Widespread Corruption at South Africa’s Lottery Commission Still Awaits Full Prosecution

SIU Reports Findings, But Lacks Prosecutorial Power

The Special Investigating Unit (SIU) presented its findings to Parliament’s Standing Committee on Public Accounts (SCOPA), revealing that it had referred 19 cases of fraud, corruption, and money laundering to the National Prosecuting Authority (NPA). However, only one case has reached the courtroom so far. Since the SIU lacks the power to prosecute, it must rely on the NPA to pursue legal action.

SIU investigators named several key individuals involved in the alleged looting of the National Lotteries Commission (NLC). These include former COO Phillemon Letwaba, ex-board chair Alfred Nevhutanda, former board member William Huma, and ex-Commissioner Thabang Mampane. According to the SIU, they used lottery funds to purchase luxury assets such as mansions and expensive vehicles.

Extent of Financial Damage

The SIU is currently investigating R2 billion in potentially fraudulent contracts. It has already completed two phases – covering R280 million and R247 million, respectively. Phase three is ongoing and involves R905 million. With new tip-offs arriving regularly, officials expect the total to grow. To date, the Asset Forfeiture Unit and the Special Tribunal have frozen assets worth nearly R122 million, including properties, vehicles, and pensions.

Investigators also uncovered serious weaknesses in the NLC’s systems. Staff awarded grants multiple times to the same people or entities, exploiting the lack of identity number tracking. The NLC also abused “proactive funding”, a system that allowed board members to allocate funds without formal applications. This approach created significant opportunities for fraud, prompting its suspension.

Many NLC-funded projects were never completed. Some were barely started. The SIU found that organisations often received instructions to work with specific companies – many of which had ties to NLC officials. In some cases, recipients paid a portion of the funds to churches or other third parties. Fraudsters frequently used fake companies and trusts to move and hide stolen money.

Legal and Administrative Challenges

The SIU faces multiple hurdles in its investigations. Accessing financial records remains slow, and the complex layers used in money laundering delay the tracking process. So far, the SIU has asked the Companies and Intellectual Property Commission (CIPC) to blacklist seven individuals and 14 companies involved in the scheme. It has also reported several lawyers and officials to their respective professional bodies.

Additionally, the SIU has requested an expansion of its 2020 Presidential Proclamation. The current mandate does not cover procurement-related corruption, which limits the scope of its investigations. Although the Justice Department promised a decision by February 2025, it has yet to act on the request.