• The
  National Lotteries Commission (NLC) intends to lay criminal complaints
  against former board members implicated in corruption.
• Minister
  Ebrahim Patel supports the move.
• NLC
  chairperson Barney Pityana also strongly criticised the Auditor-General
  for giving the NLC clean audits when so much corruption was taking place.
• For more financial news, go to the News24 Business front page.

The board of the NLC plans to lay criminal complaints
against former board members implicated in corruption, including for the rampant looting of
Lottery grant funding.

The decision comes against a background of 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 NLC presented its
2022/2023 annual report and second quarter performance report to Parliament’s
Trade, Industry and Competition (DTIC) portfolio committee.

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

NLC board chairperson Barney Pityana told MPs that they also
intended to launch civil litigation against former NLC board 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.”

Therefore, the NLC 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 SIU 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, former chairperson Alfred
Nevhutanda, William Huma, and Muthuhadini Madzivhandila, who has since died, have all been implicated in corruption
involving lottery funds running into tens of millions of rands.

Minister of Trade, Industry and Competition Ebrahim Patel
told the virtual meeting that 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 currently
before the DTIC committee would address
the issue of delinquent directors.

Pityana told MPs that the 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
said.

In a telephone interview after the presentation, Pityana
told GroundUp that 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 are not 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, which
consistently gave the NLC clean audits, despite extensive reporting – mainly by GroundUp –
on the extent of the corruption involving Lottery funds.

“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.”