Case Study

How Lottery money was used to fund mansions for high flyers

A luxurious mountainside mansion with sweeping views of Simons Town and False Bay, owned by a trust controlled by dodgy Pretoria lawyer Lesley Ramulifho, was described as "five-star" when it was put up for auction a few years ago.

In rural Rustenburg, in North West, a magnificent boutique hotel on a property owned by a company belonging to former National Lotteries Commission (NLC) board member William Huma, lies in the picturesque foothills of the Kgaswane Nature Reserve Mountains.

And in Midrand, Gauteng, a luxury guest house with conference facilities set in a large garden with "a country feel" is owned by a company belonging to Kwaito star and music producer Arthur Mafokate.

The three properties, in different parts of South Africa, all have one thing in common: they were all bought using money from Lottery grants allocated to non-profit companies meant for good causes.

The properties were frozen after the National Prosecuting Authoritys Assets Forfeiture Unit (AFU) obtained a preservation order in terms of the Prevention of Organised Crime Act, based on evidence gathered by the Special Investigating Unit (SIU). The Act was promulgated in 1998 "to combat organised crime, money laundering and criminal gang activities." Also included in the preservation order are a luxury home in a gated estate in Pretoria owned by a trust controlled by former NLC legal manager Tsietsi Maselwa, and a nearly 14-hectare plot in Pretoria owned by former NLC board chairperson, businessman and pastor, Alfred Nevhutanda, and his pastor wife, Tshilidzi. Both of these properties were also paid for with misappropriated Lottery funds.

The SIU has been investigating corruption involving the NLC since President Cyril Ramaphosa signed a proclamation in October 2020.

In terms of the order, the owners are prohibited from "selling, disposing of, leasing, transferring, donating, or dealing in any manner whatsoever with respect to the immovable properties".

Investigations revealed how money had been misappropriated from five non-profits that had received grant funding from the NLC of approximately R56.3 million meant for community development projects, the SIU said in a statement.

These are the South African Art and Development Association (SAADA), the Matieni Community Centre, Dinosys, Zibsicraft, and Taung Cultural Music and Arts Expo.

The AFU was granted the preservation order after an ex parte application to the Gauteng High Court on 21 December last year, which was only made public on 13 January. In such an application, notice is not given to the other party but there is usually a return date when the affected party can appear to argue against the order, and also present evidence.

With the new year barely begun, the latest preservation order is a clear sign that the noose is continuing to tighten on people involved in the looting of the Lottery. This is the latest application in a series of court-ordered preservation orders, like this one, that has seen the freezing of luxury homes, properties, a farm and vehicles bought with Lottery funds.

A farm owned by Ramulifho and a luxury estate owned by a company of which former NLC board chairperson Alfred Nevhutanda is the sole director was also frozen last year. And, the pension of former NLC chief operating officer Phillemon Letwaba has also been frozen.

Democratic Alliance member of Parliament Mat Cuthbert, who has led the charge in Parliament in exposing Lottery corruption, congratulated the SIU but said that "there needs to be a greater urgency" from the National Prosecuting Authority (NPA) in charging and prosecuting members of the syndicate. "It is not enough for the funds to be recovered these criminals must be placed behind bars," he said in a statement.

The money to pay for the latest properties to be frozen was diverted from non-profit organisations (NPOs) that had been funded for a variety of projects.

Potential stakeholders may be divided into two (2) groups. Identifying at least two (2) stakeholders from the case study per each group, elaborate on the two (2) groups. You are also required to discuss each identified stakeholders responsibilities / expectations and evaluate their actions

25 Marks