It’s been almost a month since the Trade and Industry Committee requested a legal opinion on whether the National Lotteries Commission’s (NLC) refusal to disclose its grant beneficiary list was lawful. At Wednesday’s committee meeting, Duma Nkosi, chairperson of the committee, asked for a presentation on the legal opinion to be removed from the agenda because he hadn’t received feedback from Parliament’s legal adviser. 

In 2019, the NLC, for the first time in 18 years, failed to disclose its grant beneficiaries in its annual report. At a committee meeting earlier this year, the NLC’s chairperson, Alfred Nevhutanda, said it was in the best interest of the beneficiaries to not disclose them and that this was well within the law. 

The NLC’s revised position on listing beneficiaries came shortly after journalist Raymond Joseph and GroundUp exposed corruption and nepotism in lottery grants. 

On Thursday 9 July, Nkosi requested that the legal opinion presentation be removed from the agenda because he hadn’t received feedback from the legal adviser. Nkosi said he thought that he would have feedback from Parliament’s legal adviser before Wednesday’s meeting, but that didn’t happen.

Five of the ANC committee members voted in favour of removing the item from the agenda, while the DA’s Mathew Cuthbert and Dean Macpherson and the ADCP’s Wayne Thring voted against it. The EFF’s Yolisa Yako abstained. Cuthbert insisted that it was “important that we have transparency and the public know how their money is spent”.

Nkosi assured committee members that they would discuss the legal opinion at the next committee meeting this week. 

Cuthbert said the DA plans on writing to the speaker of Parliament, Thandi Modise, “to investigate Mr Nkosi’s conduct, as well as the conduct of Parliament’s legal division in their failure to provide this legal opinion to ensure MPs can do their job of oversight”.

For months, Cuthbert has been trying to get the names of 2018-2019 NLC proactive-funding beneficiaries, the 2019-2020 proactive-funding beneficiaries and the 2020 Covid-19 Relief Fund beneficiaries from the NLC.

Since the NLC has repeatedly refused to give the committee its list of grant beneficiaries, Cuthbert announced that the DA will lay charges against the NLC “for failing to carry out their duties and responsibilities as per the National Lotteries Act as well as the relevant access to information laws such as the Disclosures Act and the Promotion of Access to Information Act”.

But the NLC will be publishing the list of beneficiaries of the R150-million Covid-19 Relief Fund.

“The NLC went out on a call for applications for the Covid-19 relief fund to the amount of R150-million and received over 5,000 applications from non-profit organisations countrywide. At this stage, adjudications are underway, and allocations are still being done on the R150-million to different applicants. Therefore, the process has not been completed as yet,” said Trade and Industry Minister Ebrahim Patel.

Once the process has been completed and formal agreements are signed by the beneficiaries and payment has been made, then the NLC will release the list of beneficiaries for the Covid-19 Relief Fund, said Patel.

When the list of the 2018-2019 and the 2019-2020 proactive funding grant beneficiaries was requested by Cuthbert at a committee meeting earlier this year, Nevhutanda said that would be against the law. 

“Parliament can’t teach us to break the law, the same law that you gave us,” Nevhutanda told the committee. 

In 2019 GroundUp published a series of stories about a company that received R60-million to build a museum, a library, an old age home and rehabilitation centre in Northern Cape. The museum has a single exhibit and the library’s shelves are empty. The company that received money for these projects is a company linked to the NLC’s chief operating officer, Phillemon Letwaba. 

In 2017 a non-profit company in which Letwaba’s wife, Rebotile Malomane, was the director, received R4.8-million in funding from the NLC, despite having no track record.  The non-profit company Zibsimanzi is a shelf company. 

It isn’t clear what project Malomane’s company received the grant for, but the NLC 2017/18 grant recipients included the amount received, the date it was received and the project number.

Earlier this year, Letwaba agreed to take leave amid an independent investigation into allegations of improper use of funds intended for good causes.

The NLC board appointed Sekela Xabiso to investigate fraud allegations in lottery grants. Meanwhile, the Department of Trade, Industry and Competition appointed audit firm Nexia-SABT to look into four multimillion-rand lottery grants.

“The Department of Trade, Industry and Competition has requested that the investigation be expeditiously concluded. The pandemic has resulted in delays but every effort is being expended to ensure that the investigation is completed,” said Sidwell Medupe, the department’s spokesperson.

This isn’t the first time that the department has launched an investigation into the NLC’s grants. In 2019 Medupe told GroundUp that “the minister has instructed the NLC board and DTI internal audit to institute an investigation”.

The investigation was complete and the report was reviewed by the department. In a letter to the NLC chairperson, Patel recommended that the NLC pursue a criminal case regarding the R27.5-million lottery grant to Denzhe Primary Healthcare which was supposed to go to building a rehab centre in Pretoria. 

“The outcome of the investigation is without evidence that the drug rehabilitation centre was complete,” wrote Patel in a letter to the NLC chairperson.

Patel also recommended that the funds paid to Denzhe be recovered.

The investigation found that Denzhe Primary Healthcare, which was hijacked by a Pretoria-based lawyer, Lesley Ramulifho, did not use the lottery grant for “its intended purpose”. 

Ramulifho was alleged to have used R5-million to buy a house in Pretoria, a claim he has denied. It’s unclear whether criminal charges were pursued. 

Meanwhile, GroundUp has been taken to court by a newly formed lobby group, United Civil Society in Action (Ucsa), for publishing the names and details of the NLC beneficiaries. 

Ucsa includes organisations such as #NotinMyName, Southern Africa National NGO Coalition (Sangoco), Independent Beneficiaries Forum (IBF), and Southern African Non-Governmental Organisations Network (Sangonet).

The South African National Editors Forum (Sanef) and Media Monitoring Africa (MMA) will be joining the case as respondents.

“[The NLC’s refusal to release its list of grant beneficiaries] goes against every basic principle we have as a democracy, it goes against open transparency and accountability,” said William Bird, the director of MMA. 

This is not the first time GroundUp has been sued for exposing dodgy lottery grants. In 2019 Letwaba sued GroundUp for defamation and demanded that six articles from the website be removed because they were “wrongful and defamatory”. 

GroundUp has not removed the articles and does not intend to do so. 

“We are confident that our stories have been accurate and in the public interest,” wrote GroundUp. The case is still ongoing and GroundUp has started crowdfunding for its defence. DM