The Nationwide Lotteries Fee has funded three tasks in Kuruman. After two years two of them are incomplete and the third challenge consists of a library with empty cabinets and a museum with one exhibit. Photograph: Raymond Joseph/GroundUp

Undeclared conflicts of curiosity and incomplete or shoddy building characterise many tasks funded by the Nationwide Lotteries Fee (NLC). Our analysis uncovers what’s probably solely a fraction of the questionable grants involving Lottery cash.

Over the following week, GroundUp will publish tales describing how firms linked to Phillemon Letwaba, the NLC’s Chief Working Officer (COO), are concerned in Lottery offers involving tens of thousands and thousands of rands.

This follows our publication of earlier tales exposing corruption and incompetence involving NLC tasks. Letwaba’s brother was implicated in a single such challenge.

A number of methods underpin these tasks:

First, cash is directed to them making use of a 2015 modification to the Lotteries Act that permits the Minister of Commerce and Business, the NLC or its board to establish tasks to be funded with out receiving purposes. This is named proactive funding. The issue with proactive funding is that there’s usually no rigorous prior scrutiny of the tasks awarded cash by NLC officers.

Second, the tasks are sometimes primarily based in cities removed from giant cities, the place reporters are much less more likely to enterprise.

Third, the appointment of service suppliers for multimillion-rand building tasks, like building and engineering firms, is left to the recipients of the funding. In distinction to authorities departments, these tasks usually don’t have clear tender processes. The NLC’s personal audits seldom verify for conflicts of curiosity on the tasks themselves. That is regardless of laws of the Lotteries Act requiring organisations that obtain grants to obtain “items or providers” utilizing a “clear and aggressive course of”.

“The processes of the NLC are such that funded entities independently supply providers from the market to realize no matter it’s that they’ve been funded for,” the NLC’s communications head Ndivhuho Mafela stated in an electronic mail in response to questions. “Technically, due to this fact, the NLC wouldn’t concentrate on details about such service suppliers.”

And, usually, the proactive funding is given to non-profit firms with no observe document. These are fashioned by accountants or attorneys and made tax compliant. They’re then bought “off-the-shelf” and prepared for enterprise, with the unique administrators who set them up resigning and new administrators being appointed.

Kuruman’s Lottery-funded tasks

For our newest tales we visited Kuruman within the Northern Cape to research three totally different tasks: an outdated age house, a drug rehabilitation centre and a library and museum meant to have fun the life and work of sangoma, creator and African storyteller Credo Mutwa.

Virtually R60 million was granted to the three tasks however two are nonetheless beneath building virtually two years after they acquired Lottery funding, whereas the museum has a single exhibit and the library’s cabinets are empty.

Responding to a query concerning the delays in building, NLC spokesperson Ndivhuho Mafela stated: “It’s within the nature of building that you’ve got unplanned delays which influence on the general completion of the amenities. That is nonetheless reported commonly by our engineers and we’re happy with the progress on all of the amenities that we’re constructing. We now have nonetheless indicated that every one tasks needs to be handed over to the communities this 12 months.”

Hyperlinks to NLC’s COO

PKT Consulting Engineers, which is concerned within the building of Lethabong Previous Age, and the not too long ago accomplished Credo Mutwa Museum and Library, has hyperlinks to NLC Chief Working Officer Phillemon Letwaba and members of his household.

Letwaba, his spouse Daisy, and his brother Johannes, in addition to their father Oupa, who has since died, have been all administrators of PKT earlier than they resigned their directorships on March 1, 2017.

On the identical day that the Letwabas resigned, Themba Mabundza was appointed as the only real director of PKT. Mabundza, 37, is an energetic director in 54 totally different firms throughout a large spectrum of industries.

Two of the businesses of which he’s a director have acquired grants from the Lottery. One, Life for Impression within the 21st Century, was awarded R8 million on 19 April 2017, and an additional R2,106,800 simply over a month afterward 31 Could 2017, a complete of R10,106,800. The grants have been made by way of the NLC’s Arts, Tradition and Pure Heritage sector.

The primary cost to Life for Impression was made about six weeks after the acquisition of an present non-profit firm, which seems to have been purchased “off-the-shelf” as a tax compliant entity. The three authentic administrators resigned and Mabundza, Ivonne Sibongile Kheswa and Patricia Dikeledi Nkosi have been then appointed as administrators on three March 2017.

Zibsimanzi, a second off-the-shelf firm the place Mabundza is a director, acquired a R4.eight million grant from the NLC’s Sports activities sector on 21 November 2017. The grant was made about eight months after Mabundza, Rebotile Mashaba and Judith Nonhlanhla have been appointed administrators on four Could 2017.

It’s unclear what tasks the funds granted to Life for Impression and Zibsimanzi have been for. A search of each turned up no NLC-funded or every other tasks that they’re – or have been – concerned in. The NLC has not responded to our question asking for particulars.

Kaone Wethu, a second firm concerned within the building of the museum and outdated age house, additionally has hyperlinks to enterprise associates of Letwaba. One in all its former administrators, Keneilwe Constance Maboa, is both nonetheless an energetic director or has resigned a few of her directorships in a minimum of 5 firms linked to Letwaba’s household. These embody Mosadi Ditshabeng Modjadji, the place she is a nonetheless a co-director with Letwaba’s youthful brother, Thabo. She was additionally a co-director of Ironbridge Touring Company and Occasions and Redtaq with Thabo Letwaba earlier than they resigned in March and June respectively.

The present listed director of Kaone Wethu is Karabo Charles Sithole, a former director of PKT, Redtaq, and Ironbridge. These firms are or have been at one time linked to Letwaba or members of his household.

Phillemon Letwaba served because the NLC’s Chief Monetary Officer (CFO) earlier than being appointed COO in 2017. For a minimum of two years he was concurrently each CFO and the NLC’s performing government on all grants.

A leaked doc compiled three years in the past by a involved high-up NLC whistleblower emphasises the ability Letwaba wielded by means of holding these joint positions. The whistleblower additionally raised the potential for “conflicts of curiosity” and the “manipulation” of grants

“The sudden urgency of approving so many proactive funding candidates while long-standing grant agreements should not being finalised for cost are worrisome.”

In November final 12 months, GroundUp revealed how Upbrand Properties, an organization by which Letwaba’s brother, Johannes, was the only real director, signed a R15 million contract to construct a rehabilitation centre close to Pretoria. Though Johannes Letwaba subsequently resigned his directorship, Firms and Mental Property Fee information verify that he was a director on the time of the signing of the multimillion-rand contract.

Regardless of this, the NLC issued an announcement clearing its COO of any battle of curiosity. “The NLC follows strict prescribed processes and frequently encourages its workers to reveal issues of battle of curiosity the place relevant. It has since engaged people who might have been highlighted in among the points raised across the implementation and funding of the challenge [the rehab] and is happy with explanations offered.”

The NLC has additionally launched an announcement saying it acquired a clear audit for 2018/19.

Letwaba’s spouse, Daisy, and Melanie du Plessis are administrators of an organization referred to as Signature Kitchen Design that was registered on 20 September 2016. Du Plessis is the girlfriend of a controversial lawyer who’s related to firms and organisations which have acquired tens of thousands and thousands of rands in Lottery funding.

In response to questions on Letwaba, the NLC wrote: “We now have been suggested by the official that he has referred the matter to his attorneys however he has denied any battle of curiosity on this matter.”

Letwaba’s lawyer later stated in an electronic mail that Letwaba had been given inadequate time to reply to our questions, however however stated his shopper had nothing additional so as to add to the NLC’s responses. (We gave Letwaba ample time. He has had sight of the questions despatched to the NLC for a number of days. Regardless of this we gave him an extra day after receiving this letter. We now have acquired no response.)

His spouse additionally didn’t reply to questions we despatched to Letwaba’s lawyer for her.

After changing into conscious of this author’s go to to Kuruman, the NLC distributed a media assertion claiming that I had approached Lottery-funded tasks “requesting delicate info”.

And, even supposing I had recognized myself to all of the folks I spoke to in Kuruman as a journalist on task for GroundUp, the NLC alleged that I used to be falsely “claiming to be from a mine that’s working in partnership with the NLC”.

The NLC assertion added: “We encourage beneficiaries who’ve been approached on this method or by anyone claiming to be a consultant of the NLC to report this to the organisation’s fraud line.”

The South African Editors Discussion board subsequently issued an announcement condemning the NLC’s media launch.

Themba Mabundza failed to reply to questions despatched to his official PKT electronic mail tackle.

Melanie du Plessis didn’t reply to questions despatched to her by way of WhatsApp.

GroundUp will publish half two of this collection on Monday.

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