Special Investigating Unit (SIU) head, Advocate Andy Mothibi, says the unit has gathered enough evidence for civil, prosecutorial and disciplinary action to be taken against those who allegedly “siphoned” some R279 million from the coffers of the National Lotteries Commission (NLC).

Mothibi was briefing the National Assembly’s Portfolio Committee on Trade and Industry on Tuesday.

The corruption-fighting unit recently concluded the first phase of an investigation into allegations of maladministration, fraud and corruption at the NLC, which revealed how some NLC officials and board members allegedly illegally benefitted from funding grants meant for public benefit through non-profit organisations (NPOs).

“This investigation has been so intense, massive and complex in terms of tracing the money but the investigation will reveal that. The amount of money that was under investigation in phase one was about R279 million. The evidence has indicated that this money was corruptly siphoned out of the NLC, with the assistance of certain executives and certain board members.

“These matters will now be presented at all the fora where there is consequence management. Whether it’s in the civil litigation process… [or] in the disciplinary process [or]… in the criminal prosecution stage, we are satisfied that the evidence we have gathered will stand judicial scrutiny or administrative scrutiny,” Mothibi said.

Modus operandi

According to a SIU presentation, grant funding would be transferred to NPOs for the construction of, amongst others, a museum, rehabilitation centre or a sports ground.

Following the deposit of the monies into the NPO’s bank account, an official from the NLC would allegedly call the NPO to instruct them to use a construction company linked to a NLC official or board member, or to transfer a portion of the grant to a trust fund linked to the said official or board member.

According to the SIU, the patterns of alleged criminal behaviour by the NLC officials were enabled by:

Misusing the proactive funding provision of the NLC Act.

Inadequate project management.

Lack of monitoring and evaluation.

Collusion between NLC officials, board members and NPOs.

Abuse and/or hijacking of NPOs.

Ineffective auditing.

Maladministration in grant approvals.

“This is an organised syndicate meant to siphon money from the NLC. We have used trace methods and technology that has led us to all the monies that we have traced. This investigation also entailed meticulous analysis of bank accounts and payment processes from various banks, and we traced which bank accounts benefitted and which ones benefitted corruptly,” Mothibi said.

He said investigations are continuing into the NLC.

“We have commenced with phase two and that investigation is comprises about 17 matters. These 17 matters…  increased to about 24 and this increase is about the continued allegations that we have received from various areas of society, the public and the media, and we are then enjoined to investigate those matters. There will also be phase three…which compromises about 37 matters,” he said.

The portfolio committee meeting continues.

Source: South African Government News Agency