Lottery probe: Preservation order granted on two Ocean Basket franchises, property worth R22m

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  • The Asset Forfeiture Unit has secured a preservation order amid a probe into allegations of maladministration and corruption at the National Lotteries Commission. 
  • The order preserves properties worth more than R22 million, a BMW and two Ocean Basket franchises. 
  • This as top executives are accused of having siphoned off hundreds of millions in funds that were meant to help build schools, orphanages and other facilities.
  • For more financial news, go to the News24 Business front page.

The National Prosecuting Authority's (NPA) Asset Forfeiture Unit (AFU) has secured a preservation order at the North Gauteng High Court in Pretoria amid a probe into allegations of maladministration and corruption at the National Lotteries Commission (NLC), the NPA said on Friday.

Under preservation are nine luxury residential estates to the value of R22 404 000, one BMW 420i Convertible and two Ocean Baskets franchises which, according to Gauteng regional NPA spokesperson Lumka Mahanjana, are "all linked to grants allocated by the NLC and which have nothing to do with the purposes of the grants".

"Widespread corruption, fraud, theft, and contraventions of the Lotteries Act were discovered by the SIU [Special Investigating Unit] against officials of the NLC and certain non-profit organisations [NPOs] that applied for NLC grants and worked in concert with each other to defraud the NLC," Mahanjana said.

In September, the SIU told Parliament's oversight committee on trade and industry that top executives had siphoned off hundreds of millions in funds that were meant to help build schools, orphanages and other facilities.

Criminal cases against the former chief financial officer Philemon Letwaba, chief executive officer Lesley Ramulifho, and the attorney who did legal work for NLC - and who were all implicated in the fraud and corruption - have been opened and are under investigation.

Preliminary investigations by the SIU – under a directive from President Cyril Ramaphosa – found that the NLC lost some R344 million from grants that were intended to help impoverished communities with projects, including the reconstruction of a school that had been torched during protests in Vuwani, Limpopo.

Other lost funds had been meant for a drug rehabilitation centre in Eersterust and the construction of a retirement home in Kuruman, Northern Cape.

READ | Lottery corruption: SIU to intensify probe as MPs hear director scored R6.3m Rolls-Royce

"Instead, the grants were used to buy luxurious properties for the benefit of employees of the NLC and members of the NPOs and/or their family members/friends. In most instances, the properties were registered in the names of the entities and not in the name of private individuals.

"Some entities masqueraded as construction companies but did not do construction (or very little) and were effectively used as money-laundering vehicles to receive kickbacks from NPOs who received grants from the NLC," Mahanjana added.

The next step will be to apply for a forfeiture order, the NPA said. Once a forfeiture order is granted, the properties will be sold at public auction and proceeds returned to the NLC.

"The NPA wants to assure the public that it is relentless in its fight against organised crime, including those employees in government institutions who steal from the most vulnerable to enrich themselves and fund their opulent lifestyles."

GroundUp recently reported that infrastructure projects set to be funded by the NLC but which were abandoned, will finally be completed after the looting of millions of rands.

This comes after the NLC allocated nearly R65 million to finish these infrastructure projects after the lottery grants went missing. A total of over R240 million in additional funding has been allocated for projects in need of completion. 

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