Lottery steps in at 11th hour to help fund Team SA at Paris Olympics

The National Lotteries Commission has thrown a cash-strapped Team South Africa a last-minute multimillion-rand lifeline to boost their participation in the Paris Olympics.

But the almost R39.5-million, only approved less than three weeks before the Games began, comes with stringent conditions on how it must be used, the commission told GroundUp.

The lottery grant is split between the Olympic Games, R27.9-million, and the Paralympics, R11.5-million, which is also in Paris and follows immediately after the Games.

A condition is that lottery money may only be spent on the athletes, coaches and medical officials. It may not be used to cover the travel and other expenses of sports administrators or politicians who attend, as has happened in the past.

Read more: Olympic Games Paris 2024

In the run-up to previous Olympic Games, some athletes were left scrambling to raise funds to make up a shortfall in the assistance they received from the South African Sports Confederation and Olympic Committee (Sascoc).

“Attendance of MPs or other officials is not an approved line item for this grant,” the National Lotteries Commission said.

It added that it had also placed several former Sascoc directors – who were involved in the dodgy R24.9-million grant in 2016, on its delinquency list.

“Sascoc has been investigated by Special Investigating Unit, and all members of Sascoc that were implicated have been listed on the National Lotteries Commission Non-Compliant Grantee Register… as non-eligible members to apply for National Lotteries Commission funding going forward,” the commission said.

“None of the Sascoc board members who were implicated in the corruption of National Lotteries Commission funding form part of the current Board of Sascoc.”

“Key administrative personnel at Sascoc are also no longer involved. There are currently no Distribution Agency members who have any affiliation to Sascoc.” (The Distribution Agency is responsible for adjudicating National Lotteries Commission grants.)

The matter had also been referred to the police for further investigation.

The National Lotteries Commission also insisted that Sascoc open a separate bank account for the lottery funds and that its external auditors audit the grant, and “provide the commission with an assurance report”.

A bonus of R5-million is included in the grant for medal winners.

Last-minute lifeline

It was touch-and-go until almost the last moment of Team SA’s departure for Paris as to whether the National Lotteries Commission would grant the funding Sascoc had requested.

The commission’s tough stance was based on the abuse of the hundreds of millions of rand that had poured into the Olympic body’s coffers over the years while top athletes struggled to find funding to compete on the world stage.

The National Lotteries Commission was also aware of the damning findings of a commission of inquiry into Sascoc’s affairs. Led by a retired judge, the commission’s 2018 report finally laid bare the extent of the rot at Sascoc.

The commission was particularly mindful of a 2016 grant to Sascoc that is now the subject of a Special Investigative Unit investigation. One million rand from this grant was diverted as part payment for a Rolls-Royce for former commission board chairperson Alfred Nevhutanda, while millions more were diverted to a company owned by the wife of the commission’s former chief operating officer, Phillemon Letwaba.

GroundUp previously reported how the Special Investigating Unit had told Parliament that millions of rand from the grant were also paid to Ironbridge Travelling Agency, of which Letwaba’s wife was the sole director.

Special Investigating Unit head Andy Mothibi told Parliament that Sascoc had acted as a conduit for the MShandukani Foundation, a non-profit entity, for an application to fund an “(Olympics) Roadshow send-off to Rio”.

https://www.youtube.com/watch?v=hw5xlvbiBPI

The MShandukani Foundation and construction company M. Shadukani Holdings, both headed up by Mashudu Shandukani, have been identified by the Special Investigating Unit as allegedly being used to launder tens of millions of rand misappropriated from lottery grants. Shandukani Holdings is also under investigation by the Special Investigating Unit for its role in the construction of a new school in Limpopo that was so poorly built it needed structural repairs within 19 months of opening its doors.

Sascoc had originally applied for R34.8-million on behalf of the MShandukani Foundation, but was only awarded 25-million, Mothibi told Parliament.

How Rio millions were plundered

The grant agreement was signed on 19 July 2016 and the money was almost immediately paid out in a single tranche. Then, between 21 July and 27 July 2016, Sascoc paid the foundation R24.8-million in three payments, retaining a tiny amount for itself.

Before the first payment, the foundation had only R585 in its account.

The foundation, in turn, paid R3.6-million to Ironbridge Travelling Agency, in which several members of Letwaba’s family have been directors. His wife, Rebotile Malomane, who has been implicated in dodgy Lottery grants, was – and still is — the sole director of Ironbridge. Letwaba resigned under a cloud in 2022 while facing disciplinary charges that included abusing his position to enrich himself and his family.

A week later, on 10 August 2016, Ironbridge, which had a balance of R21,953 in its account before the deposit by the MShandukani Foundation, transferred R1-million to a Rolls Royce dealership for Nevhutanda’s car.

A total of R15.4-million was transferred to Ironbridge, Mothibi told Parliament.

Top recipient of lottery funding

Before the latest grant, Sascoc had received almost R800-million since the lottery made its first grants in 2002. This makes Sascoc the top recipient of lottery funding, with the Sports Trust (R204-million) and the 2010 Fifa World Cup Organising Committee SA (R200-million) in distant second and third places.

Sascoc’s torrent of cash came to an abrupt end in 2018 when it was kicked off the gravy train after it fell out with the National Lotteries Commission, which said the Olympic body had become dependent on lottery funding.

New funding restrictions, which only allowed national sports federations to apply for a maximum of R5-million in any given year, were also introduced.

The decision left Sascoc reeling and in dire financial straits.

“It is a serious challenge for the organisation,” Sascoc said at the time. “The leadership of Sascoc and the National Lotteries Commission are engaging. Advice (we have) received is that the minister of sport and the (minister) for trade and industry will meet and discuss the new National Lotteries Commission regulations. We are (also) engaging and putting our case to the right authorities on this issue.”

Sascoc said that in the absence of commission funding it would now have to rely on the government and the International Olympic Committee as it prepared for the 2020 Tokyo Games.

Big money, corruption and poor governance

Sascoc has been at the centre of corruption and poor governance allegations and financial scandals for years. It culminated in a governance inquiry into the organisation headed up by retired judge Ralph Zulman with two other members, Ali Bacher, a former South Africa cricket captain and administrator, and attorney Shamima Gaibie.

After years of serious allegations, the Inquiry’s final report finally laid bare the extent of the rot at Sascoc.

The Zulman Inquiry’s final report findings included:

• A “minuscule” amount of the board’s time was spent on Sascoc’s “statutory mandate” to promote and develop high-performance sports”.


• There was no “compliance with the basic principles of ethics, transparency, accountability, good governance, or with policies and procedures” to manage the affairs of Sascoc, “including its financial affairs”.


• There was a “significant lack” of corporate governance in the management of Sascoc, especially in the management of its financial resources.


• That factionalism within the board resulted in it being “essentially dysfunctional”.


• There was complete mismanagement of funds used for costs associated with international travel for members of the board and senior management.


• The excessive travel and subsistence perks for board members, and members of the management of Sascoc, amounted to an abuse of public funds.


• An excessive amount of Sascoc resources had been spent on legal fees.

Lottery funding budget for the Paris Olympics

Olympics Team SA Travel Expenses: R8,465,000

Tea SA events: R1,875,000

Pre-Games preparation camps: R7,000,000

Outfitting: R1,585,000

Travel allowances and professional services: R2,422.000

Team expenses: R1,545,000

Team SA performance rewards: R5,000,000

Paralympic Games: R11,502.000.

First published by GroundUp.