Millions in Jozi FM lottery grants have gone missing

The Special Investigating Unit is investigating over R34-million in lottery grants paid to the Soweto Media Resources Centre, which operates Jozi FM radio station. Illustration: Lisa Nelson

• The Special Investigating Unit (SIU) is investigating over R34-million in lottery grants paid to the Soweto Media Resources Centre, which operates Jozi FM radio station.
• Station CEO Mpho Mhlongo claims there is no proper accounting for millions in grants allocated over ten years ago, money he says was meant for a multimedia centre in Soweto which has never materialised.
• Board chair Rapitse Montsho says the funds were used for a documentary project called “Freedom Was Not Free”.
• Two board members have resigned, citing loss of confidence in the board chair. Station management has lodged complaints of fraud and corruption with police and the SIU.

Lottery grants totalling over R34-million paid to the Soweto Media Resources Centre (SMRC), a non-profit company operating as radio station Jozi FM, are under investigation by the Special Investigating Unit (SIU).

The investigation was launched after a simmering row between Jozi FM’s Board and station management became public on 18 October at a media conference called by the CEO and senior staff.

Jozi FM CEO Mpho Mhlongo claims that there is no proper accounting for a R24-million grant, allocated over ten years ago, and he has lodged a complaint of fraud and corruption with the Orlando Soweto SAPS and the SIU.

NLC payments

But according to the NLC’s annual reports R24-million was paid in two tranches: R12-million in August 2013 and R12-million in April 2014. Then a further R10.8-million paid in October 2015, bringing the total amount paid to R34.8-million.

According to a source with direct knowledge of the details of the grants, this money was intended for a “museum” and the launch of a “documentary/coffee table book”.

All funds were paid to SMRC under NLC project number 72744.

SMRC was also awarded a grant of R407,400 in 2016 for a different project – “South Africa song book heritage documentation and workshops”. An initial tranche of R135,000 was approved for “office admin/personnel cost”, but the second tranche was not disbursed as the organisation failed to submit a progress report, GroundUp was told by a source with direct knowledge of the grant.

The NLC has handed all its documentation relating to SMRC funding to the SIU, two different sources confirmed. DA MP Toby Chance, whose constituency is Soweto North, said in a statement that NLC Commissioner Jodi Scholtz also confirmed this to him.

Chance said, “Since Jozi FM station management went public with its allegations, two board members have resigned, citing loss of confidence in the board chair and distancing themselves from the alleged financial transgressions.”

“Station management has assured the DA that the station is financially solvent and has never depended on the Lotto grant money to sustain its operations.”

“The people of Soweto deserve a radio station servicing its diverse communities untainted by allegations of corruption and embezzlement,” said Chance.

He called on the SIU to finalise its investigation without delay and, “if criminal activities have occurred, to press charges against the offending individuals without delay”.

Board chair under fire

At the media conference, CEO Mhlongo took aim at current Jozi FM board chairperson Rapitse Montsho, who was appointed a director of SMRC in 2012 and chairperson two years later.

Mhlongo says management was told during regular meetings that the NLC had allocated R12-million for a media resource centre and a site had been identified within the Jabulani Precinct.

But board chair Montsho has a different version of events and the purpose of the NLC funds. He told GroundUp that SMRC had merely acted as a conduit for Lottery funds on behalf of an organisation called Legacy, for a project called “Freedom Was Not Free”. He told Newzroom Afrika, the project produced, distributed and archived documentaries in which ageing veterans of South Africa’s liberation struggle were interviewed.

He told GroundUp the total amount deposited into the project’s bank account by the NLC was significantly less than R34.8-million.

He said all funding received from NLC had been properly accounted for.

“We will provide everything: where the money went, what it did, and what the agreement was,” he said.

Asked for further details of the Legacy project, including links to videos that were produced and how the lottery money was spent, he declined to explain.

“We’ll wait for the SIU and will give them all our reports on what the money is, all the equipment that was bought, all the documentaries that we’ve produced, everything,” he said. “You’ve got to travel, you’ve got to digitise … and you’ve got to have logistics. We did it in three years.”

GroundUp did an extensive search and could find no public trace of the “Freedom Was Not Free” project documentaries as described by Montsho.

“The chairman’s project”

CEO Mhlongo and head of programmes Tshepo Makgopa say the board informed them in 2013 that the lottery funding was for the construction of a multimedia centre in Soweto.

Mhlongo told GroundUp that he was one of three signatories on an account that was opened specifically for the lottery funds. But, he claims, money was withdrawn from the account without his knowledge, and he does not know how that money was spent.

According to Mhlongo, the station only has records of the first R12-million tranche and was left with a tax debt owing on that amount.

He said records from the account opened for the NLC funds shows “various amounts” were paid to different service providers, including architects.

“In my opinion, the money is no longer there; it’s been used up,” said Mhlongo.

Meetings and workshops had been held to discuss the station’s needs. The first meeting was after the initial payment and these continued twice a year until the covid pandemic. Plans for a building were also drawn up. Management were shown these on a laptop but not given a link to it or copies.

Mhlongo said that “not much” information was shared about progress, as it was “the chairman’s project”, and no timeframe for when it would start and finish was ever communicated.

He said they received “different excuses” for the lack of progress. He never saw the proposed site. Later, he was told there were “issues” with the design and getting plans approved by the City of Johannesburg, which owns the Soweto Theatre.

When he realised three years ago that so many years had passed with nothing to show, he raised it with Montsho.

“It’s been a long time, we’ve been harassed and intimidated, but we were not getting answers. Eventually, there was nothing else we could do but go public,” said Mhlongo.

He said he was suspended and almost lost his job for raising questions and going public. He said he was told that his contract had expired, and was only reinstated after consulting with lawyers.

“We are dealing with a man who knows it all; he is in control, has access to the highest office at Luthuli house, and claims to be a veteran MK soldier. He’s been there, a top rank in the ANC, and he is untouchable. From time to time, he reminds us that he’s a soldier,” said Mhlongo.

Meanwhile, Makgopa, head of programmes, said he was arrested earlier this year after the chairperson opened a case of intimidation and harassment against him.

There was no evidence or anyone aware of the supposed resource centre when GroundUp visited the Jabulani precinct recently.

Jozi FM managers say there is nothing to show for the lottery millions - no building and, apparently, no land allocated within the precinct.

Not the only Soweto lotto mystery

Earlier this year, GroundUp reported on the stalled completion of the National Academy of Performing Arts (NAAPA), headed by music icons Caiphus Semenya and his wife, Letta Mbuli.

The project, also inside the Jabulani Soweto Theatre complex, is also under investigation by the SIU. Six years later, and despite lottery funding of R15-million, as well as R10-million more in government funding, the Academy is yet to open its doors.

Semenya recently told GroundUp that a further R28-million was needed to complete phase three of the project, including equipping recording studios. His foundation has struggled to secure the additional funds, he said.

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