24 July 2026
The Mshandukani Foundation was awarded R4-million by the National Lotteries Commission to sink boreholes for Eastern Cape schools and clinics. But the boreholes already existed. Instead, the money was used for personal enrichment by lottery officials and their associates. Illustration: Lisa Nelson
A dodgy foundation received a R4-million lottery grant in 2019 to install boreholes at rural Eastern Cape schools and clinics, but a probe by the Special Investigating Unit (SIU) has found that the boreholes had already been constructed three years earlier.
The Mshandukani Foundation, a registered non-profit organisation (NPO), applied in February 2019 for grant funding to implement a community development project to provide clean water to communities in the Eastern Cape.
In its funding application, Mshandukani Foundation chairperson Pretty Shandukani said the project would benefit 8,015 vulnerable people and create 15 part-time jobs. The project budget also included operational costs, including salaries, stipends, audit fees, bank charges and travel expenses.
Instead, the Special Tribunal found that most of the funds paid to the Mshandukani Foundation for the boreholes project were diverted to private companies and personal bank accounts belonging to members of the foundation.
In addition, R500,000 was paid to a company owned by Rebotile Malomane, the wife of former National Lotteries Commission (NLC) COO Phillemon Letwaba, who signed off on the grant.
This is not the first time that Letwaba, who resigned under a cloud in 2022, facilitated lottery grants to his wife. GroundUp previously reported how Letwaba had personally recommended that the NLC give a R4.8-million grant, supposedly for a rural soccer tournament, to a company of which Malomane was a director.
Earlier last month, the Mshandukani Foundation was the subject of another Tribunal judgment involving a R25-million Olympic Games send-off in 2016. The event never happened. Instead, most of the funds were distributed to a network of companies, including several linked to Letwaba. Letwaba and former NLC legal head Tsietsi Maselwa also benefited in their personal capacities.
As was the case with the Olympic grant, the SIU discovered that the names of the same two employees of Mshandukani Holdings, a geologist intern and a receptionist, had been listed as members of the foundation without their knowledge or consent.
Tribunal judge Brian Mashile, in his judgment delivered on 13 July 2026, said, “the SIU has referred this Tribunal to three additional matters involving parties implicated in the present proceedings.”
“Ms and Mr Shandukani are significantly implicated in fraudulent transactions in those matters”, Mashile said.
In a final report submitted to the NLC on 5 November 2019 on behalf of the Foundation, Pretty Shandukani said that the borehole installation project had been completed. In an earlier October 2019 report, she had stated that seven boreholes were installed at several schools and clinics.
But the SIU found that no boreholes were installed by the foundation at these locations using the lottery grant. Instead, they were installed in 2016 — years before the foundation got the grant — by Mshandukani Holdings, owned by Mashudu Shandukani and his wife, Pretty.
This was confirmed by affidavits from five principals of the schools submitted to the tribunal by the SIU.
Judge Mashile said the acting district director of the Chris Hani Department of Education confirmed that the department received reports from the relevant schools that the boreholes were drilled in 2016 by Mshandukani Holdings.
“Neither the foundation respondents nor Letwaba, Ironbridge, and Malomane [companies that also benefited] have provided any account of how the grant funds were utilised. No vouchers, bank statements, or contracts with the subcontractors who allegedly performed the work have been furnished. In this regard, the answering affidavit contains bare averments which are not worthy of reliance.”
“…the overwhelming, undisputed and credible evidence before this tribunal firmly establishes that the boreholes were constructed in 2016.”
The Tribunal ordered that:
“The bank statements of Preldon Construction reveal that a portion of these grant funds, received from the NLC through the foundation, were subsequently transferred into the personal bank account of Ms Shandukani, as well as into the account of Mshandukani Holdings, a company owned and controlled by Mr Shandukani,” the judge found.
“The remaining funds were utilised for the benefit of Preldon Construction.”
Once the NLC paid R4-million into the Foundation’s bank account, which had a balance of just R6,000 on 20 March 2019, the money started flowing out. In total, Preldon Construction received R3.6-million from the Foundation.
After receiving the funds from the foundation, Preldon Construction paid an amount of R500,000 to Iron Bridge, a company owned and controlled by Malomane.
The tribunal found that the NLC Pro-Active Funding Quality Assurance Committee (QAC) met on 8 March 2019 and approved a grant of R4-million for the boreholes project. The project was motivated by Marubini Ramatsekisa, then manager of grant funding projects, who played a key role in the QAC.
A week later, on 15 March, Mrs Shandukani signed the agreement on behalf of the Foundation. Letwaba, in his capacity as Chief Operating Officer of the National Lotteries Commission, signed the agreement on 15 March, and five days later R4-million was paid into the Foundation’s bank account.
Only 11 days had elapsed between the QAC approving the grant and the funds landing in the foundation’s bank account.
The QAC, which allocated hundreds of millions of rands for infrastructure projects that were never completed, was at the heart of the looting of the lottery. The decision to set it up was one of the most significant changes introduced by the previous NLC leadership to its funding policy, GroundUp found during its ongoing eight-year-long investigation into lottery corruption.
Its establishment ensured that the distributing agencies (DAs), appointed by the minister with oversight of the lottery, were excluded from the adjudication of proactively funded projects. This removed a safeguard in the Lotteries Act, meant to ensure the independence of the grant assessment and approvals process
The committee, in which Letwaba and Ramatsekisa played a key role, was given a fig leaf of respectability by the appointment of the three existing members of distributing agencies to serve on it.
The committee consisted of one member from each of the NLC’s three DAs, appointed by former Commissioner Thabang Mampane on 25 September 2018. Mampane resigned in 2022, just weeks before her tenure was due to end.
The amendments to the policy were “compiled” by Letwaba, then CFO and later COO; “proposed” by Mampane, and former board member and chair of the DA committee, William Huma. The policy’s final approval was signed by Alfred Nevhutanda, then NLC board chairperson.
Significantly, it was on their watch that the NLC was overwhelmed by corruption, with all four benefiting handsomely from funds diverted from proactively funded projects.
An affidavit by SIU Chief Forensic Auditor Humbulani Gideon Funyufunya, previously leaked to GroundUp, shines a spotlight on the committee’s work.
Based on the oral evidence of two members of the QAC, he concluded that the committee’s work was effectively controlled by Ramatsekisa and Letwaba.
“The Grant Funding Department under the leadership of the Chief Operations Officer [Letwaba] conducted the entire administrative process in the pro-active funding,” according to Funyufunyu.
This, he said, included research, identification of implementing agents and engagement with relevant stakeholders, approval or submission for approval, presentation to the Quality Assurance Committee, receiving and consideration grant recipients’ progress reports and independent engineers’ reports.
The QAC had effectively become a rubber stamp for corruption.
“It was like putting a jackal in charge of keeping the chickens safe,” one of the independent investigators, who probed Lottery corruption, told this reporter, with a wry smile.
