The Special Investigating Unit (SIU) has secured a major legal victory after the Special Tribunal ordered the South African Sports Confederation and Olympic Committee (SASCOC) and several other respondents to repay nearly R25 million that was unlawfully diverted from a National Lotteries Commission (NLC) grant intended to support sport development and South Africa’s 2016 Rio Olympic campaign.
The Tribunal ruled that the R24.98 million payment made by the NLC to SASCOC was unlawful and set the grant aside, finding that it had been tainted by misrepresentation, maladministration and unlawful enrichment.
The ruling follows an extensive SIU investigation that uncovered how funding earmarked for a Rio Olympics roadshow campaign and programmes aimed at addressing challenges facing youth and sports organisations was allegedly channelled into a network of companies and individuals linked to a former senior NLC official.
According to the SIU, SASCOC applied to the NLC on 7 July 2016 for a grant worth R34.83 million, acting as a conduit for the Mshandukani Foundation.
However, investigators found that the foundation had only recently been established. It was registered as a non-profit organisation on 16 February 2016 and opened a bank account less than two months later, on 12 April 2016.
The investigation also uncovered evidence suggesting that the identities of two women—a receptionist and a geologist intern employed by Mshandukani Holdings (Pty) Ltd—had been used without their knowledge or consent to register the foundation. Their signatures were allegedly forged despite neither woman having any connection to SASCOC or the foundation.
Despite these irregularities, SASCOC assisted the Mshandukani Foundation in securing funding from the National Lotteries Commission.
The grant application was approved within six days, with the NLC authorising the funding on 13 July 2016 before transferring the money to SASCOC a week later.
Between 21 and 27 July 2016, SASCOC transferred R24.83 million to the Mshandukani Foundation in three separate payments while retaining R150,000 for what was described as “services rendered”.
The SIU investigation concluded that the foundation did not qualify for NLC funding because it was a newly established non-profit organisation that did not meet the mandatory requirement of producing annual financial statements.
Financial investigators traced how the money moved through several companies after reaching the foundation.
According to the SIU, R15.35 million was transferred to Ironbridge Travel Agency between July and September 2016, while another R7.23 million was paid to Mshandukani Holdings. A further R2 million was transferred to Ndzhuku Trading.
On 22 July 2016 alone, the foundation paid R240,000 to several beneficiaries under the reference “SASCOC Events”. These included Benza Consulting, Imbizo Events, Koleka Music Productions and Minenhle Dlamini.
The SIU’s financial analysis further revealed that several companies paid by Ironbridge Travel Agency were linked to former NLC Chief Operations Officer Philemon Letwaba, his relatives and associates.
Among the transactions identified by investigators were a payment of R450,000 directly to Letwaba, R600,000 to a former NLC legal official and R3 million to Mosokodi Business Trust, an entity linked to Letwaba.
Investigators alleged that Ironbridge Travel Agency, owned by Karabo Charles Sithole, who is related to Letwaba, received R15.35 million that was ultimately spent on purposes unrelated to the objectives of the Olympic grant.
gInstead of supporting sports development, the SIU said the money was used to purchase vehicles and livestock, pay panel beaters, cover network installation costs, finance décor services, and enrich Letwaba, members of his family and associates.
The Special Tribunal has now ordered all respondents, except the two women whose identities were fraudulently used, to repay the R24.83 million jointly and severally to the SIU.
Those ordered to repay the money include SASCOC, its former Chief Financial Officer Vinesh Maharaj, the Mshandukani Foundation, Iphi Lukoko, Pretty Shandukani, Mashudu Shandukani, Benza Consulting, Ironbridge Travel Agency, Karabo Charles Sithole, Koleka Music Productions, Mshandukani Holdings and Ndzhuku Trading.
The Tribunal found that the two women whose identities had allegedly been stolen were innocent victims and had not participated in the scheme.
It also noted that celebrity, Minenhle Dlamini and Imbizo Events had already entered into settlement agreements with the SIU and repaid the R50,000 and R85,000 they had received.
Separately, SASCOC and its former Chief Financial Officer were ordered to jointly repay the R150,000 retained by the organisation, with payment by either party settling the debt.
In a strongly worded judgment, the Tribunal found that SASCOC had been complicit in the scheme and had played a role in facilitating the unlawful diversion of public funds.
The ruling builds on earlier successes by the SIU. Last year, the Tribunal granted a preservation order freezing two luxury properties in Centurion linked to Mashudu Shandukani and his wife, Pretty Shandukani.
The Tribunal also froze a high-value Powerstar drilling borehole machine worth R1.7 million that investigators believe was purchased using funds meant for the Rio Olympics campaign and linked to Letwaba.
The SIU investigation forms part of a broader probe authorised by President Cyril Ramaphosa under Proclamation R32 of 2020 into allegations of corruption and maladministration at the National Lotteries Commission.
The SIU said the Tribunal’s ruling represents an important step in recovering public funds lost through corruption and enforcing accountability for those involved in the unlawful diversion of state resources.
In line with the Special Investigating Units and Special Tribunals Act, the SIU said any evidence of criminal conduct uncovered during the investigation will continue to be referred to the National Prosecuting Authority for possible prosecution.
