Lottery to lay criminal complaints against former board members

Chairperson Barney Pityana says Auditor-General must be held accountable for giving the National Lotteries Commission clean audits

By Raymond Joseph

23 November 2023

The new National Lotteries Commission board is intent on holding those who corrupted the organisation accountable. Illustration: Lisa Nelson

The board of the NLC plans to lay criminal complaints against former board members implicated in corruption, including for the rampant looting of Lottery grant funding.

The decision comes against a background of increasing frustration at the slow pace of investigations by police and the Hawks, and a lack of prosecutions by the National Prosecuting Authority (NPA).

The board’s decision to act was revealed in Parliament this week when the NLC presented its 2022/2023 annual report and second quarter performance report to Parliament’s Trade, Industry and Competition (DTIC) portfolio committee.

The new NLC board has so far shown that it intends to stamp out the corruption that plagued the organisation.

Read The Lottery: A South African good news story

NLC board chairperson Barney Pityana told MPs that they also intended to launch civil litigation against former NLC board members implicated in the looting.

Reading from a prepared statement Pityana, said: “Notwithstanding that various agencies are seized with this matter, we are of the view that ultimately the responsibility as a matter of law belongs to us as the substantive Board of the NLC.”

Therefore the NLC board had decided to:

Three former board members, former chairperson Alfred Nevhutanda, William Huma and Muthuhandini Madzivhandila, who has since died, have all been implicated in corruption involving lottery funds running into tens of millions of rands.

Minister of Trade, Industry and Competition Ebrahim Patel told the virtual meeting that he fully supported the decision to act on several fronts against former board members.

Patel made it clear that the planned actions were “not an alternative to criminal prosecution” but rather “a suite” of measures to “hold those implicated and those associated” with the looting accountable.

“We must hold accountable those who acted corruptly and also those who enabled corruption either through collusion or gross negligence in the performance of their responsibilities,” he said.

Serving on a board was not a “free lunch but a serious responsibility on behalf of the public,” Patel said, adding that amendments to the Companies Act currently before the DTIC committee would address the issue of delinquent directors.

Pityana told MPs that the current board members were aware that “in a corporate setting, we cannot completely wash our hands from the acts of our predecessor boards”.

“It is for those reasons that we believe that we are honour bound to take action when evidence surfaces that demonstrates that the actions of members of our predecessor Board were in violation of the [Lotteries] Act in that they failed to undertake their duties and responsibilities with due care, honesty, efficiency and moral character, putting at risk the organisation that they were appointed to serve,” he said.

In a telephone interview after the presentation, Pityana told GroundUp that the board’s decision to lay criminal complaints and pursue civil litigation was taken “because we are frustrated by the length of time it is taking for the normal processes of the SIU, NPA and the Hawks. Things are not moving.”

“We will go to the police with the information we have from internal investigations and from the SIU’s investigations. We will take a dossier to them”, he said.

Pityana said they would also apply to have former board members declared delinquent because neither the NPA nor SIU planned to do so.

“The long and short is that we are dealing with this within the organisation. Not only were members of the board not doing oversight work, but even those members where there is no evidence that they behaved corruptly, we are saying that they cast a blind eye to what was happening.”

Pityana was also critical of the Auditor-General, which consistently gave the NLC clean audits, despite extensive reporting - mainly by GroundUp - on the extent of the corruption involving Lottery funds.

“We are also saying that the AG over those years did not do their job. We want those people [who were responsible for giving the NLC clean audits] held to account”, he said. “It is inconceivable that the first time the AG reported problems was two years ago. They cannot just wash their hands. The AG must investigate their own staff who were involved in these audits.”