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Lottery admits it’s investigating projects it defended

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Department of Trade and Industry ordered investigation, but Lottery spins a different story

Photo of Lotto funded buildings
These two buildings, part of a rehab centre, were built with Lottery funding. When GroundUp visited last year, the roofs leaked and doors and windows did not fit properly.
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After strongly defending two multimillion-rand projects it funded, the National Lottery Commission (NLC) has done a complete about face and now says that it is investigating both of them.

The one project is a drug rehabilitation centre in Pretoria and the other is a school in Limpopo that was destroyed during protests a few years ago.

An alleged hijacked non-profit organisation, Denzhe Primary Care, was used by controversial lawyer Leslie Ramulifho to get R27.5-million in Lottery funding to build a new drug rehabilitation centre near Pretoria.

The other project involved an NPO run by a boxing promoter with no history in construction, who was given R28.3-million rand to rebuild a Limpopo school that was destroyed during protests in the Vuwani area in 2015 and 2016.

Earlier this week GroundUp reported that Trade and Industry Minister Rob Davies had ordered an investigation into fraud and corruption involving NLC grants. Well-informed sources told GroundUp that the investigation involved both “forensic and internal audits”.

“The Minister has instructed the NLC Board and DTI Internal Audit to institute an investigation,” DTI spokesman Sidwell Medupe said last week.

But a statement this week by the NLC puts a different spin on the investigation. The NLC claimed that its Board had “commissioned an independent investigation” into Denzhe and Simba after “allegations of misappropriation of funds surfaced in the media with regards to two projects” in October last year.

“The investigations are ongoing, and the Board continuously sends updates to the Minister of Trade and Industry,” NLC head of communications Ndivhuho Mafela said in the release.

In December last year the Commission claimed it was investigating the Denzhe grant. But last month the NLC’s Mafela told Carte Blanche (see from 9.42 minutes) that their hands “were tied” because of legal action by Ramulifho and Denzhe.

The incomplete and shoddily built drug rehab is the subject of litigation and at least R20-million of the Lottery’s funding is unaccounted for. Ramulifho also used at least R530,000 of the Lottery grant to pay for Ocean Basket franchises in Gauteng. He later claimed that the money had been repaid.

GroundUp revealed in November last year how a company, of which the brother of NLC COO Philemon Letwaba was the sole director, had received a R15-million contract to build the rehab.

Months earlier, in February, Letwaba said in an email: “…this is one of the good projects that we are happy about and your balanced reporting will really assist the NLC in informing the public about the work that we do in a reliable and accurate manner.”

Simba Community Development Foundation is a non-compliant NPO run by a boxing promotor, which received R28.5-million to rebuild a Limpopo school, Vhafamadi High, that was destroyed during protests. The school was so shoddily built that it needed extensive repairs just 19 months after it was built.

The NLC lodged a complaint with the Press Ombudsman about GroundUp’s reporting on the school project but withdrew it before it could be adjudicated.

The NLC rejected a Promotion of Access to Information Act (PAIA) application requesting documents relating to the Denzhe funding. It also turned down an appeal against this rejection.

In the case of the Vhafamadi High School it has ignored a PAIA application for documents that was submitted late last year. The NLC initially acknowledged receipt of the application but then asked for additional time after failing to meet the statuary deadline to respond. Several follow up emails to the NLC about the application have also been ignored.

© 2019 GroundUp.
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TOPICS:  Lotto

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