IN THE SPECIAL TRIBUNAL ESTABLISHED IN TERMS OF SECTION 2(1)
OF
THE SPECIAL INVESTIGATING UNIT AND
SPECIAL TRIBUNALS ACT 74 OF 1996
(REPUBLIC OF SOUTH AFRICA)
CASE NO.: GP0S/2025
In the matter between:
SPECIAL INVESTIGATING UNIT Applicant
and
MADUMELANI COMMUNITY PROJECT NPO First Respondent
MR TSHIMANGADZO MUKUTU Second Respondent
MR NDOWENT MUKUTU Third Respondent
TSHILIDZI DAVID NETSWINGANANI Fourth Respondent
MS THULISILE MA VIS KHOZA
MUDONDE EVENTS AND INVESTMENT (PTY)L TD
RUM MANAGEMENT CONSULT ANCY (PTY)L TD
NDHA VA MANAGEMENT CC
TSHISIMBA COLLIN MUKONDOLELI
THW ALA FRONT (PTY) LTD
KHARJVHE FULUFELO PROMISE
Respondent
DZATA ACCOUNTANTS
NA MMBOYJ
TA LUVHA
MR MARITO MABUNDA
BDH FAMILY TRUST
ADV. WILLIAM ELLIAS RUMA
INDEPENDENT ELECTORAL COMMISSION
Fifth Respondent
Sixth Respondent
Seventh Resp ondent
Eighth Respondent
Nineth Respondent
Tenth Respondent
Eleventh
Twelfth Respondent
Thirteenth Respon dent
Fourteenth Respo ndent
Fifteenth Responden t
Sixteenth Respondent
Seventeent h Respondent
Eighteent h Respo ndent
2
THE NATIONAL LOTTERIES
COMMISSION
Victor J
ineteenth Respondent
JUDGMENT
Corrup tion Comes in Many Forms. Although there is no single agreed-upon definition of
corruption, it is wide ly acce pted that it involves the abuse of entrusted powe r for private gain
by individuals or institu tions in the publ ic and private sectors. Corruption has negative effects
on all levels of society and risks resulting in resources being unfairly distributed and public
funds being misallocated. This can lead to reduced public confidence in gove rnment and the
justice sys tem. Corruption is also a threat to human rights and undermines the rule of law,
democracy, and economic development.1
Introduction
[1] The applicant is the Specia l Tnvestigating Unit (SIU), and the first responde nt is the
Madumelani Community Project (Madumelani) , a on- Profit Organisation (NPO)
reg istered with the Department of Social Development under regi stration number 092-687.
[2] Following upon a Proclamation issued by the Honourable President of South
Africa , the SIU undertook the investigation into the affairs of the Madume lani Community
Project and, upon completion, seeks to review and set aside the decision of the National
Lottery Commiss ion (NLC), 19th respondent , to award fund ing to the first respondent in
1 Raoul Wallcnbe rg lns1i1ute
3
the amount of R 14 000 000. It also seeks to set aside the contract dated 28 February 2018
concluded between the NLC and the first respondent, which is void ab initio.
[3] The other respondents include various antagonists who resist the relief. The
princ ipal participants in the grant funding are Mr Tsh imangadzo Mukutu , the second
respondent and his brother, Mr Ndoweni Mukutu. The twelfth respondent is Dzata
Accountants, an accounting firm that allegedly produced false annual financial statements.
Of the remaining 18 respondents, there are several are companies and close corporations.
[ 4] The SIU seeks a declarator that the third, fourth, sixth, seven th, eighth, ninth , and
tenth respondents acted in concert to defraud the NLC. It also seeks an order piercing the
corporate veil of the sixth, seventh, eighth, and tenth respondent s and holding the directors
liable. An order is also sought that the second, third , fourth, sixth, seventh , eighth, ninth ,
and tenth respondents repay the said sum of R 14 000 000 jointly and severally, the one
paying the others to be absolved.
[5] The I 8th Respo ndent is the Independent Electoral Commission (IEC) , whose main
role is to strengthen constitutional democracy. Mr N Mukutu is an employee of the IEC
and is also alleged to be a key figure in the fraudulent scheme perpetrated against the NLC.
Issues for determi nation
[6]
6. I Delay in instituting review proceedings
6.2 Jurisdiction of the Special Tribunal
6.3 Merits of the Review
6.4 Piercing the corporate veil of the vanous compames and the close
corporation.
4
The S/U's factua l submissions
[7] The Madumelani Com munit y project was registered on 31 August 2011. Its
original members did not participate in this NLC grant application, which is the genesis of
this application. The grant applic ation was signed by Mr. T Mukutu , the second respondent ,
who described himself as a director of Madumelani. The sig nature of Mr. T Makutu was
admitted by Mr N Mukutu , his brother, who is the third respondent and the only deponent
to the answering affidavit in these proceedin gs. Mr N Muku tu was repr esented by counsel
at this hearing. Various other people listed themselves as the chairperson, treasurer,
secretary, and members of Madumelani. It is noteworthy that these individua ls are not
listed in the Department of Soc ial Deve lopment's database, which requir es that every NPO
be registered and that member deta ils be recorded. The original members of Madumelani
were unaware of this change in membership.
[8] The SIU asserts that Mr T Mukutu obtained a copy of the Constituti on of
Madumelani under the guise of assist ing the organisation in obtaini ng funding. On 16
Februa ry 20 I 8, he appli ed for funding on behalf of Madume lani. It was grante d. The SIU
sub mits that the entire proce ss was fraudulent and that the gra nt proceed s were used for a
purpo se other than the constructi on of a cultural village. It can be inferred from the SIU's
papers that the Mukutu brothers were the main antagonists pushing this alleged fraudulent
scheme forward.
[9] The SIU details some 6 fraudulent misrepresentations made to the NLC. These
include:
9.1 The founders and real members of Madumelani did not know Mr T Mukutu.
He signe d himself as a director of Madumelani, and that was false. There were
various affidav its confirming this falsity. The investigation showed that the original
members of the NPO were unaware of the funding application and of the unl awfu l
and fraudulent activities that fol lowed. It was confirm ed that two men visited the
5
project before 2018, requested the constitutio n, and stated that they could source
funding. The constitutio n was handed ove r to them on that basis. The members of
Madumclani arc unaware of the grant fundin g document. They never received
funding.
9.2 The second misrepresenta tion is that the name of Ms Siguca appears on the
application form, and she does not know the Mukutu brothers. She deposed to an
affidavit confirming that she is not a membe r of Madumelani and has never heard
of it. She denies attesting to an affidavit at the Cato Manor police station for the
purpose of the gran t appl ication to the NLC.
9.3 The third misrepresentation is that of Mr Luthu li who is listed as the secretary
of Madumelani . He confoms that he is not a member , has never heard of it, knows
nothing abo ut the funding applic ation, nor the names on the form. He knows Ms
Siguca, with whom he wor ked at Cato Manor , and he never attended the Cato Manor
pol ice station to sign any funding request.
9.4 The fourth misrepresentation is the listing of Mr Lalela as the chairperson of
Madumelani on the app lication form. He does not know Mr T Masuku, is unawar e
of the application , and did not append his signa ture to the application form or to the
annual fi nancial stateme nts prepared by DZA TA Accountants.
9.5 The fifth misrepresentation is that of the financial state ment s, which purport to
reflect the affair s of Madumelani, stating that there are assets of R200 000 and that
the revenue in 2016 was RI 120 000 and in 2017 the sum ofR I02.
9.6 The sixth misrepresentation related to the purpose of the funding. It was to build
a cultural village. But the cultura l village had already been constructed . Jt was
6
confirmed that the village was established in 20 l 5, as evidenced by a R300 000
grant for the construction of the five rondavels.
[IO] The SIU asserts that Mr T and N Mukutu were the maste rminds of the fraudulent
scheme and that they intentionally des igned it. These misre presentations resulted in the
LC's grant of R 14 million. The funds were deposited into a new ly opened bank account
by Mr Makutu and maintained by his brother, Mr T Mukutu. Others were paid to open
a bank account. Mr. N Mukutu is the deponent in these proceedings.
[ I I] Once the grant funds were deposited into the recently opened bank account, amounts
were immediately transferred into accounts held by companies assoc iated with the
respondents, including R3,000,000 payment into a trust in respect of which Advocate
Huma , a former Board member of the NLC, was a trustee. The sum ofR7 489 000.00 was
paid to Mr N Mukutu via some companies that he controlled.
The version of the 3"1, 6th, and 7th respondents.
[l 2] The 7th respondent has been deregistered. The argument at the hearing pertained
only to the 3rd and 6th respondents. (the respondents)
[ 13] Mr Makutu states that the 7th respondent was dereg istered on 7 February 2025 due
to the SJU's intervention in its banking relationship. The Bank then closed the account. He
transferred all the business of the 7th respondent to the 6th respondent, Mudonde Events
and Investment (Pty) Ltd. (Mudonde ). His affidavit is in support of the company Mudonde
as well.
[ 14] Mr N Mukutu complains that the SIU did not interview him or his brother Mr T
M ukutu. If it had done so, it would have taken a very different view of the case. He denies
hijacking Madumelani. He states that the respondents developed the cultura l village and
that the grant funds were used for that purpose. He concedes that there were some existing
7
buildings on the site . He presented a series of photographs as proof of the developm ent. He
also states that the NLC received a report from a quantity surveyor confirming that the
project was completed.
[ 15] Mr Mukutu also states that he has very little knowledge of the facts as set out in
the founding affidavit , as he was not fully invo lved. He assisted in opening the bank
account because it was a practical option. The Madume lani members were not near the
bank on that day.
[ 16] He explains that the services were rendered by RUM Management Consultancy
(Pty) Ltd on behalf of Mad umelani, and such an arrangement is in the norma l course of
business. He states that his friend, Mr Mukondeleli, advised on the extension of the existing
cultural village. He was shown draft drawings of the project, and it was Mr Mukonde leli
who advised him to prepare a funding proposal. He has experience in this field, having
been involved in multiple funding applications. He attended a virtual meeting and statt::s
that members of the Madumelani were present, but he can't remember their names.
[17] The prevailing rate for project management fees is between 6% and 10%, and RUM
charged this rate for its oversight of the project. He prepared a high ly detailed service-level
agreement. He was advised that Madumelani agreed. He prepared the funding proposal to
raise capital.
[ 18] He also felt responsible for RU M's contractual obligations to service providers and
therefore assisted in raising capital. He appo inted his brother , Mr T Makutu, to act as
project manager. He was not involved in preparing the application and was unaware of its
sub mission date to the NLC. He appears to believe that Mr Mukondeleli, together with his
brothe r, would have attended to all necessary tasks, as his brother was the project manager.
8
[ 19) He submits that the delay in bringing this review applica tion has been excessive. If
some leeway is required , the calculation should be based on March 20 19, a year afte r the
funding was granted. He also notes the non-joindcr of certain of the decision-makers who
approved the grant. He notes that because it was a proactive funding initiative , the NLC's
usual admin istrative process was not involved in the decision; instead, decision-makers
from anot her section were. He is also concerned abo ut his employer, the IEC, being joined
as a defendant, as the allegations are damaging to his reputation.
[20) He exp lained that companies RUM and Mudonde were established in 2014.
Mudondo was in the business of organising events, includin g music fest ivals, and RUM
was in the business of consulting, preparing plans, managing projects, and acqu iring
funding for clients. This process is what happened in this case. He conte nds that after
RUM' s bank accou nt was closed, all the business was transferred to Mudonde.
[21] The responde nts conte nd that the remaining material aspects of the app lication for
a legality review are fatal to the gra nt of this applica tion . A quantity surveyor's report
assessing the development's performance indicates that the project was completed in May
2019. The respondents conte nd that the non-joinder of the quantity surveyors is fatal. The
respondents also critic ise the SIU for not join ing those members of the LC who were on
the proactive committee and who considered the funding appli cation. He contends that the
committee members have a direct and substant ial interest in the matter because they are
independen t of the NLC.
r22] In the alternative, the respondents argue that the allegations of fraud aris ing during
the investigation cannot address the eve nts surrounding the actua l applicat ion for grant
funding. So, the SIU evidence is circumstantial. The respondents argue that the SIU cannot
funding. So, the SIU evidence is circumstantial. The respondents argue that the SIU cannot
dispute the factual evidence adduced by Mr N Makutu or his brother , Mr T Mukutu. The
respondents contend that the ir evidence is not far-fetched or implausib le. The allegation
9
that the applicat ion was a scam and that the NPO was hijacked is inadequate to prove any
unlawful scheme.
[23] In response, the SIU clarified that the proactive committee is part of the NLC and,
therefore, there is no need to join them. Mr. Mukondoleli's confirmatory affidavit only
confirms that he took photographs and introduced Mr. Jacob Ramuhashi to Mr. N Mukutu.
His confirmato ry affidavi t does not touch on the mer its of the case.
[24] The SIU sub mits that it is inconce ivable that the Mukutu brothers were unaware of
Madum elani's business. The SIU notes that interviews with the two broth ers, Mukutu , were
requested on IO and 2 1 June 2024, but no response was received. Hence , the allegation that
he and his brother were not interviewed is false. The SIU also sub mits that Mr N Mukutu's
cla im of not having played a role in the process, othe r than opening a bank account, is false .
The SIU points out that he received R7 489 000.00 through his companies. Moreover , the
fact that Mr T Mukutu has neither defended the action nor filed an affidav it; whatever is
said through Mr. N Mukutu is therefore hearsay.
(25] The SIU explains that there was no delay in launching this application.
Invest igat ions take time from when the State President issues the Proclamation unti l
complet ion. Investigations are ongoing. The SIU only interviewed origi nal members of
Madumelani on I 1 and 24 April 2024, Ms Siguca on 13 November 2024, and Mr Luthuli
on 6 November 2024. The application was launched in March 2025.
Legal framework
(26] The SIU was esta blished in terms of sectio n 2( I )(a) (i) of the Specia l Investigating
Units and Special Tribunals Act No. 74 of 1996. (the SIU Act). On 6 Nove mber 2020, the
SIU was mandated by the President of South Africa, under Proclamation 32 of 2020 ,
published in Government Gazette 43885, to conduct investigation s into maladministration
relating to the affairs of the Nationa l Lotteries Commiss ion (NLC) and the respondents.
10
[27] The SIU has wide powers in terms of section 2(2) of the SIU Act to institute
proceedings and seek relief after being authorised by the Proclamatio n to investigate
irregularities and corruption, and serious maladministration relating to the adm inistration
and affa irs of any state institut ion, which includes the NLC, and any conduct with the
potential to seriously harm the interests of the NLC, including the public at large .
[28] The SIU, as authorised , is also empowered to investigate improper or unlawful
conduct by employees of any State institution, the unlawful appropriation or expenditu re
of public money or property and any offences referred to in part I to 4 or sections 17, 20,
or 2 1 (insofar as it relates to the aforementioned offences) of chapter 2 of the Preve ntion
and Combatting Corrup t Activit ies Act, 2004, (POCA). These powers are authorised in
connection with the affairs of any State institution and any unlawful or imprope r conduct
by any person that has caused or may cause serious harm to the interests of the public or
any catego ry thereof.
[29] The Special Tribuna l's jurisdiction to make an order under s 172 of the Constitution
has been challenged, wa rranting an analysis of the legal framework.
The Powers and functions of Special Tribunal
8. (I) A Special Trib unal sha ll be independent and impartial and perform its functions
without fear, favour or prejudice and subject only to the Constitution and the law.
(2) A Special Tribunal shall have jurisdiction to adjudicate upon any civi l dispute brought
before it by a Special Investigat ing Unit or any interested party as defined by the
regulations, emanating from the investigation by such Special Lnvestigating Unit, including
the power to-
( a) issue suspe nsion orders, interlocutory orders or interdic ts on app lication by such Unit
or party: and •
(b) make anv order which it deems appropriate so as to give effect to any ruling or 'decision
given or made by it.
Underlining for emph asis
11
[30] It is trite that a purposive approach must be applied when interpreting any
legislation. The powers of the Special Tribunal deri ve from the SIU Act. In particular, the
words in s 8(2) (b) provide that the Special Tribunal may:
"make any order which it deems appropriate so as to give effect to any ruling or decision given or
made by it."
[31] A purposive canon of construction is consistent with a contextual approach to
statutory interpretation. It is now trite that courts must properly contextualise statutory
provisions when ascribing meaning to the words used therein. While maintaining that
words should generally be given their ordinary grammatica l meaning, the Constitutional
Court has made clear that a contextual and purposive approa ch must be applied to statutory
interpretation.
[32] Mogoeng CJ stated the Independent Institute of Education:
·'Court s must have due regard to the context in which the words appear, even where the words to
be construed are clear and unambiguous.
This court has taken a broad approach to contextualising legislative provisions, having regard to
both the internal and external context in statutory interpretation. A contextual approach requires
that legislative provisions are interpreted in light of the text of the legislation as a whole (internal
context). This court has also recognised that context includes, amongst others, the mischief which
the legislation aims to address, the social and histori ca l background of the legislation , 2nd, most
pertinently for the purposes of this case, other legislation (external context). That a contextual
approach mandates consideration of other legislation is clearly demonstrated in Shaik. In Shaik this
court considered context to be all-important in the interpretative exercise. The context to wh ich the
court had regard included the well-establi shed rules of criminal procedure and evidence and , in
particular, the provisions of the Criminal Procedure Act.' 2
particular, the provisions of the Criminal Procedure Act.' 2
(33] It is also clear that in terms of s 4 of the SIU Act:
Funct ions of the Special Investigating Unit
2 /11depe11de111 /ns1i1111e of £d11rn1in11 (Pty) Ltd, , KwaZ11/11-Natal law Society and Others 2020 (2) SA 325 (CC) paras 41-42
12
Underlining for emphasis
4. (I) The functions of a Speci al Investigating Unit arc, within the framewo rk of
its terms of reference as set out in the proclamation referred to in section 2( I) •
(a) to investigate all allegations concerning the matter.
(b) to collect evidence regarding acts or omissions which are relevant to
its investigation and, if applica ble. to institute proce edings in a Special
Tribunal
( c ) to present evidence in proceed ings brought before a Specia l Tribun al.
(34) The preamb le of the SIU Act is clearly aimed at rooting out corruption. This context
cannot be overlooked when deter minin g whether the Special Tribunal has the power to
make just and equitable orders under s 172 of the Constitution.
"To provide for the esta blishment of Special investigating Units for the purpose of investigating
serio us malp ract ices or maladministration in connection with the adm inistration of State
institutions, State assets and public money as well as any conduct which may ser ious ly harm the
interests of the public. and for the establis hment of Special Tribunals so as to adjmli <.;ale upon civil
matters emanat ing from investigatio ns by Special Invest igating Un its; and to provide for matters
incidental there to."
[35) It follows that it is necessary to consider the entire context and purpo se of the STU
Act, and there can be no doubt that whateve r power s the Legislature had in mind when
promulg ati ng the SIU Act, the Spec ial Tribunal was given the power to make meaningful
orders whe n adjudica ting matters before it.
[36] Matojane J in Caledon River Properties (Pty) Ltd t/a Magwa Construction and
Another v Special Investigating Unit and Another (375 & 419/202 4) [2026] ZASCA 05
(16 January 2026) had no difficu lty in finding that the Special Tribunal could make orders
in terms of 172( I )(a) of the Constitution in declaring contracts inva lid due to non
comp liance withs 2 17 of the Cons tituti on. He described the discretion under s 172(l)(b)
comp liance withs 2 17 of the Cons tituti on. He described the discretion under s 172(l)(b)
as not mechanical or circumsc ribed by rigid rules.
13
"[8] That discretion is not mechanical , nor is it circumscribed by rigid rules. As explained in
Trenco11 Construction (Pl)) Ltd v Industrial Development Co,poration of South Africa Ltd
(Trencon),3 it is a discretion in the true sense, requiring a value-laden judgment informed by all the
relevant facts and by constitutional princ iple. The court is enjoined to fashion a remedy that is just
and equitable in the particular circum stances, striking a careful balance betwe en correcting
const itutional invalidity , vindicating the rule of law, and avoiding outcomes that would themselves
be unjust.
[9] In determining what relief was j ust and equitable , the Tribunal treated the matter as one of
legal principle and did not engage with the extensive witness statements and expert reports filed by
the applicants. It ordered that the applicants be divested of all profits derived from the unlawful
contracts and limited their recovery to reasonable expenses , to be determined by way of a
debat ement of accounts."
[37] It follows that despite the parties in Caledon agreeing to the Special Tribunal having
s 172 (I) (a) powers, the concu rrence by the entire bench is evident. If the SCA were of the
view that the Spec ial Tribuna l's powers were limited , it would have said so and not
accepted the agreement between the parties on the jurisdictional powers of the Special
Tribunal. It follows , therefore , that the Special Tribunal has the necessary powers to order
repayment or make any other order that is appropriate. S 8(2) of the SIU Act is the statutory
foundation for the Specia l Tribun al to make any order it deems appropriate to give effect
to any ruling or decision made.
Delay in launching this review application
(38] The respondents' case is that the SIU has delayed in instituting this legality review.
The importance of not delaying matters derives from the principles of the Rule of Law,
under which certainty is paramount.
under which certainty is paramount.
1 Tre11co11 Co11slrnc1io11 (Pty) ltd v /11d11strial Development Corporation of Sou/It Africa ltd and Another (20 I SJ ZACC 22, 20 IS
(S) SA 245 (CC); 20 IS ( I 0) BCLR I I 99 (CC).
14
(39] The respondents concede that the Special Tribunal has a discretion to condone
delay, but they sub mit that the delay in this case has been inordinate. The funding was
granted in 2018, and these proceedings were instituted in 2025. The six-year delay is fatal.
[40] In the case of the MECfor Health, Eastern Cape and Another v Kirland Investments
(Pty) Ltd t/a Eye & Lazer Institute Member of the Executive Council for Health, Eastern
Cape and Another v Kirland Investments (Pty) Limited tla Eye & Lazer Institute, Cameron
J stated that:
'·(T)herc is a higher duty on the state to respect the law, to fulfil procedural requirements
and to tread respectfully when dealing with rights. Government is not an indigent or
bewildered litigant, adrift on a sea of litigious uncertainty , to whom the courts must extend
a procedure-circumventing lifeline." 4
The respondents submit that the absence of a proper explanation of the STU's delay in
launchin g the application is fatal.
[ 41] The respondents urge the Special Tribunal to exercise caut ion . The State has all the
resources at its disposal to expedite an investigat ion. Mabindla-Boqwana AJA opined in
the case of Engineer ed System Solutions5 that:
·'Where the delay is found to be unreasonable, there must be a basis for a court to exercise its broad
discretion to overlook it. This must be gathered from the available facts. " 6
( 42] In evaluat ing delay, several factors must be considered. The first is -
4 MEC )or I lea/th. t:astem Cape and Another v Kir/a11d l11vest111ems (Pt)~ ltd tla Eye & la=er /11stit111e 2014 (3) SA 481 (CC} A
para 82.
s Special l111•estigat111g U11i1 And A11other v E11gi11eered Systems Snh11io11s (P1y) l,tJ 2022 (5) Sa 416 (Sea)
6 Buffalo City Metropoli1a11 M1111icipali1y ,. Asia Constr11ctio11 (Ply) ltd 2019 (4) SA 331 (CC) (2019 (6) BCLR 661; (2019) ZACC
15)
IS
'potential prejudice to affected parties as well as the possible consequences of setting aside the
impugned decision. The potential prejudice to affected parties and the consequences of declaring
conduct unlawful may, in certain circumstances, be ameliorated by the court's power to grant a just
and equitable remedy, and this ought to be taken into account.'
The seco nd factor to be considered is the nature of the impugned decision.
[ 43) The jurisprudent ial principle s relating to delay are clear: the merits of the decision
sought to be set aside must be considered , Mabindla-Boqwana AJA. She referred to the
case of South Aji·ica11 National Roads Agency Ltd v City of Cape Town, a judgment by
Navsa IA which highlighted that the merits of the impugned decision are a critical factor
in determining whether it is in the interests of justice to condone the delay. That would
have to include a consideration of whether the non-compliance with statutory prescripts
was egregious." 7
[ 44] Mabindla-Boqwana AJA went on to explain that the Constitutional Court in Buffalo
City Metropolitan Municipality v Asia Construction (Pty) Ltd endorsed the test followed
by the SCA in Gqwetha and later approved by the Constitutional Court in Khumalo , that
in assessing delay, the first question to be determined is the reasonableness of the delay. If
the delay is found to be unreasonable, the next question is whether it should nevertheless
be overlooked in the interests of justice.
·'The reasonableness of the delay is assessed by considering the expla nation for the delay, which
must cover the entire period of the delay:
'Where the delay can be explained and just ified, then it is reasonable, and the merits of the review
can be considered .... But ... where there is no exp lanation for the delay, the delay will neces sarily
be unreasonable.'
[30) Where the delay is found to be unreasonab le, there must be a basis for a court to exercise its
broad discretion to overlook it. This must be gathered from the available facts. In this evaluation
a number of factors must be taken into account. The first is -
7 So111h A(i-icw1 Na11011al Roads Agency ltd v Ca/JC Town City 2017 (I) SA 468 (SCA) ([2016] 4 All SA 332; [2016] ZASCA 122)
(Sanral).
16
'potential prejudice to affected parties as well as the possible consequences of setting aside the
impugned decision. The potential prejudice to affected parties and the consequences of declaring
conduct unlawful may in certain circumstances be ameliorated by the court's power to grant a just
and equitab le remedy and this ought to be taken into account.' 8
Footnotes omitted
[ 45] Mabindla-Boqwana AJA went on to point out that
"The Constitutional Court in Gijima 9 made it clear that even if there is no basis to overlook the
unreasonable delay, the court is obl iged by virtue of the provisions of s 172( I }(a) of the Constitution
to declare invalid any law or conduct that 1s inconsistent with the Constitution, to the extent of its
invalidity. 10 The Constitutiona l Cou rt in ASLA held that this applies when the unlawfulness is clear
and undisputed. 11 It further went on to state that the Gijima principle should 'be interpreted
narrowly and restrictively so that the valuable rationale behind the rules of delay is not
undennined' .12 At the same time, it shou ld not be ignored, but applied where there is an indisputable
and clear inconsistency with the Constin1tion."
[ 46] In this matter, T find that the scheme established by the two brothers, Mukutu, is
clearly fraudulent. Mr N Mukutu's lack of knowledge cannot be explain ed in any plausible
or credible manner by him. The raising of R l Smillion is no simple matter. Mr T Mukutu's
claim that he could not afford legal representation is implausible. He is a project manager
responsible for managing millions of Rand. He cou ld have drafted his own affidavit and
filed his opposition. He cou ld have, of his own accord, sought an interview with the SIU
investigator. He cou ld have produced documentation demonstrating the project's
authenticity. Instead, he sought to remain silent and ride on his broth er's coattai ls, rather
than deposing to an affi davit and opposing the relief sought.
than deposing to an affi davit and opposing the relief sought.
" 81!/Jalo City Metmpolita11 M1111icipality 1• Asia C1111stmctio11 (Pry) ltd 2019 (4) SA 331 (CC)
9 Staie /11formatio11 Technology Agency SOC ltd v Giiima lfoldings (Pty) ltd 2018 (2) SA 23 (CC)
10 ASLA para 63 referring to Gijima para 52.
11 ASLA para 66.
11 ASLA para 71.
17
[ 47] Whilst there is some merit in the respondents' assertion that no full explanation has
been provided for the delay , the SIU has issued a terse response stating that it was
investigating the case and that the process takes time. The question is, should this delay be
overlooked in the light of the merits of this review? Consideration must be given to the
merits of the case put up by the SIU, whether the delay caused prejudice to the respondent ,
and whether overlooking the delay undermines the pub lic interest. When considering the
delay , it must be balanced with what Navsa J described as the egregiousness of the conduct.
In this case, the woeful failure of the relevant respondents to mou nt a credible defence
leads to the ineluctable conclusion that the scheme was fraudulent , and thus the
egregiousness of the conduct must overcome the delay difficulties.
[ 48] A lot of planning and intention went into executing the scheme from obtaining a
copy of the cons titutio n of Madumelani, to appointing fake office bearers, to inserting
fraudulent signatures to the grant application, opening up a bank account and immediate ly
paying out millions of rand, and as stated, ultimately Mr N Mukutu receiving the sum of
R 7 489 000.00, almost 50% of the grant amount. This leaves no uncertain ty or doubt that
this scheme is consistent with a pattern of corruption and thus falls in into the category
foreshadowed in the case of Gijima .
[ 49] The available facts and context are clear. South Africa is in the midst of a
catastrophic corruption epidemic. Numerous investigations must be conducted by the SIU.
The caseloads are overwhelming. In my view, such facts as having been submitted by the
SIU cannot be rejected. Of course, there is a higher duty on the State to respect the law and
to move with the requisite expedition. But that is not the end of the enquiry.
Disputes of fac t
[50] The respondent submits that the versions of Mr Makutu and his brother do not
[50] The respondent submits that the versions of Mr Makutu and his brother do not
contain inherent improbabilities , and their conduct should not be discredited. Counsel
submitted that their versions are not palpably implausi ble or far-fetched, or clearly
18
untenable , so as to warrant their rejection on paper. It was submitted that there was no
obligation on them to obtain affidav its from Mr. Mukondoleli and others to support their
defence. The evidence presented by the respo ndents did not underm ine the clear paper trail
and affidavits from witnesses presented by the SIU. The two brothers Mukutu did not
approach their defence with any vigo ur. It would have been a simp le matter for the brothers
to invite the STU invest igator to a site visit to exp lain the photogra phs and point out the
work done , thereby justifying the expenditure of Rl5 million. It is trite that the onus rests
on the SIU , but when the principal defence of the respondents was that the bui ldings had
been built , it requ ired an easy step to justify a credible and plausible defence.
[5 I] Accordingly, I find that the delay is not an impediment to granting the relief. The
questions relating to the disputes of fact are not of such a natu re to overcome the objective ,
undis puted facts.
Piercing the Corporate Veil
[52) The STU has sought an orde r lifting the corporate veil of the companies and the other
juristic entities that may be part of the fraudulent scheme. When a corporate veil is pierced.
a court strips the corporation of its limited liability shield. Section 20(9) of the Companies
Act No 7 1 of 2008 (the Act) s 20(9) provide s as follows:
·' 20 (9) lf, on application by an interested person or in any proceedings in which a company is
involved, a court finds that the incorporation of the company, any use of the company, or any act by
or on behalf of the company, constitutes an unconscionable abuse of the juristic personality of the
company as a separate entity, the court may-
(a) declare that the company is to be deemed not to be a juristic person in respect of any right,
obligation or liability of the company or of a shareholder of the company or, in the case of a
non-profit company, a member of the company, or of another person specified in the
non-profit company, a member of the company, or of another person specified in the
declaration; and
(b) make any further order the court considers appropriate to give effect to a declaration
contemplated in paragraph (a).
19
[53] Clearly, where lhere is unconscionable abuse of a juristic entity. its corporate
identity may be disregarded. In the case of Knoop NO and Others 11 Birkenstock Properties
(Pl)) Ltd and Others, no 7095/2008 Nxusani AJ stated:
"The corporate veil may be pierced where there is proof of fraud of dishonesty or other improper
conduct in the establishment or the use of the company or the conduct of its affairs and in this
regard it may be convenient to consider whether the transactions complained of were part of a
·'device ", "stratagem" , "cloak" or a "sham". The shareholders can be held personally
liable. Thi s happens most ly when share holders are involved in fraudulent activity,
as found in Cape Pac[fic Ltd v Lubner Controlling Investments (Pty) Ltd and
Others 13; or if shareholders are improperly using the separate legal personality, as
found in Robin son v Randfontein Estat es Gold Mining Co Ltd 14. See
also The Shipping Corporation oflndia Ltd,, Evdomon Corporation and Another 15.
[54] The cou rts have not applied this punitive step lightly as they try to uphold the
separate legal personality. However , when the conduct is of such a nature to justify such a
step, there is no hesitation to impose such a ruling . The court in Knoop NO stated at para
14, that:
"When there is fraud, dishonesty or some other improper conduct, policy dictates that the court
engages in a bala ncing exe rcise. The co urt considers the circumstances and facts of each case to
determine whet her. in th!.! appropriate case, it is proper to disregard the corporate personality and
apportion liability where it belongs· (sec also the Cape Pac[lic Ud case at paras 31 and 32)."
[55] S 77 of the Act also imposes an obligation on director s who knowingly engage in
fraudulent activity to be held liable to the company for any damages or losses resulting
from a fraudulent act, presenting false or mislead ing financial statements or prospectuse s.
In terms of s 1 of the Act, 'knows ' means ' that the person either -
In terms of s 1 of the Act, 'knows ' means ' that the person either -
(a) had actual knowledge of the matter; or
13 1995 (-1) SA -90 IA)
1• 1n I AD 1c,x
15 199-1 ( I l SA 550 I A) al para~ 43 to -14
20
(b) was in a position in which the person reasonably ought to have -
( i) had actual knowledge.
(ii) invest igated the matter to an extent that wou ld have provided the person with
actual knowledge; or
(iii) taken other measures which, if taken, woul d reasonably be expected to have
provided the person wit h actua l knowledge of the matter ); and
failed to vote against a prohibited act invol ving, for exa mple, share issues or the
approval of false fina ncial statements.
[56) This is a clear case in which the directors of Mudonde and RUM knew of the fraud
and used the compan ies as too ls to perpetuate it; therefore , the director s must be held liable .
See also ex parte Gore 16
[57) As opined by Ms N Schoeman
"'The courts have traditionally followed a conservative approach in piercing the coq>orate veil
(based on the common law) - even more so in the case of the statutory provision contained in the
Close Corporations Act. This is despite there being no inherent separation between management
and ownership, which means pierci ng the veil should theoretically have been applied less
conservatively by the courts. Under the new Companies Act. the wording of s 20 supports the
conservati, ·e approach followed under the common-law concept of piercing the corporate veil.
In addition, in my opini on, the use of the word 'unconscionable' highlights the cou11's conservative
approach as opposed to the common law position, which "as applied conservatively. The
distinctio n, in my view. would now be similar to that of negligenec versus gross ncgligcncc.'' 17
[58) In this case , the facts are such that the conduct of the antagonis ts is unconsc ionable,
which just ifies the piercing of the corporat e vei l. Money earma rked for a cultural village,
a pride and joy of any commun ity, has been lost to a fraudul ent scheme.
16 Er Pane Gore and Others fl'NO 2013 (3) SA 382 (WCC)
17 Piercing 1he corporate veil under the New Companies Act June I st, 2012. Is s 20(9) read withs 218 a codification of the common
law concept or 1s II further reaching? By Nico lene Schoeman De Rebus June 2012
21
Co11clusio11
(59] The version of the two respondent s that ultimately instructed counsel to argue this
matter failed to attach any meaningful affidavits addressing the merits of the fraudulent
scheme as described by the SIU. Th is woeful lack of confirmatory affidavits , in parti cular
from T Mukutu, to describe how people , such as Ms Siguca, Mr Lethuli, and others, were
described as office bearers and their signatures falsified. Further , the new member s were
added to the management of Madumelani , but their names were not reflected in the Social
Development databa se. No resolution was submitted by Mr T Nkutu to reflect the change
of membership. Jt is overwhelmingly probable that the original member s knew nothing of
this scheme. There are no affidavits from the Chair of the Cultu ral Village in support of
the respondent s 'version. The respondents ' defence is essentially based on hearsay as Mr
Mukutu allegedly knew very little about anything relating to the project. Mr. N Mukutu 's
explanation is not credible. In the circumstanc es, the SIU has made out a proper case for
the relief sought.
Order
The following order is made:
I. The decision of the National Lotteries Commission of 22 February 2018 to award
funding to the first respondent in the amount of R 14,000,000 is hereby decla red
invalid , unlawful , and is reviewed and set aside.
2. The contract between the National Lotteries Commission and the first respondent ,
Madumelani NPO, dated 28 February 2018, is hereby declared invalid, unlawful ,
and is set aside as void ab initio.
3. It is hereby declared that the 2nd , 3rd, 4th, 6th , 7th, 8th, 9th, and 10th respondents
acted in concert and with the intention to defraud the National Lotterie s
Commi ss ion.
4. It is hereby declared that the 6th, 7th, 8th, and 10th responde nts are hereby deemed
not to be juristic persons in respect of any right, obligation , or liability of these
companies to the National Lotteries Commi ssion.
22
5. The directors are held personally liable for the repayment of the amount of
Rl4 .000 ,000.
6. The 2"\ 3
rd
, 4
th
, 6
th
, ?
11
, 8
1h
, 9th, and l 0th respondents are ordered to repay jointly
and severally to the appl icant, the amount of R 14,000,000 , with the one party paying
the other to be absolved.
7. The respondents are ordered to pay the costs of this application , includin g the cost
of one counsel jointly and severally , one party paying the others to be absolved.
DEPARTMENT OF JUSTICE AND CONSTITUllOtlAL DEVELOPMENT
~PECIAl TRIBUNAL
CNR AM•N DA AVENUE & RIFlf RANG! RO~D. OAKOENf
IIEGISTRAR
JUDGE M VICTOR
PRESIDENT OF THE SPECIAL TRIBUNAL
Appearances:
For the applicant: Adv I Hlalethoa
Instructed by: Ramashu Mash ilc Twala Inc
For the Third & Sixth Respondents: Adv C.A Kriel
instruc ted by: Machobane Kri el Attorneys
Date of hearing: 26 September 2025
Date of judgment: 20 February 2026
Mode of delivery
This judgment is handed down by ema il transmission to the parties' legal representatives,
uploading on Cascline and release to SAFUI and AFRlCANLII. The time of delivery is
d~\:mcd to be 14lJ00.
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