Lottery official’s pension frozen by Special Tribunal

A former National Lotteries Commission official implicated in corruption and found guilty in an internal disciplinary hearing of “gross misconduct” cannot touch his pension money, the Special Tribunal has ruled. Illustration: Lisa Nelson

• A former National Lotteries Commission official will not be allowed to access his pension.
• Sanele Dlamini was found guilty of gross misconduct for approving a R3-million grant without proper oversight
• The Special Tribunal froze his pension fund pending the outcome of the Special Investigating Unit’s bid to recover the money.
• Dlamini signed off on payments to Motheo Sports Foundation based on falsified progress reports.

A former National Lotteries Commission (NLC) official, who was found guilty in an internal disciplinary hearing of “gross misconduct”, cannot touch his pension money, the Special Tribunal has ruled.

Sanele Dlamini, formerly NLC acting chief operating officer, is accused of signing off on a R3-million payment to the Motheo Sports and Entertainment Foundation, which had in total been granted R9-million by the NLC in 2021.

After the first R3-million was paid, Dlamini authorised the payment of a second tranche of R3-million without conducting the proper oversight. The final tranche was stopped when a monitoring and evaluation site visit revealed that nothing had been done on the property, which was being used as a dumping ground.

The NLC is now attempting to get the money back from those it believes are responsible.

In spite of strong objections by Dlamini, President of the Special Tribunal Judge Margaret Victor has granted an order in favour of the Special Investigating Unit (SIU). She froze Dlamini’s pension, held by Liberty’s Corporate Selection Suite of Umbrella Funds, pending the outcome of further proceedings.

The SIU claimed that if Dlamini was allowed to access his pension monies, there would be nothing left should the NLC be successful in its bid to claim back its money from him.

The funding to Motheo was granted in April 2021. The first tranche of almost R3.6-million was not used for the funded project, but instead shared amongst several people and entities as an “undue gratification”, Judge Victor wrote.

She said this formed part of the SIU’s pleaded case against some 16 people, including Dlamini.

In terms of the grant agreement, after the first payment any further payments would only be made upon receipt of satisfactory and approved progress reports.

Dlamini and a Ms Maodi (who had links to the owner of Motheo) had co-signed approval of the progress reports, authorising the payment of the second tranche of R3-million.

It later transpired that no work had been carried out on the site at that time. The reports were a “complete fabrication”.

Judge Victor said that in December 2023, the NLC instituted disciplinary proceedings against Dlamini. Various findings were made against him. He had not visited the site prior to approving the progress report, and he had failed to properly review all the supporting documentation. He was found to have acted dishonestly and with gross negligence. He was dismissed.

The SIU contended that its right to interdict the payout of Dlamini’s pension was founded in the Pension Funds Act, which allowed an employer to take pension monies in respect of damages caused by reason of theft, dishonesty, fraud or misconduct.

Dlamini claimed that the SIU could not rely on this, because he had not been found guilty of those charges.

But, said Judge Victor, the finding by the disciplinary inquiry that he was guilty of “gross negligence” referred to an element of dishonesty, and Dlamini had enabled fraudulent activities.

She said she was dealing with an issue of preservation, not final forfeiture and “at this stage there is an overwhelming body of evidence to bring his conduct within the provisions of the Act”.

Dlamini, however, argued prejudice. He said the SIU “knows very well who the actual culprits are”, and yet it was going after him because he was a “soft target”. The SIU must recover the money from them, he said.

He also claimed the SIU’s case against him was flawed because it was claiming the entire R6-million from him, when he was only linked — “albeit wrongly” — to R3-million.

Dlamini claimed he had done no wrong and he was a victim of fraud. He said he had based his approval of the progress report on an engineer’s report, the financial report, visuals showing work in progress on the site, and invoices for expenditure and bank statements. He was in no position to detect that a fraud was being committed and had no reason to believe that the documents were falsified.

Judge Victor said to demonstrate that he was not in “cahoots”, he said he had visited the site in November 2022 and advised that the grant be withdrawn and submitted to the finance department for recovery. He also said he had not benefited from the fraud.

The SIU, however, said it was not for the tribunal to weigh up the merits of the case at this stage. What was undisputed was that the money was paid out pursuant to Dlamini’s report. He did not assess the veracity of the report and there was clearly an element of dishonesty. This was a solid basis to withhold the pension fund from him in the interim.

Judge Victor, in her assessment, said it had been established that “there is a real prospect that any judgment obtained in the main application might be hollow”, should Dlamini access the pension funds now.

She said Dlamini had not been able to contradict that view.

“The public interest in this matter is also an important consideration. Money belonging to the state has been lost,” she said.

She said while she made no findings on the merits of the main application, there were “prospects of success”.

“The money is not lost to [Dlamini]. He will have another chance in the main application and the course of any appeals that he may pursue to defend his ownership and right to the pension fund,” she said, granting the interim interdict.

She also ruled that an assessment be done of how much money was in the fund within 60 days.

She gave Dlamini leave to make an application to the Special Tribunal should the value exceed the SIU’s claim against him.

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