Former Lottery Boss Personally Recommended R4.8-Million grant for Wife’s Company

• Former National Lotteries Commission chief operating officer Phillemon Letwaba personally recommended a R4.8-million grant, supposedly for a rural soccer tournament, to a company of which his wife was a director.
• R3-million of this money helped buy a luxury home for the NLC’s former board chairperson.
• Letwaba told investigators that neither he or his wife were aware of the funding application, according to a report by auditors SkX.

Former National Lotteries Commission chief operating officer Phillemon Letwaba recommended that a R4.8-million grant for a rural soccer tournament be given to a company in which both his wife and his business partner were directors.

The application by non-profit company Zibsimanzi, of which his wife Rebotile Malomane was a director, was recommended by Letwaba. It was approved, on the same day, by former NLC Commissioner Thabang Mampane.

This has come to light in leaked reports by audit firm SkX, which was hired by the NLC to investigate allegations of corruption. The reports, buried by the NLC for almost two years, are now being acted on, according to NLC spokesperson, Ndivhuho Mafela. Under the new chair of the board, Barney Pityana, the NLC is reviewing its entire funding process.

The Zibsimanzi grant was processed in just eight days and R3-million of the funding was diverted, via a firm of consulting engineers, to help pay for a R27-million luxury home for former NLC board chairperson Alfred Nevhutanda. Letwaba told SkX that neither he nor his wife were aware of the application by Zibsimanzi.

Letwaba resigned with immediate effect in August, shortly before he was due to appear at a disciplinary hearing to answer charges of abusing his position to enrich himself and his family. Mampane also resigned with immediate effect a month later, after the Special Investigating Unit questioned her about how almost R4-million in Lottery funding from a grant for a Limpopo school had been used to pay for her luxury home in a golf estate in Hartbeespoort in North West.

Fraudulent

Zibsimanzi had “submitted fraudulent documents” — financial statements and a Memorandum of Incorporation — in its application, said SkX. The fact that Letwaba’s wife was also a director of the company had not been disclosed in the application.

Themba Mabundza, Letwaba’s co-director in several businesses and also a director of Zibsimanzi, is one of two people whose names appear on the grant application. Mabunza was Letwaba’s business partner in two other companies. He was also a director of another company, Life for Impact, which also benefited handsomely from Lottery funding.

“Both Zibsimanzi and Life for Impact received grants in 2017 within six months apart, totalling R14,906,800,” SkX said. Letwaba and Mabundza had signed the Life for Impact grant agreement on the same date, SkX said.

Eye-watering amounts

Zibsimanzi’s application claimed that the soccer tournament, in Phalaborwa, Limpopo, would involve 3,000 people — 2,000 youth and 1,000 women — from “towns and townships” in the province. Participants would include teams of older women, Zibsimanzi chairperson Judith Mashaba said in the hand-written, illegible in parts, application.

The tournament was intended to “motivate people to stay alive during the festive season” and “also motivate elderly people to keep exercising and keep physically fit and healthy”. There would be 30 paid staff and 50 volunteers involved, Mashaba said in the application.

The R4.9-million budget, submitted for the four-day soccer tournament included some eye-watering line items, including R1.2-million for prizes, R500,000 for “event management” and R380,000 for “sound and stage” and “DJs and musicians”.

The budget also made provision for R150,000 each for transport and accommodation, R30,000 for “flowers and decorations” and R285,000 for catering.

Zibsimanzi’s full grant was paid out within days of the funding agreement being approved, Special Investigating Unit (SIU) Chief National Investigations Officer Leonard Lekgetho told Parliament in September. A total of R3-million was then transferred in November 2017 to MDU Consulting Engineers, one of several companies which chipped in to help pay for Nevhutanda’s luxury home and furniture.

The SIU has obtained a preservation order from the Special Tribunal freezing the house and its furniture.

Hiding behind lawyers

SkX battled to get information from Zibsimanzi. The frustration of SkX’s investigators is clear from correspondence with Zibsimanzi’s lawyers, Dinana Reid Inc, which is included in the report to the NLC.

After unsuccessful attempts to get face to face interviews to get clarity on the company’s income statements, SkX prepared written questions, and the NLC wrote to Zibsimanzi’s lawyers invoking clauses in the Lottery grant agreement, to try to force them to disclose the requested information and submit to interviews.

In one of the questions, SkX pointed out that a clause in the grant agreement with the NLC specifically asked whether any of the members of Zibsimanzi had “any relationship (personal or business) other than as the applicants of the grant with any official of the NLC”. And, referring to a GroundUp report that revealed a relationship between Letwaba and Malomane, SkX asked: “Does Rebotile Malomane have a relationship with Phillemon Letwaba other than as the applicant of the grant, but more on a personal capacity?”

Zibsimanzi’s directors never responded.

Right of reply

Letwaba did not respond to GroundUp’s questions. Malomane confirmed that she is a director of Zibsimanzi but said: “I was not aware of any application for funding for the organisation.”

“I am also not aware, nor was I made aware, about the operations of the organisation,” she said. “I run multiple businesses that require my time and attention. I am not aware of the internal operations at NLC and therefore I cannot comment on what was presented to my husband at the time of recommendation. As to how the money was used I suggest you engage Mr. Mabundza and Ms. Mashaba.”

Mabundza, responding via WhatsApp to a request for comment said: “I am afraid I cannot comment on the SIU report, I have neither seen it nor read it. I don’t know much about MDU’s financial affairs, the people they paid and what were the reasons for payments. I am also not in a position to comment on [the] SkX investigation, and its findings.”

MDU’s attorney, Pfumani Ndlovu, said: “The SIU have placed this matter before the courts and I cannot comment on your questions.”

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