The Special Investigating Unit has secured a tribunal order compelling SASCOC and associated parties to repay nearly R25 million unlawfully diverted from a National Lotteries Commission grant.
The landmark ruling by the Special Tribunal follows an extensive SIU investigation into funding that was originally intended to support South Africa’s 2016 Rio Olympics roadshow campaign and assist youth and sports development organisations.
Instead, investigators found that millions of rand were diverted through an elaborate scheme involving a newly established non-profit organisation that failed to meet the National Lotteries Commission’s funding requirements.
According to the SIU, SASCOC applied for a R34.83 million grant on behalf of the Mshandukani Foundation in July 2016. Within six days, the funding was approved and transferred to SASCOC before R24.83 million was paid to the foundation in three instalments. SASCOC retained R150 000 for services rendered.
The investigation found that the Mshandukani Foundation did not qualify for funding as it had only recently been established and lacked the financial history required to receive lottery funding.
Investigators also uncovered evidence that the identities of two women were used without their knowledge to register the foundation, with forged signatures appearing on official registration documents.
Financial analysis traced the movement of the public funds through a network of companies and individuals.
More than R15 million was transferred to Ironbridge Travel Agency, while R7.23 million went to Mshandukani Holdings and a further R2 million to Ndzhuku Trading.
The SIU further established that significant portions of the money were used for purposes entirely unrelated to the approved grant objectives.
Instead of supporting sport development and youth programmes, the funds were allegedly spent on luxury vehicles, livestock, construction equipment, network installations, décor services and payments benefiting individuals connected to former National Lotteries Commission Chief Operations Officer Philemon Letwaba.
The investigation also identified payments including R450 000 made directly to Letwaba, R600 000 to a former NLC legal official and R3 million to an entity linked to Letwaba.
In its judgment, the Special Tribunal declared the grant unlawful and ruled that the funding process had been tainted by misrepresentation, maladministration and unlawful enrichment.
The Tribunal further found that SASCOC played a role in facilitating the unlawful diversion of public funds and ordered SASCOC, its former Chief Financial Officer Vinesh Maharaj and several companies and individuals to repay the money jointly and severally.
Only the two women whose identities were fraudulently used were excluded from the repayment order after the Tribunal found they had no involvement in the scheme.
The ruling builds on earlier SIU action that resulted in preservation orders freezing luxury properties in Centurion linked to the investigation, as well as high-value drilling equipment purchased using funds intended for the Rio Olympics campaign.
The SIU said the judgment forms part of ongoing efforts to recover public money lost through corruption and maladministration while strengthening accountability across public institutions.
Evidence of alleged criminal conduct uncovered during the investigation will be referred to the National Prosecuting Authority for consideration of possible criminal prosecution.
The outcome represents another significant step in protecting public resources and ensuring that funding intended to benefit communities, athletes and development programmes is used for its intended purpose rather than private enrichment.
