Nehawu: Nothing wrong with link to lotto operator

2014-11-04 12:16

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Questions have arisen after Trade and Industry Minister Rob Davies announced Ithuba Holdings consortium as the preferred bidder to operate the national lottery.

Davies’ announcement last month was met with controversy when it emerged that Ithuba had links to the National Education Health and Allied Workers Union (Nehawu).

According to the Lotteries Act, Davies has to satisfy himself that no political party or office bearer had any direct financial interest with the applicant for the lottery licence before awarding it.

This piece of legislation defines an office bearer as as any official of a political party, alliance or movement. Nehawu has come under fire as it is an affiliate of Cosatu, a member of the ruling alliance. Nehawu held special elections to replace four of its top officials earlier this year after they were sent to Parliament as ANC MPs.

Nehawu is the sole shareholder in Nehawu Investment Holdings through the Tshedza Trust, its investment vehicle. Nehawu Investment Holdings, in turn, is a shareholder in Nehawu Lottery Investments, a member of the Ithuba consortium.

The National Lotteries Board, which recommended Ithuba to Davies, declined to answer questions, referring them to the trade and industry department.

Sidwell Medupe, department spokesperson, said Nehawu Lottery Investments was a shareholder of a shareholder of Ithuba.

“[It] is not a political party or a political office bearer as defined in the Lotteries Act,” said Medupe.

“The minister is satisfied that no political party in the republic or political office bearer has any direct financial interest in Ithuba Holdings or a shareholder of Ithuba.”

He added that there was a difference between being a member of a political party and an office bearer, and members of Ithuba were not office bearers of any party.

Geordin Hill-Lewis, the Democratic Alliance’s spokesperson on trade and industry, has written to Davies requesting details of the directors and shareholders of Ithuba, as well as documents of the bid adjudication and the reasons it was preferred over other applicants.

He also asked Davies to address his concerns about Nehawu’s involvement in the consortium.

City Press has found the consortium is thin on lottery experience – with only three people who have previously worked on lotteries – and some of its members are current or former civil servants.

Ithuba: Who’s who

What do a luxury car manufacturer, social grants, the City of Joburg, and union funds have in common?

These are all sectors the members of the Ithuba consortium are involved in, according to company and online records. City Press takes a closer look.

Ithuba Holdings

Amaresh Chetty

Chetty was the head of private equity at Empilweni Investments, which previously held contracts to distribute social grants in some provinces.

Charmaine Mabuza

Mabuza is the chief executive of Empilweni, and one of the founding directors of Women’s Investment Portfolio Holdings.

Thuli Mashanda

Mashanda is a chartered accountant who currently chairs the risk committee of City Parks, an agency of the City of Joburg.

Alex Burstein

Burstein is a United States lottery consultant who has been involved in more than 50 lotteries, according to his profile on Abacus Solutions, a lottery advisory company. He has worked in various roles from the inception to implementation and operation, and has contributed to legislation in several jurisdictions.

Seth Phalatse

Phalatse is the chairperson of Ithuba. He holds a number of directorships, including BMW SA, the University of Johannesburg, African Access Holdings and former lottery operator Uthingo, according to his profile on Bloomberg.

Rudy Roberts

Roberts is the chief executive of Nehawu Investment Holdings. He also serves on the board of Nehawu Lottery Investments, and previously sat on the board of Kwabo Holdings.

Yvonne Schnyder-Peschungo

A former general secretary of the World Lottery Association in Basel, Switzerland, Schnyder-Peschungo now runs her own public relations consulting company servicing clients in and outside the lottery industry.

Nehawu Lottery Investments

Makgane Thobejane

Thobejane is a former general secretary of Nehawu, and is an experienced civil servant, having worked in senior positions for the City of Joburg and Cape Town. He is one of the trustees of the Tshedza Trust, Nehawu’s investment vehicle, and the sole shareholder of Nehawu Investment Holdings. He also serves on the board of Kwabo Holdings.

Judith Cotwal

According to her LinkedIn profile, Cotwal is the deputy sheriff in Nelspruit. Geordin Hill-Lewis said when the DA tried to trace Ithuba, the only number it found reached the Nelspruit sheriff’s office.

She previously worked as a procurement officer for Empilweni Payout Services.

Mamoorosi Qacha

A former Gauteng department of agriculture finance chief, she now heads Letlotlo Business Services, a professional services firm. She also worked as a financial controller at BMW SA.

Kwabo Holdings

Jabulane Blose

Blose is the chief executive of Disabled People of South Africa.

Makgane Thobejane

Makgane Thobejane is also on the Kwabo board.

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