Minister responds to attack on the Lottery

The National Lotteries Commission (NLC) says that despite two legal opinions expressing reservations, it had to surrender R300-million from its reserve fund to the National Treasury.

Failure to do so would have resulted in both the board and the NLC commissioner being guilty of financial misconduct, NLC board chairperson Barney Pityana explained in a letter to Parliament dated 3 October.

The payment to the Treasury was raised by MPs during a fiery and often ill-tempered meeting when Pityana, NLC commissioner Jodi Scholtz and other senior executives appeared before the trade and industry parliamentary portfolio committee on 18 September.

The NLC had reserves of R1.4-billion at the time of the payment but was only ordered to pay R300-million to the Treasury, Pityana told Parliament.

The NLC reserve fund ensures that it has sufficient funds in its kitty if cash flow problems arise.

MPs said that the NLC had not sufficiently answered questions in Parliament and instructed Pityana to supply written answers. Pityana has done so.

Parks Tau is the recently appointed Minister of Trade and Industry. Mzwandile Masina is the recently appointed chair of the parliamentary portfolio committee.

In a letter to Tau, Masina had asked the minister to disband the NLC’s board and dismiss Scholtz, as had several other MPs during the 18 September committee meeting.

The committee has summoned the Treasury to appear before it on 16 October to explain the R300-million payment.

GroundUp reported last week about a coordinated campaign – both within Parliament and outside of it – pushing for the dismissal of Scholtz, who was appointed early in 2023, and the dissolution of the NLC’s board led by Pityana.

Read more: The three MPs and former beneficiary behind the attack on the Lottery

The NLC has been under sustained attack these past few weeks, with allegations of corruption, nepotism, conflicts of interest and discrimination against staff, so far without evidence being offered by MPs and others making these claims.

Many of the MPs’ questions during the 18 September committee meeting appeared to be based on recent media reports and allegations contained in letters to Tau.

Several different people and organisations have coalesced around the assault on the NLC, which had been engulfed by corruption for a decade.

The attack on the NLC in Parliament was led by Masina, former cabinet minister Malusi Gigaba and the EFF’s Mbuyiseni Ndlozi, with MPs from other parties on the committee joining in.

The attack is taking place against a backdrop of the process to appoint a new lottery licence operator. There appears to be a fightback by former and current executives and some board members, who have either resigned or are facing disciplinary hearings for their role in the massive looting of the lottery that took place until 2022. In 2022, the new board, headed by Pityana, was appointed.

Properties and other assets worth tens of millions of rands belonging to former NLC executives and board members, paid for with misappropriated lottery funds, have been frozen by courts.

The new board and administration embarked on a clean-up of the organisation and has taken measures to hold those involved in the looting to account.

The Democratic Alliance (DA) appeared to be a lone voice in Parliament defending the NLC against these attacks.

In a statement this week, DA MP Toby Chance wrote: “Widely reported attacks by members of the portfolio committee on trade, industry and competition on the National Lotteries Commission (NLC) board chair and executive management at a committee meeting that took place on 18th September paint a distorted picture of the state of play at the Commission.

“The DA believes the current board and management must be given the benefit of the doubt in their herculean task of cleaning out the NLC’s Augean stables,” Chance said.

The DA will monitor matters closely and hold all parties – Minister Tau, the board and executive management – to account to restore sound governance and management controls over this institution, vital to the survival of so many organisations and worthy causes, he said.

Read letter from Parks Tau to Parliament.

Read letter from Barney Pityana to Parliament.

‘Bullied’

Lottery licence