds.
In her ruling, Judge Victor described the actions as unconscionable. She stated: “Money earmarked for a cultural village, a pride and joy of any community, has been lost to a fraudulent scheme.”
The case forms part of the SIU’s ongoing work on NLC grant matters. The unit has referred evidence of possible criminal conduct to the National Prosecuting Authority.
For the lottery sector in South Africa, the ruling highlights continued efforts to address weaknesses in grant oversight. The funds distributed by the NLC are generated through the national lottery to support community projects in areas such as arts, culture and heritage. When grants are diverted, intended beneficiaries lose out and public trust in the system is affected.
