The corruption-accused National Lotteries Commission (NLC) is required by law to disclose its list of grant beneficiaries, parliament’s legal advisers told its trade and industry portfolio committee on Wednesday.

“We submit that the financial statements of the NLC must disclose the information, and that this information must be available to the auditor-general as the NLC is subject to the  Public Finance Management Act,” the legal advisers said.

The NLC has, for the first time in 18 years, not disclosed the beneficiaries in its 2019 annual report. It recently argued that, while in the past such lists were published, on consideration of the laws governing private information, coupled with complaints by some beneficiaries of alleged extortion and harassment, it reached the conclusion that the publication of such information was erroneous.

However, according to parliament’s legal advice, “The constitutional right to privacy is not an absolute right but may be limited in terms of laws of general application and must be balanced with other rights entrenched in the constitution”. Furthermore, purposeful interpretation of the Lotteries Act shows that a culture of openness and transparency is required.

The NLC, which is tasked with regulating lotteries and the distribution of funds to good causes, has faced numerous allegations of corruption in recent years.

Some MPs have called for its proactive fund, which amounts to about R140m annually, to be investigated. The NLC was empowered to grant funding to worthy causes without the need for applications through a 2015 amendment to its enabling act. This was to address the need by organisations for funding when they did not have the ability to submit formal applications.

Many of the projects supported through the proactive fund are infrastructure projects, including schools and early childhood development facilities. Some NLC executives have been accused of channeling multi-million-rand grants to non-profit organisations that involved family and friends.

In February, the NLC’s board appointed an audit firm to conduct an independent investigation into the allegations of corruption. Trade, industry and competition minister Ebrahim Patel has authorised a separate inquiry into some of the lottery-funded projects.

Last week, the DA laid criminal charges against the NLC for allegedly failing to carry out its duties and responsibilities, as well as for breaching access to information laws. According to the party’s own legal opinion, the NLC’s refusal to disclose the names of fund beneficiaries to parliament on the basis that it is prohibited from doing so is unlawful and an error of law.

DA MP Mat Cuthbert said “now that the NLC and its board have officially been labeled as constitutional delinquents — the DA’s efforts have been vindicated”.

“As agreed in the meeting, this information is to be provided to committee members as soon as physically possible and the DA will accept nothing less,” Cuthbert said. “Failure to do so by the NLC will result in the DA subpoenaing them to appear before the committee to account.” 


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