The three MPs and former beneficiary behind the attack on the Lottery

1 Oct 2024

Three MPs and a former beneficiary spearhead criticism of the new board and management.

A withering attack on the new National Lotteries Commission in Parliament last week was led by three men: the chairperson of the trade and industry portfolio committee Mzwandile Masina, former public enterprises minister Malusi Gigaba and the EFF’s Mbuyiseni Ndlozi.

Under the chairmanship of the ANC’s Duma Nkosi, ANC MPs on the trade and industry portfolio committee had defended the previous National Lotteries Commission board and executive on more than one occasion. But this changed when, following Nkosi’s death, Judy Hermans of the ANC took over as the chairperson.

There was a sea change in the ANC-dominated committee’s stance, apparently on instructions from high up in the party, as the extent of the rot in the National Lotteries Commission became clear, and the committee joined the concerted pressure by opposition MPs to hold the commission to account.

This was bolstered by report-backs to the committee by the Special Investigating Unit (SIU), the National Prosecuting Authority, the auditor-general and the National Lotteries Commission, on the extent of the corruption under the previous administration.

In 2022, the SIU told the committee that it was investigating dodgy lottery grants valued at more than R1.4-billion. The SIU told GroundUp last year that this had increased and it was investigating more than 700 grants valued at more than R2-billion. This figure has almost certainly increased as the SIU continues to receive more tip-offs about corrupt grants.

‘Criminal syndicate’

Last year Andy Mothibi, the head of the SIU, told MPs who previously served on the portfolio committee that their investigation had uncovered a “criminal syndicate” operating inside the National Lotteries Commission. He said that members of the board and executives were involved and “worked with employees and outside entities and lawyers”.

But the new committee and the new set of members appeared to have done little or no research on what had come before when they confronted the commission last week.

Masina, who chairs the committee, first served as an ANC MP between 2014 and 2016, and is a former trade and industry deputy minister and ANC Ekurhuleni regional chairperson. In 2022, he was accused of bringing the party into disrepute by undermining negotiations between the ANC and the EFF – with EFF leader Julius Malema labelling him a “spoilt brat”.

But his differences with his party appeared to be a thing of the past when Masina returned to Parliament after the May 2024 election and was subsequently appointed as chair of the portfolio committee.

Masina was also a fervent supporter of former president Jacob Zuma. AmaBhungane has exposed his questionable involvement in a vehicle collision with a state vehicle while he was mayor of Ekurhuleni, in which a cover-up appeared to have taken place.

On 18 September in Parliament, Masina launched attacks on board chairperson Reverend Barney Pityana, Commissioner Jodi Scholtz, and other senior executives, claiming that they were not objective. He has since written to Trade and Industry Minister Parks Tau to ask him to dissolve the board.

He was supported in the portfolio committee hearing by former ANC Cabinet minister and committee member Malusi Gigaba. Gigaba was sworn in as an MP after the May election, though the Zondo Commission had recommended that he be investigated for his alleged role in state capture.

In the hearing, Gigaba questioned the independence of the National Lotteries Commission board and the appointment of Scholtz. He called for “prolonged investigations” to be “closed down as soon as possible” as they were “making the organisation unstable”.

It is unclear whether this was in response to ongoing disciplinary processes by the National Lotteries Commission or SIU investigations. The SIU has handed dossiers on some of its completed lottery corruption investigations to the South African Police Service and the Hawks for criminal investigation.

He also claimed: “People are being circulated between the DTIC (Department of Trade and Industry) and the SABS (the SA Bureau of Standards, a DTIC entity) and we are better served with their resignation.”

EFF MP Mbuyiseni Ndlozi also complained that there was “too much recycling of people… people are in circulation in the space. Perhaps you (the National Lotteries Commission) need a new board.”

“You need people who do not know people,” he said. “If you want to do things anew then you need a new board.”

Monthly list of allocated grants

MPs also complained that they did not know to whom National Lotteries Commission grants were being given. Yet grants allocated each year are listed in the annual report. And, under the new administration, the commission publishes a monthly list of allocated grants.

Ndlozi also called for the commission to give people on the streets food. “There is a big problem in Johannesburg. People are dying on the streets. You should give them money,” he said.

“If you cannot prove that money is arriving at charitable causes then you are not getting things done.”

Ndlozi falsely claimed that under the previous board and administration the National Lotteries Commission had consistently received clean audits. The commission had previously boasted about achieving years of successive clean audits, including telling Parliament in 2020 that it had received six consecutive years of clean audits. This was untrue as the commission had at that stage already received a qualified audit in 2018.

A few days earlier, the auditor-general reported to the committee on the National Lotteries Commission’s audit outcomes for the 2022/23 financial year, in which it was awarded a qualified audit outcome with findings.

In a report that he was prevented from delivering to the committee, but was shared with MPs by the committee secretariat before the hearing, Pityana makes it clear that the issues raised by the auditor-general happened during the tenure of the previous board and executive.

“Last year the material irregularity was detected and reported on our accounting statements,” Pityana said in his report.

“In fact, the matters had a source way before the era of this board and management. But every effort was done to attend to the matter, and so much so that disciplinary processes are under way against the staff concerned.

“Regarding this year’s audit, the audit has been delayed and every effort is being done to attend to any issues that the auditor-general has raised. I believe that the auditor-general will attest to the professional cooperation they have received from our finance team.”

Self-proclaimed activist

Another person very actively involved in the assault on the National Lotteries Commission is Tebogo Sithathu, a self-proclaimed activist who was close to members of the previous Lottery administration.

Sithathu heads up United Civil Society in Action, which applied for an urgent high court interdict to stop GroundUp from publishing details of Lottery grants to organisations. But the matter was withdrawn.

Sithathu, who is currently under investigation by the SIU in connection with a R9.7-million Lotteries grant to his now-defunct Gospel Music Association, also wrote a letter to Minister Tau. In his letter, Sithathu suggested the new National Lotteries Commission was spending too much money on the SIU and called on Tau to put an end to it.

Among a litany of complaints in his letter to Tau is the lie that this reporter and some of his associates received R50-million in lottery grants, claims for which he provided no evidence.

Last week, Sithathu flew from Johannesburg to Cape Town to attend the portfolio committee meeting, but was stopped when he tried to address the committee as a “stakeholder”.

After the meeting, he asked Scholtz if this reporter was employed by the commission, repeated the lie that I had received R50-million in Lottery funding, and demanded to know why the National Lotteries Commission had not acted against me. He also told Pityana that he should resign.

In another letter to Tau, dated 26 September and headed “Final Notice – Immediate Action Required or Legal Proceedings Will Follow”, Sithathu repeated many of the allegations in his previous letter to the minister.

“If the above demands are not met by 1 October 2024, we will immediately file a mandamus application to compel the minister to act and simultaneously seek an interdict to prevent the National Lotteries Commission board and commissioner from exercising any further decision-making authority,” he wrote.

“We will also pursue a declaration of delinquency against the board members under the Companies Act. These legal steps are necessary to protect the integrity of the National Lotteries Commission and ensure that its mandate to serve South African beneficiaries is preserved. We trust you will treat this matter with the seriousness and urgency it deserves.”

In an incoherent and rambling response to questions from GroundUp, which he also shared widely on WhatsApp, Sithathu denied that the SIU was investigating him.

“If I may indulge you on this though ? is that all the funding that the Gospel Music Association has managed to successfully acquire when we were very active then as an organisation is that ALL WAS ABOVE BOARD. We applied and were successful, ran programmes and benefited our members at that time,” he said. DM

First published by GroundUp.

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‘Criminal syndicate’