The Special Investigating Unit (SIU) has secured a judgment of the Special Tribunal ordering the South African Sports Confederation and Olympic Committee (SASCOC) and several associated parties to repay almost R25 million unlawfully diverted from a National Lotteries Commission (NLC) grant. 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. The judgment follows 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.
On 7 July 2016, SASCOC applied for a grant of R34.83 million from the NLC as a conduit for the Mshandukani Foundation. This came after the Mshandukani Foundation was registered as a nonprofit company (NPO) on 16 February 2016 and opened a bank account on 12 April 2016. The investigation also uncovered 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, SASCOC assisted Mshandukani in securing funding from the NLC.
On 13 July 2016, the funding was approved within six days and transferred to SASCOC on 20 July 2016. Subsequently, after receiving funding from the NLC, SASCOC transferred R24.83 million to the Mshandukani Foundation in three tranches between 21 and 27 July 2016 and retained R150,000 for “services rendered”. The investigation found that the Mshandukani Foundation did not qualify for funding, as it was a newly established NPO and lacked the required annual financial statements.
Protecting the public interest and assets through prevention measures and systemic investigations to eradicate fraud, maladministration, and corruption. Financial analysis revealed that substantial portions of the grant were transferred to various entities by the Mshandukani Foundation, including:
- R15.35 million paid to Ironbridge Travel Agency between 22 July and 28 September 2016.
- R7.23 million paid to Mshandukani Holdings between 22 July 2016 and 6 March 2017.
- R2 million paid to Ndzhuku Trading between 23 and 28 July 2016.
In addition, on 22 July 2016, the Mshandukani Foundation paid a total of R240,000 to several beneficiaries under the reference “SASCOC Events”, including:
- Benza Consulting – R80,000.
- Imbizo Events – R85,000.
- Koleka Music Productions – R30,000.
- Minenhle 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, their relatives, and associates.
Among the payments identified were:
- R450,000 paid to Letwaba.
- R600,000 paid to a former NLC official in legal.
- R3 million paid to Mosokodi Business Trust, an entity linked to Letwaba.
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.
The Special Tribunal has since 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. 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. Protecting the public interest and assets through prevention measures and systemic investigations to eradicate fraud, maladministration, and corruption.
SASCOC and Maharaj were directed to jointly and individually repay R150,000 to the SIU. Payment by one will clear the debt for both. 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, 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 machinery 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 NLC and the conduct of NLC officials, and to recover any financial losses suffered by the State. The Tribunal orders form part of the implementation of the 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.
Enquiries:
Selby Makgotho Spokesperson
Special Investigating Unit Cell: 083 718 6128
Email: siumedia@siu.org.za
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