Two men from Soweto appeared in the Kimberley Regional Court this week, facing charges of fraud case and theft in connection with the misappropriation of lottery funds. This is only the second case of its kind to be prosecuted, despite at least 19 similar matters referred to the National Prosecuting Authority (NPA), with no progress on 18 of them to date. Some of these referrals date back to April 2022.
Additionally, there are 21 more cases currently under investigation by the Hawks and SAPS, some dating back to 2020. This follows a dossier handed over to the police by former Minister of Trade, Industry and Competition, Ebrahim Patel, which detailed alleged corruption involving former National Lotteries Commission (NLC) COO Phillemon Letwaba and his associates.
Earlier this year, the Special Investigating Unit (SIU) reported to Parliament that it is investigating questionable grants totaling over R2 billion, a figure that could rise as new tips are received. The two accused, Jeremane Petrus Sedibe and Malesela Johannes Khoza, appeared in court on Monday regarding a grant of R885,000 for a non-existent gender-based violence (GBV) project in the Northern Cape.
After several postponements, the trial was set for September 1-3 but was delayed again to allow the defendants to appoint new legal counsel, as they had parted ways with their previous lawyer. The case is now scheduled to resume on October 7, with Sedibe’s bail set at R15,000 and Khoza’s at R10,000.
They face multiple charges, including fraud, theft, forgery, uttering, money laundering, and cybercrimes. The charge sheet details how they allegedly submitted false information and documents to secure funding, which they then misappropriated for personal use.
Sedibe is also charged under the Prevention of Organised Crime Act for engaging in transactions he knew, or should have known, were proceeds of unlawful activities. This included concealing the nature and source of the funds by transferring money between accounts and spending it on personal expenses.
Sedibe has additional allegations against him, including a R9 million grant awarded to the Motheo Sports and Entertainment Foundation for a sports center in Soweto that was never built. When GroundUp visited the site, they found only an empty lot used by local residents as a rubbish dump.
The only other lottery corruption case successfully prosecuted involved Christopher Tshivule, who received eight-year prison sentence for fraud related to a R1.6 million grant allocated to a non-profit organization called The Message. Tshivule was originally charged alongside three others, including Fulufhelo Promise Kharivhe and her husband Collins Tshisimba, who have been identified by the SIU as key figures in the lottery looting scheme. However, charges against the others were dropped after they made successful representations to the NPA.
Mashudu Netshikweta, who leads the SIU team investigating NLC grant corruption, told Parliament’s Standing Committee on Public Accounts (SCOPA) that Sedibe was allegedly involved in at least six non-profit organizations that siphoned money from the NLC in various provinces. In the Northern Cape, Sedibe reportedly used an organization to secure R885,000 for a purported GBV program in a remote village.
According to the charge sheet, R500,000 was transferred into the bank account provided by Kgatelopele on December 1, 2021, with Sedibe and Khoza listed as co-signatories. However, the funds were not used in accordance with the grant agreement. Instead, they allegedly submitted false documents to justify expenditures to release a second tranche of R385,000.
Netshikweta explained to SCOPA that NLC officials in the Northern Cape provincial office had aided Sedibe. A monitoring and evaluation officer flagged Sedibe’s progress report as fraudulent and informed the provincial manager. However, just five days later, the report was altered to falsely confirm that Sedibe had fulfilled the project requirements.
The grant was signed off by Aobakwe Gaobuse, the acting provincial manager at the NLC at that time. Gaobuse was among seven staff members named in a search and seizure warrant executed by the SIU and Hawks at the NLC’s Kimberley office in March 2022.
During the search, NLC documents were also found at the home of Gaobuse and her partner, who served as the provincial legal officer. Netshikweta further testified to SCOPA that in the Free State, Sedibe used a different non-profit organization to obtain R1.4 million, which he entirely embezzled. He allegedly repeated this scheme in Limpopo, receiving R1.2 million for another GBV project, which he also embezzled.
