SIU applies to extend lottery corruption probe
Department of Justice says a decision is “expected” by month-end
The Department of Justice says a decision on the Special Investigating Unit’s application to amend the 2020 Presidential Proclamation mandating it to investigate corruption involving the Lottery and its employees, is expected by the end of February. Archive photo: Ashraf Hendricks.
- A decision on the Special Investigation Unit’s (SIU) application to amend the 2020 Presidential Proclamation is expected by the end of February.
- The original proclamation only allowed the SIU to investigate grants made by the National Lotteries Commission (NLC) between 1 January 2014 and 7 November 2020.
- The SIU is seeking a mandate to investigate lottery-funded projects that fall outside that period.
- It also wants to investigate fraud and corruption related to the NLC’s procurement of services, which was not covered under the original 2020 proclamation.
- The NLC has had new management and board since 2022 and has been assisting the SIU with its investigations.
A decision on the application by the Special Investigating Unit (SIU) for the amendment of a 2020 Presidential Proclamation mandating it to investigate corruption involving the National Lotteries Commission (NLC) and its employees, is expected by the end of the month.
This was confirmed by the Department of Justice’s spokesperson Kgalalelo Masibi. “The motivation was submitted to the Department late last year and is being prepared for submission to the Minister to recommend the authorisation of the amendment to the proclamation. A decision can be expected by the end of February 2025,” Masibi told GroundUp.
The original proclamation only allowed the SIU to investigate grants made by the NLC between 1 January 2014 and 7 November 2020. This left the SIU hamstrung when investigating fraud and corruption involving the NLC’s procurement of services and appointment of service providers, which ran to hundreds of millions of rand.
In its motivation to amend the proclamation, the SIU is seeking a mandate allowing it to investigate lottery-funded projects that fall outside the period covered by the original proclamation, since the NLC’s corruption continued after the proclamation was gazetted.
Although the SIU couldn’t directly investigate procurement, because the original proclamation did not include it, it seconded two of its officials to the NLC to assist it in its investigations into dodgy procurement.
GroundUp has also learned that the SIU and the NLC recently signed a new letter of engagement extending the relationship between the two entities by a year. Their contract expired at the end of December 2024.
The NLC’s probe, which includes the assistance of the SIU’s seconded officials and several damning investigations by independent audit companies, means the SIU will have a jump start in a probe into procurement if the proclamation is extended.
The NLC and the SIU have also been inundated with tip-offs. Many are from whistleblowers about dodgy grant and supply chain management fraud and corruption, some of which occurred after November 2020.
The 2020 proclamation includes an exception for the SIU to investigate alleged corruption that took place before or after the date of its publication …“but is relevant to, connected with, incidental or ancillary to the matters … or involve the same persons, entities or contracts”.
The SIU’s motivation also seeks a mandate to investigate fraud and corruption involving the NLC’s supply chain management and the procurement of services.
The SIU previously told GroundUp it was investigating over 700 dodgy project grants, with more tip-offs coming in. Several NLC staff are facing disciplinary charges about their alleged involvement in dodgy procurement. Others resigned after they were charged. The SIU has also reported many of those involved to the police.
In 2022 the SIU told Parliament’s Trade, Industry and Competition portfolio committee that it was investigating dodgy lottery grants valued at over R1.4-billion. Last year SIU head Advocate Andy Mothibi told the committee that the value of dodgy grants under investigation had grown to over R2-billion.
SIU spokesperson Kaizer Kganyago declined to comment on the application to extend the proclamation.
Dodgy procurement
In 2023, the Auditor-General instructed the NLC’s management to address “important internal control deficiencies identified to improve procurement and contract management”. This came after the Auditor-General’s NLC audit in 2021 uncovered more than R23-million in irregular expenditure and R36-million in accounting errors made in previous years. Things worsened the following year, with the Auditor-General’s 2022 management report on the NLC revealing nearly R57-million in irregular expenditure due to the contravention of supply chain management legislation.
Among the issues flagged in damning reports by the Auditor-General, and by auditors appointed by the NLC, were irregular expenditure on information technology and sky-high spending on lawyers. The NLC struggled to answer a written parliamentary question about its expenditure on legal fees, as key files with details of multimillion-rand litigation expenditure have vanished.
Another area of concern is the tens of millions of rand in spending on media and communications, with a disproportionate amount paid to the Sunday World newspaper.
Millions of rand in dodgy payments were also made to NLC service providers, including a R498,000 payment to service provider Neo Consulting to investigate a computer hack that never happened.
ProEthics, which advised the NLC on ethics when the organisation was overwhelmed by rampant corruption, was also used to launder payments to service providers. The NLC paid ProEthics over R28.4-million. The company, in turn, said it paid other service providers on the NLC’s instructions — including a R1.7-million payment for a flash mob that never happened.
The findings of independent investigations commissioned by the NLC’s new board and executive have been important in formulating disciplinary charges against implicated staff, including NLC company secretary Nompumelelo Nene.
Nene is charged with alleged irregularities in the appointments of and payments to several service providers. She is also accused of providing “false or incomplete information in submissions justifying deviations from procurement processes”.
Support independent journalism
Donate using Payfast
Next: Second day of protests rocks UCT campus
Previous: Teenager hitchhiking to the nearest clinic delivers her stillborn baby on the roadside
© 2025 GroundUp. This article is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
You may republish this article, so long as you credit the authors and GroundUp, and do not change the text. Please include a link back to the original article.
We put an invisible pixel in the article so that we can count traffic to republishers. All analytics tools are solely on our servers. We do not give our logs to any third party. Logs are deleted after two weeks. We do not use any IP address identifying information except to count regional traffic. We are solely interested in counting hits, not tracking users. If you republish, please do not delete the invisible pixel.