SIU investigation exposes R25m NLC grant diversion
The unit further revealed that the identities of two women were allegedly used without consent to register the foundation.
The South African Sports Confederation and Olympic Committee (SASCOC) and several associated parties have been ordered to repay approximately R24.98 million unlawfully diverted from a National Lotteries Commission (NLC) grant intended for a 2016 Rio Olympics roadshow campaign.
The order was handed down by the Special Tribunal, following an investigation by the Special Investigating Unit (SIU).
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The SIU found that funds intended for public sports development were diverted through a network of entities linked to a former NLC official.
“On July 7 2016, SASCOC applied for a grant of R34.83 million from the NLC as a conduit for the Mshandukani Foundation,” the SIU said.
“This came after the Mshandukani Foundation was registered as a nonprofit company (NPO) on February 16, 2016, and opened a bank account on April 12, 2016.”
The unit further revealed that the identities of two women, a receptionist and a geologist intern at Mshandukani Holdings (Pty) Ltd, were allegedly used without consent to register the foundation.
Additionally, their signatures were forged during the process.
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“Despite this, SASCOC assisted Mshandukani in securing funding from the NLC,” it added.
According to the SIU, once funding was approved, SASCOC transferred R24.83 million to the Mshandukani Foundation in three tranches, despite the entity not meeting basic funding requirements.
This included the absence of required annual financial statements and its status as a newly established NPO.
A further R150 000 was retained and recorded as “services rendered”.
The SIU said portions of the funds were then distributed to various entities.
This included R15.35 million paid to Ironbridge Travel Agency, R7.23 million to Mshandukani Holdings, and R2 million to Ndzhuku Trading.
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Additional payments totalling R240 000 were made under the reference “SASCOC Events” to several beneficiaries.
These included Benza Consulting, Imbizo Events, Koleka Music Productions and Minenhle Dlamini.
The investigation also found that several payments made through Ironbridge Travel Agency were linked to former NLC Chief Operations Officer Philemon Letwaba.
“The SIU found that the R15.35 million transferred to Ironbridge Travel Agency, owned by Karabo Charles Sithole, who is related to Letwaba, was used for purposes unrelated to the grant’s approved objectives,” the unit said.
However, the funds were used to purchase vehicles and livestock, pay panel beaters, cover network installation services, fund decor, and enrich Letwaba, his family, and associates.
The Special Tribunal ordered all respondents to repay the funds, with the exception of the two women whose identities were fraudulently used.
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Two entities have already concluded settlement agreements with the SIU.
“The Tribunal found that SASCOC was complicit in the scheme to ‘siphon’ funds from the NLC and played a role in facilitating the unlawful diversion of public funds,” the SIU said.
The SIU confirmed that any evidence of criminal conduct uncovered during the investigation will be referred to the National Prosecuting Authority (NPA) for further action in line with the Special Investigating Units and Special Tribunals Act 74 of 1996.