Special Tribunal directs SASCOC, CFO Vinesh Maharaj and related parties to return R25 million in NLC funds

The SIU has secured a Special Tribunal order directing SASCOC and related parties to repay nearly R25 million diverted from a National Lotteries Commission grant linked to the Mshandukani Foundation and several beneficiaries.

THE Special Investigating Unit (SIU) secured a Special Tribunal order directing SASCOC, its former CFO, Vinesh Maharaj, and related parties, to return nearly R25 million that was unlawfully diverted from a National Lotteries Commission (NLC) grant, impacting several beneficiaries, including media personality Minnie Dlamini.

In a statement on June 26, the SIU confirmed it had secured a judgment from the Special Tribunal.

The tribunal ordered SASCOC (South African Sports Confederation and Olympic Committee) and several associated parties to repay almost R25 million unlawfully diverted from an NLC grant.

SIU spokesperson Selby Makgotho said the tribunal declared the R24,98 million payment made by the NLC to SASCOC unlawful, set it aside, and found that misrepresentation, maladministration, and unlawful enrichment had tainted the grant.

Makgotho said the judgment followed an SIU investigation, which revealed that funding intended for a 2016 Rio Olympics roadshow campaign and to address challenges faced by youth and sports organisations was instead used to enrich certain individuals and companies linked to a former NLC official.

He said on July 7, 2016, SASCOC applied for a R34,83 million grant from the NLC as a conduit for the Mshandukani Foundation.

“This came after the Mshandukani Foundation was registered as a non-profit organisation (NPO) on 16 February 2016 and opened a bank account on 12 April 2016.”

He said the investigation also found that the identities of two women - a receptionist and a geologist intern at Mshandukani Holdings (Pty) Ltd - were used without their consent and their signatures forged to register the foundation, which had no affiliation with SASCOC.

Despite this, Makgotho said SASCOC assisted Mshandukani in securing funding from the NLC.

He said on July 13, 2016, the funding was approved within six days and transferred to SASCOC on July 20, 2016.

“Subsequently, after receiving funding from the NLC, SASCOC transferred R24.83 million to the Mshandukani Foundation in three tranches between July 21 and July 27, 2016, and retained R150,000 for ‘services rendered’.”

The SIU investigation found the Mshandukani Foundation did not qualify for funding, as it was a newly-established NPO and lacked the required annual financial statements.

Makgotho said financial analysis revealed that substantial portions of the grant were transferred to various entities by the Mshandukani Foundation.

These include R15,35 million paid to Ironbridge Travel Agency between July 22 and September 28, 2016; R7,23 million paid to Mshandukani Holdings between July 22, 2016, and March 6, 2017; and R2 million paid to Ndzhuku Trading between July 23 and July 28, 2016.

He said in addition, on July 22, 2016, the Mshandukani Foundation paid a total of R240,000 to several beneficiaries under the reference “SASCOC Events”.

These include Benza Consulting - R80,000; Imbizo Events - R85,000; Koleka Music Productions - R30,000; and media personality Minenhle “Minnie” Dlamini - R50,000.

“The financial investigation further established that some companies paid by Ironbridge Travel Agency were linked to former NLC chief operations officer Philemon Letwaba, his relatives and associates,” he said.

Makgotho said among the payments identified were R450,000 paid to Letwaba, R600,000 paid to a former NLC official in legal fees and R3 million paid to Mosokodi Business Trust, an entity linked to Letwaba.

He said the SIU found that the R15.35 million transferred to Ironbridge Travel Agency, owned by Karabo Charles Sithole, who is related to Letwaba, was used for purposes unrelated to the grant’s approved objectives.

“However, the funds were used to purchase vehicles and livestock, pay panel beaters, cover network installation services, fund decor and enrich Letwaba, his family and associates.”

Meanwhile, Makgotho said the Special Tribunal had ordered all respondents, except for the two women whose identities were fraudulently used, to repay, jointly and severally, to the SIU the amount of R24,83 million that was unduly paid to them.

“This includes SASCOC and SASCOC’s former chief financial officer, Vinesh Maharaj, Mshandukani Foundation, Iphi Lukoko, Pretty Shandukani, Mashudu Shandukani, Benza Consulting, Ironbridge Travelling Agency, Sithole, Koleka Music Production, Mshandukani Holdings and Ndzhuku Trading.”

According to him, the tribunal noted that the two women whose identities were forged were not complicit, and that Dlamini and Imbizo Events had already concluded settlement agreements with the SIU to reimburse portions received and paid the R50,000 and R85,000, respectively.

In December last year, IOL News reported that Dlamini hit back at the SIU) statements linking her to irregular NLC funds. She denied any wrongdoing in the case.

“SASCOC and Maharaj were directed to jointly and individually repay R150,000 to the SIU. Payment by one will clear the debt for both.”

He said in the judgment, the tribunal found that SASCOC was complicit in the scheme to “siphon” funds from the NLC and played a role in facilitating the unlawful diversion of public funds.

“Last year, the SIU obtained a preservation order from the tribunal, which led to the freezing of two luxury properties in Centurion, Pretoria, linked to Shandukani and his wife, Pretty.”

The tribunal also froze a high-value R1,7 million Powerstar drilling borehole machine acquired from funds meant for the Rio Olympics campaign linked to Letwaba.

The SIU was authorised by President Cyril Ramaphosa in terms of Proclamation R32 of 2020 to investigate allegations of corruption and maladministration in the affairs of the NLC and the conduct of NLC officials, and to recover any financial losses suffered by the state, he said.

Makgotho said the tribunal orders formed part of the implementation of SIU investigation outcomes and consequence management to recover financial losses suffered by state institutions due to corruption or negligence.

“In line with the Special Investigating Units and Special Tribunals Act 74 of 1996 (SIU Act), the SIU will refer any evidence of criminal conduct uncovered during its investigation to the National Prosecuting Authority (NPA) for further action,” he said.