Special Tribunal Judge President Margaret Victor sided with the Special Investigation Unit (SIU), invalidating a 2018 grant awarded by the National Lotteries Commission (NLC) to Madumelani NPO. This funding was originally approved for the construction of a cultural village.
Judge Victor found that brothers Tshimangadzo and Ndoweni Mukutu, along with affiliated entities, worked together to defraud the NLC. The SIU argued that the grant application had been submitted fraudulently by Tshimangadzo Mukutu, who falsely claimed to be a director of Madumelani. According to the SIU, the original community project was effectively hijacked. Investigators discovered that Mukutu had obtained the organization’s constitution under the guise of helping it secure funding.
However, the application process was riddled with fraud, featuring fabricated documentation and forged signatures. Many members of the original project told investigators they did not know Mukutu and were unaware that any application had been submitted or that funding had been awarded. Others listed as members in the submitted documents also denied involvement, claiming their signatures had been forged.
Additionally, the SIU found that fabricated financial statements were included in the application and that the cultural village mentioned in the proposal had already been built in 2015. Once the R14-million grant was approved, the funds were deposited into a newly opened bank account and quickly transferred to several companies linked to the Mukutu brothers. Among these transactions was a payment of R3-million to a trust where advocate William Huma, a former NLC board member, served as a trustee.
Ndoweni Mukutu denied any wrongdoing regarding the project hijacking, asserting that the funds were used for their intended purpose. He explained that the bank account was opened because Madumelani members could not visit the bank at the time. He claimed that payments made to other companies were for professional services, with his brother acting as the project manager.
However, the SIU rejected this explanation, noting that nearly R7.5-million of the funds had been transferred to companies associated with Ndoweni Mukutu. In her ruling, Judge Victor stated that the scheme was clearly fraudulent and showed significant planning. She remarked, “A lot of planning and intention went into executing the scheme, from obtaining a copy of the constitution to appointing fake office bearers, inserting fraudulent signatures in the application, opening a bank account, and immediately paying out millions of rands.”
The SIU requested that the Tribunal “pierce the corporate veil” of several companies involved in the scheme. This legal principle allows courts to hold company directors personally liable when their companies are used to perpetrate fraud or dishonest conduct. Judge Victor agreed, noting that the conduct involved justified such action. She stated, “The facts are such that the conduct of the antagonists is unconscionable, which justifies the piercing of the corporate veil.”
The Tribunal declared the NLC contract and grant award unlawful, ordering the directors of four companies linked to the Mukutu brothers Mdudonde Events and Investment Pty Ltd, RUM Management Consultancy Pty Ltd, Thwala Front Pty Ltd, and Ndhava Management CC—to repay the R14-million grant. They were also ordered to cover the legal costs associated with the application.
