Lottery to lay criminal complaints against former board members

The National Lotteries Commission’s board plans to lay criminal complaints against former members implicated in corruption, including the rampant looting of grant funding.

The decision comes amid increasing frustration at the slow pace of investigations by police and the Hawks, and a lack of prosecutions by the National Prosecuting Authority (NPA).

The board’s decision to act was revealed in parliament this week when the commission presented its 2022/23 annual report and second-quarter performance report to parliament’s trade, industry and competition portfolio committee.

The commission’s new board has so far shown that it intends to stamp out the corruption that plagued the organisation.

Board chair Barney Pityana told MPs that they also intended to launch civil litigation against former members implicated in the looting.

Reading from a prepared statement Pityana, said: “Notwithstanding that various agencies are seized with this matter, we are of the view that ultimately the responsibility as a matter of law belongs to us as the substantive board of the NLC [National Lotteries Commission].”

Therefore the board had decided to:

• Lay criminal charges against former NLC Board members, “... especially [those who served] between 2015-2022 and have been identified as being implicated [in the looting] in investigations by the SIU [Special Investigating Unit) and other law-enforcement agencies”.
• Apply for implicated board members to be declared delinquent directors.
• Institute civil claims to recover “all monies” misappropriated as a result of former board members’ misconduct.
• Institute civil litigation for delictual damages against former board members “for the reputation, goodwill and the good name of the NLC that was harmed.”

Three former board members, ex-chair Alfred Nevhutanda, William Huma, and Muthuhandini Madzivhandila — who has since died — have been implicated in corruption involving lottery funds running into tens of millions of rand.

Minister of trade, industry & competition Ebrahim Patel told the virtual meeting he fully supported the decision to act on several fronts against former board members.

Patel made it clear that the planned actions were “not an alternative to criminal prosecution” but rather “a suite” of measures to “hold those implicated and those associated” with the looting accountable.

“We must hold accountable those who acted corruptly and also those who enabled corruption either through collusion or gross negligence in the performance of their responsibilities,” he said.

Serving on a board was not a “free lunch but a serious responsibility on behalf of the public,” Patel said, adding that amendments to the Companies Act now before his department’s committee would address the issue of delinquent directors.

Pityana told MPs current board members were aware that “in a corporate setting, we cannot completely wash our hands from the acts of our predecessor boards”.

“It is for those reasons that we believe that we are honour-bound to take action when evidence surfaces that demonstrates that the actions of members of our predecessor board were in violation of the [Lotteries] act in that they failed to undertake their duties and responsibilities with due care, honesty, efficiency and moral character, putting at risk the organisation that they were appointed to serve,” he added.

In a telephone interview after the presentation, Pityana said the board’s decision to lay criminal complaints and pursue civil litigation was taken “because we are frustrated by the length of time it is taking for the normal processes of the SIU, NPA and the Hawks. Things aren’t moving.

“We will go to the police with the information we have from internal investigations and from the SIU’s investigations. We will take a dossier to them”, he said.

Pityana said they would also apply to have former board members declared delinquent because neither the NPA nor SIU planned to do so.

“The long and short is that we are dealing with this within the organisation. Not only were members of the board not doing oversight work, but even those members where there is no evidence that they behaved corruptly, we are saying that they cast a blind eye to what was happening.”

Pityana was also critical of the Auditor-General’s Office, which consistently gave the NLC clean audits, despite the extent of the corruption involving lottery funds being widely reported.

“We are also saying that the AG over those years did not do their job. We want those people [who were responsible for giving the NLC clean audits] held to account”, he said.

“It is inconceivable that the first time the AG reported problems was two years ago. They cannot just wash their hands. The AG must investigate their own staff who were involved in these audits.”

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