Prominent South Africans could be in hot water after ongoing Special Investigating Unit (SIU) investigations into the National Lotteries Commission (NLC) revealed potential misappropriation of R1.4 billion in public funds through corrupt activities.

The second phase of the SIU investigation was made before Parliament’s Portfolio Committee on Trade and Industry on Wednesday, February 14, 2024, bringing attention to important discoveries that are significant in South Africa’s ongoing battle against corruption.

The report specifically focuses on individuals of high prominence who have been implicated, as well as the potential financial losses that may have occurred.

Award-winning actress, Moiteri “Terry” Pheto, played a significant role in one particular case, where the NLC allocated a significant amount of money to a non-profit organization for a chicken farm project. However, there are indications that the funds may have been misappropriated.

“In the presentation, SIU revealed new investigation findings. One of the findings is related to award-winning actress, Moiteri Pheto, unduly benefitting once again from the NLC grant funding. The NLC approved grant funding of R5 million to Zibisibix Non-Profit Company for a chicken farm in December 2018. After receiving the R5 million, money [was] moved from the account,” said SIU spokesperson Kaizer Kganyago, in a media statement.

According to Kganyago, a payment of R140,000 was made to Black Planet Trading Director Thula Sindi, R253,000 to Tsoseletso, which under Pheto’s directorship, R315,000 to her sister Dimakatso Pheto, R252,400 to a vehicle dealership and R209,500 to an agricultural supplier.

“The farm was purchased for R850,000, and the SIU found that the former chairperson of the NLC board Professor Alfred Nevhutanda signed the offer to purchase the farm in the Vaal area. Furthermore, the evidence that SIU gathered revealed that the farm was purchased for the benefit of Dimakatso Pheto. The case has been referred for civil litigation for recovery and criminal referrals are being prepared.

“The SIU also presented to Parliament how the South African Youth Movement (SAYM) applied for grant funding on behalf of the Presley Chweneyagae Foundation, which belongs to award-winning actor Presley Chweneyagae. The main purpose of the application was for the Take Back the Future Musical, Documentary and Poetry Arts programme. The NLC approved a grant funding of an amount of R15 million,” he said.

The SIU stated that a significant portion of the funds went to a travel agency owned by the spouse of a former NLC official.

“From the R15 million, R2,999,967.00 was transferred to the Iron Bridge Travelling Agency and Events in August 2016. Iron Bridge Travelling Agency and Events is owned by the former NLC Chief Operating Officer, Phillemon Letwaba’s wife, Rebotile Malomane. In May 2017, a further R950,190.00 was transferred to VNMM Consulting Engineers CC. VNMM Consulting Engineers is owned by Prof Nevhutanda’s son-in-law, Meshack Makhubela. On 25 May 2017, an amount of R500,000 with a reference plot purchase was transferred to conveyancing attorneys. From the balance of R450,190.00, Prof Nevhutanda received R100,000.00 for a bus purchase and a further R60,000 for a funeral and debit orders for a car finance account,” Kganyago said.

Kganyago added that the looting also disadvantaged an NGO that was intended to empower women in Marikana, North West, which received a substantial amount of funding, totaling R16.5 million, for a chicken farm project.

“The application was adjudicated, and the grant funding for the value of R13 million was awarded to an NPO and was to be paid in two tranches of R7 million and R6 million. In November 2020, the hijacked NPO made an application for additional funding and received a further R3.5 million. The SIU’s investigation revealed that a shelf company named Silverlite Trading bought the land in Marikana for this project for R400,000. Adv. William Huma, a former NLC board member, is the current sole director of Silverlight.

“The SIU went on a site visit and found that the farm was well-built and completed. The chicken farm contains a workers’ house, guard house, egg packaging and storehouse, and chicken egg production house, and there is a borehole. However, since the chicken farm is not in operation, it is being vandalized, and some of the electric cables and solar panels are stolen from the farm,” said Kganyago.

The SIU has taken action by making eight criminal referrals to the National Prosecution Authority and 11 disciplinary referrals to the NLC.

The SIU’s yet to be concluded investigation has thus far revealed the following:

• Governance failures: These findings highlight the potential for misappropriation of public funds and the need for stronger oversight mechanisms.
• Reputational harm: The participation of well-known individuals can have a negative impact on the NLC’s standing and the trust of the public.
• Policy implications: It is crucial to thoroughly investigate any instances of misconduct, but it may also be necessary to consider broader policy changes in order to prevent similar incidents from happening in the future.

Importance of ethical conduct: These revelations highlight the significance of maintaining ethical standards in organizations that handle public funds.