Minister's awarding of lottery license irrational - judge

2015-07-08 23:18

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

Pretoria - A Pretoria high court judge has described Trade and Industry Minister Rob Davies's decision to award the national lottery license to Ithuba as irrational and "displaying an excessive appetite for risk".

Judge Neil Tuchten granted an order to Gidani declaring Davies's decision to award the third lottery license to Ithuba unconstitutional and invalid.

He set aside the license which was issued by the minister to Ithuba on November 24 last year.

Judge Tuchten also suspended the operation of the order for a month and the awarding of the licence has been referred back to the minister.

However, Tuchten could find no fault with the minister’s preference for Ithuba as the preferred bidder for the lottery licence and only took issue with the manner in which the tender was awarded.

"It is in the public interest that a flawed decision, defended in this manner, should not be allowed to stand. There is a risk that the full picture has even now not emerged," he said.

Judge Tuchten made it clear that the minister had "damage control powers" to limit or eliminate the risk that the lottery would cease to function.

"The minister may, in a proper case, decide not to issue a license at all, in which case he may appoint an organ of state to run the lottery. Where the licensee is for any reason whatsoever unable to conduct the National Lottery, the minister may under certain circumstances issue a temporary license.”

Judge Tuchten went on to say the purpose of the lottery was to provide funds for good causes.

"Any interruption in the conduct of the lottery will have severely detrimental consequences for those institutions that rely, or have a reasonable expectation of relying, on funding generated by the lottery,” he said, adding that while he was aware that Ithuba had committed a substantial amount of money to the venture, those were “inherent in a tender environment which is subject to the rule of law”.

"The minister, with the support and co-operation of both Ithuba and the [Lotteries] Board, entered into the license agreement while litigation to prevent their doing so was pending. Now that all the evidence is in, I cannot see any reason for the haste with which this happened, "he said.

Judge Tuchten found that Davies had awarded the license without Ithuba putting up the required performance bond of R125m before the license was issued.

Ithuba only provided the bond during the course of legal argument in the application.

He also found that the minister's decision was irrational because he failed to take into consideration that certain provisions of the license agreement, if implemented, could result in Ithuba's insolvency.

Read more on:    lotto  |  rob davies  |  pretoria

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.
NEXT ON NEWS24X publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.