SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
IN THE SPECIAL TRIBUNAL ESTABLISHED IN TERMS OF SECTION 2(1)
OF
THE SPECIAL INVESTIGATING UNITS AND
SPECIAL TRIBUNALS ACT 74 OF 1996
(REPUBLIC OF SOUTH AFRICA)
HELD VIRTUALLY
CASENO: GP21/2025
In the matter between:
SPECIAL INVESTIGATING UNIT Applicant
and
THE NATIONAL LOTTERIES COMMISSION First Respondent
SOUTH AFRICAN SPORTS CONFEDERATION
AND OLYMPIC COMMITTEE Second Respondent
VINESH MAHARAJ N.O. CHIEF FINANCIAL
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: YES
(3) REVISED: YES
27/05/2026
_______________ ____________
SIGNATURE DATE
2
OFFICER: SASCOC Third Respondent
MSHANDUKANI FOUNDATION NPO Fourth Respondent
MUKUNDU KHUMELI Fifth Respondent
NDUNGISELO REFACE MURANDANA Sixth Respondent
IPHI LUKOKO Seventh Respondent
PRETTY SHANDUKANI Eighth Respondent
MASHUDU SHANDUKANI Ninth Respondent
BENZA CONSULTING Tenth Respondent
IMBIZO EVENTS Eleventh Respondent
IRONBRIDGE TRAVELLING AGENCY AND
EVENTS Twelfth Respondent
KARABO CHARLES SITHOLE Thirteenth Respondent
KULEKA MUSIC PRODUCTION Fourteenth Respondent
MINENHLE DLAMINI Fifteenth Respondent
MSHANDUKANI HOLDINGS (PTY) LTD Sixteenth Respondent
NDZHUKU TRADING CC Seventeenth Respondent
3
Summary: Lotteries Act 57 of 1997 — Distributing Agency — Due Diligence —
Fiduciary Duty— Misrepresentation— Fraud — Ultra Vires Grant Award— Unlawful
Enrichment—Legality Review — Declaration of Invalidity — Just and Equitable
Remedy.
JUDGMENT
MASHILE J
Introduction
[1] This is a review application brought under the principle of legality, in terms of
which the Applicant (“the SIU”) seeks the following relief:
1.1 An order reviewing and setting aside the decision of the First
Respondent, (“National Lotteries Commission”), taken on 13 July 2016,
to award funding to the Second Respondent, (“SASCOC”), in the
amount of R24 980 000.00.
1.2 An order reviewing, setting aside, and declaring unlawful and invalid ab
initio the grant agreement concluded on 13 July 2016 between the
National Lotteries Commission and SASCOC (“the impugned
agreement”).
1.3 An order reviewing, setting aside, and declaring unlawful and invalid the
payment of R24 980 000.00 made by the National Lotteries Commission
to SASCOC pursuant to the impugned agreement.
[2] In addition, the SIU seeks an order:
2.1 Directing SASCOC, together with all the other Respondents excluding the
Fifth and Sixth Respondents (Khumeli and Murandana), to repay the
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amount of R24 980 000.00 to the SIU, jointly and severally, the one
paying the others to be absolved.
2.2 Alternatively, an order granting such appropriate consequential relief as
contemplated in Section 4(1), read with Section 8(2)(b) of the Special
Investigating Units and Special Tribunals Act 74 of 1996 (“the SIU Act”),
for the recovery of the financial losses suffered by the National Lotteries
Commission, from SASCOC and all the other Respondents, excluding
Khumeli and Murandana, jointly and severally, the one paying the others
to be absolved.
[3] The SIU contends that the award of the grant funding to SASCOC and the
subsequent conclusion of the impugned agreement ought to be reversed as they were
unlawful and invalid for the following reasons:
3.1 The information furnished in the application for funding was materially
inaccurate and misrepresented facts that were decisive to the decision to
award the grant.
3.2 The National Lotteries failed to properly consider, evaluate and adjudicate
the grant application submitted by SASCOC on behalf of the Fourth
Respondent (“the Foundation”), thereby breaching its statutory and
administrative obligations.
3.3 The information furnished in the progress report submitted after the
impugned agreement was false and misleading and did not accurately
reflect the utilisation of the grant funds or the progress of the funded
project.
3.4 The grant funding was not utilised for its intended purpose. It was instead
misappropriated and used for the personal benefit of the Respondents,
excluding Khumeli and Murandana, as well as their families and friends.
[4] In response to the SIU’s case, the Foundation, together with the Seventh,
Eighth, Ninth and Sixteenth Respondents (collectively referred to as “the Shandukani
Respondents”), raises six principal contentions—
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4.1 Firstly, they argue that the SIU incorrectly places reliance on procurement-
related case law, which they contend is inapplicable and of no assistance to
the issues arising in this matter.
4.2 Secondly, they submit that it is incorrect to characterise SASCOC as a
conduit of the Foundation in relation to the conclusion of the impugned
agreement with the National Lotteries Commission, contending that there
is no evidence to support such a characterisation.
4.3 Thirdly, they deny the SIU’s contention that the Foundation, through
SASCOC, applied to the National Lotteries Commission for funding,
asserting that this assertion is factually incorrect.
4.4 Fourthly, they deny that any tripartite agreement was ever concluded
between or amongst SASCOC, the National Lotteries Commission, and
the Foundation, and aver further that they have no knowledge of the
existence of any such agreement.
4.5 Fifthly, the SIU has adduced no evidence to suggest that the Shandukani
Respondents were involved in any fraudulent conduct, whether in relation
to the receipt of the grant funds or the manner in which such funds were
subsequently distributed.
4.6 Sixthly, the Shandukani Respondents contend that there exist material
disputes of fact which cannot be resolved on the papers alone. They further
submit that this aspect of the matter should not be referred to oral
evidence, on the basis that the SIU was aware of these disputes at the time
it initiated the proceedings before the Tribunal and nevertheless elected to
proceed by way of motion.
[5] SASCOC is legally represented and opposes the application only to the limited
extent that it seeks to be excused from repaying the amount of R150 000.00, which it
charged for its role in facilitating the funding application on behalf of the Foundation.
Save for the aforegoing, SASCOC supports the application brought by the SIU. The
Third Respondent (“Maharaj”), who was the Chief Financial Officer of SASCOC at
Third Respondent (“Maharaj”), who was the Chief Financial Officer of SASCOC at
the time the application was processed, appeared in person. His position is that the
6
Tribunal should not hold him jointly and severally liable with the other Respondents,
on the basis that his involvement in the matter was not personal but arose solely from
his role as Chief Financial Officer.
[6] The Eleventh Respondent (“Imbizo Events”) has concluded a settlement with
the SIU, in terms of which it undertook to repay an amount of R70 000.00 to the
National Lotteries Commission. Similarly, the Fifteenth Respondent (“Dlamini”) has
entered into a settlement with the SUI, agreeing to pay theR50 000.00 to the National
Lotteries Commission. The SIU has accepted both these settlement proposals and the
two parties have honoured their undertakings. The remaining Respondents neither
oppose the application nor are they legally represented before the Tribunal.
Factual Matrix
[7] The facts in this matter are largely uncontested. The Foundation, however, has
identified certain inconsistencies in the SIU’s heads of argument. Against that
backdrop, I draw extensively on the facts as set out by the SIU, subject to
highlighting, where necessary, those discrepancies to which the Foundation takes
issue. It is common cause that the President of the Republic of South Africa (“the
President”) issued Proclamation R32 of 2020 (“the Proclamation”), directing the
Special Investigating Unit (“the SIU”) to investigate specified allegations relating to
the affairs of the National Lotteries Commission.
1
[8] Pursuant to the issuance of the Proclamation, the SIU commenced its
investigation. In the course thereof, it laid bare the existence of a scheme in terms of
which bona fide and lawfully registered Non -Profit Organisations (“NPOs”) were
established and utilised by certain individuals, acting in concert with employees
and/or officials of the National Lotteries Commission. The purpose of this scheme
1 The extended investigation, authorised by Proclamation No. R.32 of 2020, focuses on maladministration in the National Lotteries Commission's affairs, specifically
concerning the investment and allocation of funds from the National Lottery Distribution Trust Fund between January 1, 2014, and November 6, 2020. Moreover,
Proclamation R293 of 2025 amends that original investigation mandate (Proclamation R. 32 of 2020) in two critical ways. It extends the investigation's timeframe,
allowing the SIU to probe allegations of serious maladministration from the inception of the original proclamation in November 2020 up to 10 October 2025, effectively
extending the investigation period by five years. It adds 21 new categories of procurement and contracting to the investigation. These include a wide range of services in
which it is alleged that procurement processes were flouted, and public funds were misused.
7
was to misappropriate the National Lotteries Commission’s trust funds —funds
statutorily earmarked for altruistic and public -interest purposes —for the personal
benefit of those involved.
[9] The modus operandi of these characters, inter alia, involved the seizure of
lawfully registered NPOs —that is, the clandestine use of their documentation and
information, or the fraudulent alteration of certain of their records. These “hijacked”
NPOs were then utilised to apply for grant funding from the National Lotteries
Commission. Once such grant funding was approved and disbursed, the funds were
unlawfully and improperly appropriated for the personal benefit of the perpetrators.
The Shandukani Respondents allege that when they concluded the agreement with
SASCOC, they were neither aware that SASCOC had applied to the National
Lotteries Commission for funding nor that SASCOC had represented to the National
Lotteries Commission that it was applying for funding on its behalf.
[10] On 7 July 2016, the SIU alleges that SASCOC submitted an application for
grant funding to the National Lotteries Commission on behalf of the Foundation. The
application sought a one -year conduit grant in the amount of R34 830 000.00.
Attached to the application were the following documents:
9.1 The Constitution of the Foundation;
9.2 A detailed funding proposal, including a budgetary breakdown of the
amount of R34 830 000.00, intended to support preparations for the Rio
de Janeiro 2016 Olympic Games.
[11] The application was adjudicated by the Charities Distributing Agency, a
structure accountable to the Board of the National Lotteries Commission. Its function
is to consider, evaluate and adjudicate applications for grant funding or to make
recommendations for the funding of worthy charitable causes. On 13 July 2016, the
National Lotteries Commission, duly represented by Mr M. Ncula (“Ncula”), acting in
his capacity as Chairperson of the National Lotteries Commission Adjudication
8
Committee, and purporting to act on behalf of the National Lotteries Commission,
approved grant funding in the reduced amount of R24 980 000.00.
[12] On 15 July 2016, the Foundation and SASCOC concluded an independent
implementing agreement in respect of four provinces. In terms of that agreement,
SASCOC was appointed as the implementing and conduit entity responsible for the
administration, disbursement, and oversight of the approved grant funds, in
accordance with the approved proposal, the applicable conditions of the grant, and the
objectives of the funding.
[13] On 19 July 2016, the National Lotteries Commission, represented by Mr
Thabang C Mampane (“Mampane”), in his capacity as Commissioner of the National
Lotteries Commission, concluded a grant agreement with SASCOC. SASCOC was
represented in the conclusion of the agreement by Mr Tubby Reddy, who was at the
time the Chief Executive Officer (CEO) of SASCOC. On 20 July 2016, a payment in
the amount of R24 980 000.00 was made by the National Lotteries Commission to
SASCOC pursuant to the said grant agreement.
[14] The Foundation was registered on 16 February 2016 as an NPO, bearing
registration number 166–661 NPO. The significance of the date of registration of the
Foundation will become clearer later in this judgment. The Foundation applied for the
grant on 07 July 2016, approximately four months after its registration. Following the
approval of the grant, SASCOC paid an amount of R24 830 000.00 to the Foundation
and retained an amount of R150 000.00, as contemplated in clause 9.3 of the grant
agreement, ostensibly in respect of services rendered. SASCOC submitted an undated
final report to the National Lotteries Commission covering the reporting periods 15
July 2016 to 30 July 2016, and 18 July 2016 to 30 September 2016, respectively.
[15] The stated purpose of the narrative final report was to provide an overall
account of the utilisation of the grant and the impact thereof. According to the final
account of the utilisation of the grant and the impact thereof. According to the final
report submitted by SASCOC, a total amount of R25 000 000.00 was approved and
9
allegedly expended in respect of the “Send -Off to Rio Campaign”. The report is
misleading as the total amount disbursed to the Foundation was R24 980 000.00, not
R25 000 000.00. Furthermore, no supporting documentation or evidence was
produced or annexed to the report to substantiate that the grant funds were utilised for
their intended purpose.
[16] As part of its investigation, the SIU conducted a financial analysis and
reviewed the bank statements and transactions of the Foundation for the period before
and after the payment of the grant by SASCOC. The investigation revealed that the
Foundation's bank account was opened on 12 April 2016, and as of 25 July 2016, the
account reflected a balance of R500.00. On 21 July 2016, SASCOC paid an amount of
R5 000 000.00 into the Foundation’s bank account. On 27 July 2016, SASCOC made
a further payment of R15 000 000.00 to the Foundation. On the same date, SASCOC
made an additional payment in the amount of R4 830 000.00 to the Foundation.
[17] From the information set out above, it is evident that
the total amount paid by SASCOC to the Foundation amounted to R24 830 000.00. An
examination of the Foundation’s bank account, namely First National Bank account
number 626 […] , revealed that on 20 July 2016 SASCOC transferred an amount of
R24 830 000.00 into the account. Shortly after receipt of the grant into the
Foundation’s bank account, the Foundation, in turn, effected a series of payments to
various companies and individuals. These payments were made within a relatively
short period following the transfer and are set out below:
16.1 R15 350 000.00 to Ironbridge Travel Agency, FNB account, account
number 625[ …] , with the reference being “SASCOC events” from 22
July to 28 September 2016.
16.2 R7 229 315.00 by the Foundation to the Sixteenth Respondent
(“Mshandukani Holdings”), FNB account, with account number
622 […] , the reference number being “SASCOC events” from 22 July
622 […] , the reference number being “SASCOC events” from 22 July
2016 to 6 March 2017. The Ninth Respondent (“Mashudu Shandukani”)
is a director of both Mshandukani Holdings and the Foundation.
10
16.3 R2 000 000.00 to the Seventeenth Respondent’s (“Ndzhuku Trading’s”)
FNB account, with account number 622 [ …] , with reference as
“Ndzhuku SASCOC event”, from 23 July to 28 July 2016.
16.4 On 22 July 2016, the Foundation paid a total amount of R245 000.00
from its account to the following beneficiaries:
Beneficiary Amount Banking details Reference
Benza
Consulting
R80 000.00 197[… ] [FNB] SASCOC
Events
Imbizo
Events
R85 000.00 625[… ] [FNB] SASCOC
Events
Koleka
Music
Productions
R30 000.00 620[… ][FNB] SASCOC
Events
Minenhle
Dlamini
R50 000.00 620[… ][FNB] SASCOC
Events
[18] The financial analysis further revealed that certain companies which received
payments from Ironbridge Travel Agency were linked to former employees of the
National Lotteries Commission, as well as to their respective family members and/or
relatives. All the identified employees have since resigned from the National Lotteries
Commission. The investigation confirmed the following payments:
17.1 R450 000.00 to Mr Philemon Letwaba, who was employed as the Chief
Operations Officer of the National Lotteries Commission at the time.
17.2 R600 000.00 to Mr T.S. Maselwa, who at the time was employed as the
Manager: Legal Services of the First Respondent.
17.3 R3 000 000.00 to Mosokodi Business Trust, an entity which is linked to
Mr Philemon Letwaba, the former Chief Operations Officer of the
National Lotteries Commission.
[19] These payments, having been made to individuals and entities connected to
senior officials of the National Lotteries Commission, raise serious concerns regarding
11
potential conflicts of interest and the propriety of the transactions under investigation.
Against this backdrop, the Special Investigating Unit (“SIU”) was duly authorised to
initiate the present proceedings. Consequently, on 27 March 2024, the SIU instituted
these proceedings seeking, inter alia , the review and setting aside of the award of the
funding and the subsequent conclusion of the contract.
Issues
[20] The primary issue for determination is whether the SIU has established a
proper case for the review and setting aside of the contract, and for a declaration that
the contract is invalid, unlawful, and accordingly null and void ab initio . A related
issue is whether the payment of R24 980 000.00 made to SASCOC should likewise be
reviewed, set aside, and declared invalid and unlawful. In resolving these issues, the
Tribunal must also determine whether the evidence supports the allegation that the
Foundation, acting together with SASCOC and certain employees of the National
Lotteries Commission, engaged in conduct amounting to the defrauding of the
Commission.
Legal Framework
[21] The funding granted by the National Lotteries Commission to SASCOC is
governed by the provisions of the Lotteries Act, No. 57 of 1997 (“Lotteries Act”),
which establishes the National Lotteries Commission as a statutory body. One of the
primary functions of the Commission is to fund worthy causes through the National
Lotteries Distribution Trust Fund (“the Fund”), established in terms of Section 21 of
the Lotteries Act. The Fund is administered by the Board of the Commission.
Disbursements from the Fund are regulated by the Lotteries Act itself, together with
the Regulations and any Directions issued in terms thereof. Given the centrality of the
Lotteries Act to the issues arising in this matter, it is appropriate to underscore certain
of its pertinent provisions below.
[22] Section 21(1) of the Lotteries Act provides for the establishment of the Fund,
[22] Section 21(1) of the Lotteries Act provides for the establishment of the Fund,
which is managed by the Board of the Commission. In terms of Section 26(3) of the
12
Act, monies standing to the credit of the Fund are allocated for distribution, at
prescribed percentages, for various purposes, including:
21.1 Charitable expenditure;
21.2 Expenditure on or connected with the development of sport and
recreation; and
21.3 Expenditure on or connected with the arts, culture, and the national
historical, natural, cultural, and architectural heritage.
[23] Funding by the Commission may occur in one of the following ways:
22.1 Upon request by the Minister or the Board, or on the Commission’s own
initiative acting in consultation with the Board, the Commission may
conduct research into worthy causes that may be funded without the
lodging of an application as prescribed in terms of the Lotteries Act. This
process is commonly referred to as pro‑active funding;
22.2 Upon consideration of applications for grants or funding submitted by
worthy causes in accordance with the prescribed requirements; and
22.3 Upon request by the Minister or the Board, or on the Commission’s own
initiative, acting in consultation with the Board, the Commission may
invite applications for grants from worthy causes in the prescribed
manner. Section 21(1) of the Lotteries Act provides for the establishment
of the Fund, which is managed by the board.
[24] Section 22(3) of the Lotteries Act provides for the distribution of funds by a
distribution agency after it has considered, evaluated, and adjudicated an application
for a grant. Such adjudication may follow either the submission of an application by a
worthy cause or a recommendation for funding arising from research conducted by the
Commission in terms of the Lotteries Act.
[25] Section 26A of the Lotteries Act provides for the establishment of a
distribution agency accountable to the Board of the Commission. The purpose of the
distribution agency is to consider, evaluate, and adjudicate applications for grants, as
13
well as recommendations for funding of worthy causes received from the Commission
following research conducted in terms of the Act. The distribution agency is
accordingly responsible for the allocation of funds to approved beneficiaries.
Allocations to charities are further regulated in terms of Section 28 of the Lotteries
Act.
[26] In terms of Section 26H of the Lotteries Act, a decision of a distribution agency
in respect of an application for a grant is subject to review by the Board only upon
application by an aggrieved applicant, and in the manner prescribed. Any such review
must be adjudicated by a committee of the Board established specifically for that
purpose.
[27] Section 29 provides that: “So much of any sum paid into the fund as is
allocated for expenditure referred to in Section 26(3)(c) shall be held in the fund for
distribution by the Distributing Agency appointed by the Minister, in consultation
with the Minister responsible for Sport and Recreation in the national sphere of
government to distribute the allocated sum fairly and equitably amongst all persons
who meet the prescribed requirements.
[28] The distribution agency is required to consider applications for grants and may,
subject to Section 33 of the Lotteries Act, pay such grants to appropriate recipients in
accordance with the Act, the conditions applicable to its appointment, and any
directions issued by the Minister after consultation with the Minister of Sport and
Recreation, or by the Minister of Finance. Such grants are payable from the monies
allocated for the development of sport and recreation. In terms of Section 32(3)(a) of
the Lotteries Act, when considering any application for a grant under Chapter 3, the
distribution agency is obliged to comply with any criteria prescribed by, or issued
pursuant to directions of, the Minister.
[29] Section 60 of the Lotteries Act makes provision for the promulgation of
[29] Section 60 of the Lotteries Act makes provision for the promulgation of
Regulations, including, inter alia, regulations governing the procedures for the review
14
of decisions taken by a distribution agency, as well as the period within which an
application for a grant or a recommendation for funding must be finalised. The
Regulations contemplated in Section 60 were published as the Regulations Relating to
the Allocation of Money in the National Lottery Distribution Trust Fund under
Government Notice R645 of 20 July 2010. These Regulations came into force on 30
July 2010 (hereafter referred to as “the Regulations”).
[30] Regulation 3 of the Regulations of Chapter II of the Directions, prescribes that
a juristic person applying for a grant in terms of Section 28 of the Lotteries Act must
be an organisation or institution established for charitable, benevolent, or
philanthropic purposes. This includes, inter alia , friendly societies, welfare
organisations, and conduit organisations or trusts established in respect of such
organisations or institutions. An applicant must further establish that it:
(a) funds or intends to fund projects that enable individuals to participate in
activities aimed at improving the quality of life of the community as a
whole;
(b) funds or intends to fund projects that assist those who are most
disadvantaged or excluded from the community, particularly projects
relating to elderly persons, persons with disabilities, and children; or
(c) provides, or intends to provide, facilities for underprivileged persons.
[31] In addition, Section 32(3)(a) of the Lotteries Act provides that, when
considering any application for a grant under Chapter 3 of the Act, the distribution
agency is required to comply with any criteria prescribed by, or issued by direction of,
the Minister after consultation with the Board. Such criteria relate to the matters to be
taken into account in determining the persons to whom grants may be awarded, the
purposes for which grants may be allocated, and the conditions subject to which any
such allocation is to be made.
[32] On 20 July 2010, the Directions contemplated in Section 32(3)(a) of the
[32] On 20 July 2010, the Directions contemplated in Section 32(3)(a) of the
Lotteries Act, titled Directions for Distribution Agencies in Determining the
15
Distribution of Funds from the National Lottery Distribution Trust Fund, were
published in the Government Gazette under Government Notice R644 of 2010. These
Directions came into operation on 30 July 2010 (“the Directions”). The Directions
prescribe the application process and adjudication procedures to be followed by
distribution agencies.
[33] In terms of Regulation 3 of Chapter II of the Directions, upon receipt of an
application for adjudication, a distribution agency is required to determine whether the
application meets the prescribed criteria and whether the applicant has submitted all
mandatory supporting documents required by the application form. Thereafter—
32.1 if the application does not meet the prescribed criteria or does not contain
all mandatory documentation, it must be declined on the basis that it
either fails to meet the criteria or constitutes an incomplete application,
and the applicant must be informed accordingly; or
32.2 if the application meets the prescribed criteria and contains all mandatory
documentation, the distribution agency must proceed to assess the
application in accordance with Regulations 3 to 6 of the Regulations
Relating to the Allocation of Money in the National Lottery Distribution
Trust Fund.
[34] Regulation 3A of Chapter II of the Directions prescribes that:
33.1 In respect of an application that meets the requisite criteria a Distribution
Agency must finalise its adjudication within hundred and fifty (150)
calendar days from the date of receipt of the application;
33.2 in the event a Distribution Agency fails to comply with the time period
stipulated in regulation 3A it must-
33.2.1 within fourteen (14) days of the lapsing of the period in 3A furnish
reasons for its failure to the board in writing; and
33.2.2 take all necessary steps to finalise processing of the application
within a period of thirty (30) days.
16
[35] Regulation 3A (4) of the Direction authorizes the Commission to, at any time,
take steps to verify the applicant's information . Regulation 12 of the Regulations
prescribes that an applicant to whom a large grant is made must, at such period as may
have been imposed at the time when a grant is made, submit to the National Lotteries
Commission an audited financial statement in respect of the grant so awarded.
[36] Section 2F of the Lotteries Act regulates conflict and declaration of interests by
the Commissioner or any person appointed by the Commission and precludes them
from engaging in any activity that may undermine the integrity of the Commission and
from participation in a decision concerning a matter in respect of which that person has a
direct financial interest or any similar personal interest. Subsections 2F(3) to (8) further
prescribe that:
“2F. Conflict and declaration of interest—
(3) Should the Commissioner or any person appointed by the Commissioner
become aware of any conflict of interest or perceived conflict of interest or
circumstances that may compromise his or her impartiality in executing his
or her duties as so appointed, he or she must immediately stop executing
such duties and must within seven days of becoming aware of such conflict
or perceived conflict or circumstances-
(a) in the case of the Commissioner, inform the board; and
(b) in the case of any person appointed by the Commissioner,
inform the Commissioner of any such conflict or circumstance.
(4) The board or the Commissioner may consider whether such conflict or
circumstance is likely to compromise the impartiality of such a person in
the performance of his or her duties.
(5) Should the Commissioner or any employee of the Commission become
aware of any conflict of interest or perceived conflict of interest or
circumstances that may compromise his or her impartiality in executing his
or her duties, he or she must immediately stop executing such duties and
or her duties, he or she must immediately stop executing such duties and
must within seven days of becoming aware of such conflict or perceived
conflict or circumstances, inform the Commissioner or the board, as the
case may be, of any such conflict or circumstance.
17
(6) The Commissioner or the board may consider whether such conflict or
circumstance is likely to compromise the impartiality of such a person in
the performance of his or her duties.
(7) The Commissioner or the board may institute disciplinary proceedings
against any person who fails or refuses to comply with or contravenes this
Section in accordance with applicable legislation.
(8) The board or the Commissioner, as the case may be, may, after considering
whether such conflict or circumstance is likely to compromise the
impartiality of such a person, inform such a person of his or her decision
which may include and is not limited to-
(a) suspending such a person pending any further investigations;
instituting a disciplinary inquiry to probe such conflict or
circumstance; or
(b) dismissing such a person
(c) from his or her employment in accordance with applicable
legislation.”
[37] Section 2G, in part, precludes any employee of the First Respondent or his or
her spouse, life partner, immediate family member or business partner or associate, to
during the time of his or her employment at the Commission or for a period of 24
months after the termination or expiry of his or her employment, take up employment
or in any way receive any benefit from any person who received a grant.
[38] Clause 14.2. of the grant agreement provides that “if the information furnished
in the application for funding and/or progress report is false or misleading or the
Grantee fails to comply with the request from the National Lotteries Commission in
terms of clause 14.1.2, the Grantee shall be in material breach of this Agreement and
the National Lotteries Commission shall have the right to recover the amounts paid to
the Grantee under the grant of any property or assets purchased from the grant.
18
[39] Clause 17.1. of the grant agreement, provides that the management committee
or directors shall at all times act in good faith and in the best interest of the Grantee
and shall jointly and severally be held liable for any claim, loss, liability or damage
which may arise from or be incurred in respect of the grant application.
Analysis
The Information Furnished in the Application for Funding is False or
Misleading
[40] Principally, the defence advanced by the Shandukani Respondents in respect of
this ground is that they were entirely ignorant of SASCOC’s application to the
National Lotteries Commission for funding, let alone that any funds arising therefrom
were intended to have them as the ultimate destination. They further state that they
were oblivious to any cooperation between SASCOC and the National Lotteries
Commission to siphon funds from the Commission. In their view, even if the funds
ultimately made their way to them, such funds were utilised strictly in accordance
with the agreement concluded between the Foundation and SASCOC, and not
pursuant to any alleged tripartite agreement, the existence of which they deny and for
which, they contend, there is no evidence.
[41] This contention is hard to swallow in light of the uncontested evidence of
Murandana and Khumeli, who were interviewed as directors of the Foundation. The
essence of their testimony is that their identities were unlawfully appropriated and
used by the Foundation to procure its registration. Thereafter, the Foundation relied on
the illegally obtained information to apply for funding. Notwithstanding this, during
argument at the hearing, Counsel for the Shandukani Respondents submitted that,
even if the identity documents of Murandana and Khumeli were utilised without their
knowledge or consent, no fraud was thereby committed.
[42] The contention advanced by the Shandukani Respondents cannot be sustained .
It is not without significance that the identity books of Murandana and Khumeli were
It is not without significance that the identity books of Murandana and Khumeli were
specifically targeted for use in the application process. By reason of their gender and
19
ages, their identities were plainly suited to advance an application of this nature. It is a
matter of common experience that public bodies such as the National Lotteries
Commission, as well as non -profit entities like SASCOC, are inclined to view
favourably those funding applications submitted by organisations that purport to
include young women or persons living with disabilities among their members or
leadership. The inclusion of Murandana and Khumeli was therefore not accidental or
incidental, but a deliberate and calculated decision, taken with the knowledge that it
would, or at the very least was likely to, secure the outcome desired by the
Shandukani Respondents.
[43] Turning to the role of SASCOC and that of the National Lotteries Commission,
Maharaj’s evidence is that the chairperson of the National Lotteries Commission and
the Chief Executive Officer of SASCOC were central to laying the groundwork for
the process that culminated in the funding. SASCOC is therefore not insulated from
wrongdoing in this matter, notwithstanding its protestations to the contrary. The
evidence of several witnesses points to, compellingly, the chairperson of the National
Lotteries Commission as the instigator of the process. Dissatisfied with the level of
prominence the Commission was receiving through its association with SASCOC, he
proposed that he would identify and present an eligible entity which the Commission
could fund through SASCOC.
[44] Upon the Chairperson of the National Lotteries Commission submitting the
name of the Foundation as the organisation earmarked to receive the grant funding,
SASCOC was instructed to prepare an application in the amount of R34 830 000.00 on
behalf of the Foundation, with SASCOC acting solely as a conduit. The Foundation
thereafter complied by submitting all the required documentation to SASCOC.
SASCOC, in turn compiled the documents in a form of an application and presented
them to the National Lotteries Commission.
them to the National Lotteries Commission.
[45] It was SASCOC that made the presentation to the National Lotteries
Commission, in which it sought the funding. Through the funds so obtained, SASCOC
20
was, via the Foundation, to promote and raise awareness of SASCOC’s activities. This
included the implementation of an awareness campaign in support of Team South
Africa at the 2016 Olympic Games, scheduled to take place in August 2016. When
Professor Nevhutanda presented the name of the Foundation to SASCOC, he
reassured SASCOC that the Foundation had the capacity to implement and manage
the campaign.
[46] Given SASCOC’s financial dependency on the National Lotteries Commission,
its reluctance to contradict a decision taken by the Commission is understandable. To
do so may have risked the loss of future funding from the Commission. SASCOC’s
acquiescence in the proposed organisation, namely the Foundation, must be
understood against that backdrop. In addition, SASCOC was disinclined to disappoint
the Chairperson of the National Lotteries Commission, Professor Nevhutanda, who
ostensibly exercised significant influence over the Commission’s funding decisions.
Internal investigations conducted by SASCOC suggest that these considerations
informed its acceptance of the Foundation as the entity deemed suitable to receive
funding to implement the awareness campaign in support of the 2016 Olympic
Games.
[47] In terms of Regulation 3, conduit funding is expressly recognised as a
legitimate funding mechanism. It is intended to facilitate access to funding by smaller
or informal organisations that would otherwise not qualify. Against this backdrop, the
contentions advanced by the Shandukani Respondents, denying any involvement in
fraudulent activities or any collaboration with the National Lotteries Commission,
cannot be sustained and fall to be rejected. It could scarcely have been coincidental
that Professor Nevhutanda advised SASCOC that he would identify an appropriate
organisation capable of ensuring that the Commission received the prominence it had
hitherto lacked. It is, moreover, reasonable to infer that, in settling upon the
hitherto lacked. It is, moreover, reasonable to infer that, in settling upon the
Foundation, Professor Nevhutanda would have conveyed and aligned the objectives of
the Commission with that selection.
21
[48] The Shandukani Respondents’ persistent denial of any involvement in
fraudulent activities or collaboration with the National Lotteries Commission is
difficult to reconcile with the Independent Implementing Agent Agreement to which
both SASCOC and the Shandukani Respondents expressly refer in their respective
affidavits. While mere awareness of the National Lotteries Commission’s involvement
in the R io de Janeiro Road Show Campaign may not, in itself, establish that the
Foundation knew that the funding originated from the Commission, a critical question
nonetheless arises: why was the Commission explicitly referenced in an agreement
that purportedly bore no relation to it?
[49] The Independent Implementing Agent Agreement is unequivocal in stating that
SASCOC concluded the agreement on behalf of the National Lotteries Commission.
This explicit acknowledgement materially undermines the Shandukani Respondents’
protestations of ignorance and renders their denials implausible. If anything, the
evidence serves to confirm that their involvement in the siphoning of funds from the
National Lotteries Commission was both substantial and profound, and the Tribunal
sees no basis to depart from that conclusion.
[50] While dealing with the I ndependent Implementing Agent Agreement, it is
convenient to dispose of the alleged disputes of fact raised by the Shandukani
Respondents. It is neither necessary nor desirable to traverse this issue exhaustively.
The agreement is unequivocal in establishing that SASCOC did not conclude it on its
own behalf. As already indicated above, the terms of the agreement evince no
ambiguity in this regard. Against this backdrop, the purported disputes of fact are
illusory. There is no genuine or bona fide dispute capable of determination by way of
oral evidence. Accordingly, a referral to oral hearing would serve no purpose and
would be entirely gratuitous. The evidence conclusively demonstrates that the
would be entirely gratuitous. The evidence conclusively demonstrates that the
Foundation concluded the agent agreement with SASCOC, and it is of no
consequence that the agreement does not expressly employ the rubric of agency.
22
[51] The Shandukani Respondents’ further contention, that there exist disputes of
fact on the issue of the Foundation being party to the alleged fraud , is without merit
and is accordingly rejected. Such assertions do not find favour in this Tribunal, in light
of the I ndependent Implementing Agent Agreement, which SASCOC clearly
concluded in its capacity as a conduit or agent. The conclusion of this agreement
constitutes a crucial link in the chain of events that led to the National Lotteries
Commission releasing payment in the amount of R24,980,000.00 to SASCOC. It is
evident that a portion of these funds was ultimately intended for, and reached, the
Foundation.
[52] The payment of R24 980 000.00 by the National Lotteries Commission to
SASCOC, together with SASCOC’s retention of R150 000.00 from that amount prior
to paying the balance to the Foundation, corroborates Maharaj’s allegations that
Shandukani and the Eighth Respondent (‘Ms Shandukani’) instructed him to transfer
the funds to the Foundation. Maharaj further alleges that the Chief Executive Officer
of SASCOC, acting in consultation with its President, instructed him to give effect to
the payment in accordance with those instructions. This constitutes further evidence
pointing to the deep involvement of Ms Shandukani, Shandukani, and the Sixteenth
Respondent (‘Shandukani Holdings’) in the scheme to siphon funds from the National
Lotteries Commission.
[53] SASCOC confirms that no due diligence was undertaken by SASCOC in
respect of the Foundation. This omission is sought to be justified on the basis that
SASCOC is wholly dependent on the National Lotteries Commission for funding and
therefore did not consider it necessary to question the suitability of an organisation
identified by the Commission through its Chairperson. SASCOC further states that it
understood that the documentation submitted in support of the funding application
would be scrutinised by the relevant committee within the National Lotteries
would be scrutinised by the relevant committee within the National Lotteries
Commission, which would apply the prescribed criteria in making its selection. It
submits that there was accordingly no reason for SASCOC or any of its employees to
suspect that the Commission was involved in an unlawful or fraudulent transaction or
23
that the awareness programmes funded by the grant would not be implemented.
SASCOC further confirms that it did not receive any report from the Commission’s
Monitoring and Evaluation Department regarding its oversight of the project that was
the subject of the grant funding. All this amounts to SASCOC’s dereliction of its
duties under the grant agreement.
[54] I agree with the SIU that SASCOC cannot be permitted to benefit from an
unlawful and fraudulent process. SASCOC is accordingly obliged to reimburse the
amount of R150 000.00 retained by it from the overall grant. The evidence
demonstrates that SASCOC acted dishonestly and was complicit in the scheme to
siphon funds from the National Lotteries Commission. In these circumstances, it is not
open to a dishonest party to seek relief from a declaration of unlawfulness on the basis
that it would suffer prejudice. As was held in Esorfranki
2 at paragraph 25,
considerations of prejudice cannot avail a party whose hands are tainted by illegality. 3
To the extent that SASCOC contends that it is entitled to recover any expenses, it
must make out a positive case for such relief by way of an appropriate application to
Court.
[55] Maharaj’s contention that he was not a party to the irregular payment of the
grant to the Foundation is untenable. As Chief Financial Officer of SASCOC, he bore
fiduciary responsibilities that encompassed honesty, good faith, and the exercise of
2 Esorfranki Pipelines (Pty) Ltd and Another v Mopani District Municipality and Others (40/13) [2014] ZASCA 21; [2014] 2 All SA 493 (SCA) (28 March 2014) at para 25
in which Court stated:
“[25] Further, the invalidity of the tender process was not the result of negligence or incompetence on the part of anyone. That the setting aside of the
contract might have been disruptive to the finalisation of the construction of the pipeline must be assessed against the fact that the tender process, and
consequently the contract itself, was tainted by dishonesty and fraud. Accordingly, problems which might potentially arise, as foreseen by the high court, in the
contractual relationship between the municipality and the joint venture by reason of an order setting the contract aside ‘may not be of any consequence in the
case of corruption or fraud, or where the successful tenderer was complicit in the irregularity’. The joint venture dishonestly obtained the award and the
contract. It is therefore hardly open to it to complain that it may suffer prejudice by an order setting the award aside and declaring the contract void. Fraud is
conduct which vitiates every transaction known to the law.
‘No court in this land will allow a person to keep an advantage which he has obtained by fraud. No judgment of a court, no order of a
Minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it
is distinctly pleaded and proved; but once it is proved it vitiates judgments, contracts and all transactions whatsoever; . . . .’”
3
24
due care in relation to all payments authorised or effected by him. In these
circumstances, Maharaj cannot avoid the consequences of the impugned transaction,
nor can he escape the relief sought by the SIU against him and the remaining
Respondents.
[56] The version presented by Murandana and Khumeli, whose identities were
misappropriated to apply for the grant without their knowledge or consent, the grant
application was founded on material misrepresentations. This is reinforced by the
averments of the Shandukani Respondents, who confirm that SASCOC’s application
falsely represented that it was submitted on behalf of the Foundation. The Foundation
and SASCOC , therefore, deliberately used the names of Muratanda and Khumeli
without their knowledge to secure funding. Such conduct was fraudulent and cannot
be disassociated from the financial prejudice of R24 980 000.00 suffered by the
National Lotteries Commission. The grant application was premised on false
representations and formed part of a concerted scheme to unlawfully benefit the
perpetrators.
[57] Clause 14.1.2 of the agreement confers upon the National Lotteries
Commission the right to cancel the impugned agreement and to recover any amounts
paid to SASCOC pursuant to the grant, as well as any property or assets acquired with
grant funds, in circumstances where the information furnished in the funding
application is false or misleading. In the result, I am satisfied that the SIU has
sufficiently demonstrated that the information supplied was false and misleading .
Consequently, on this ground, the decision should be reviewed, set aside and declared
null and void ab initio.
The Distributing Agency Failed to Discharge its Duty Contemplated in Section
22(3) of The Lotteries Act
[58] When considering, evaluating, and adjudicating an application, the Distributing
Agency is required to take into account several statutory factors. Failure to observe
Agency is required to take into account several statutory factors. Failure to observe
these factors may have serious consequences. Thus, in terms of the Lotteries Act, the
25
Distributing Agency is obliged to consult with the Minister of Sport, Arts and Culture
or the Minister of Finance during the consideration of an application. In the present
matter, there is no record or evidence that such a consultation took place. This
omission is fatal. It follows then that the Distributing Agency failed to comply with a
mandatory statutory requirement and, as a result, acted beyond the scope of its
powers.
[59] Regulation 3 of Chapter II of the Directions provides that, upon receipt of an
application for adjudication, a Distributing Agency must determine whether the
application meets the prescribed criteria and whether the applicant has submitted all
mandatory documents as stipulated in the application form. In this matter, the
mandatory documents were not attached to the application, most notably the entity's
financial statements , which are essential for assessing the financial viability of a
non-profit organisation. It is therefore unsurprising that the failure to submit the
Foundation’s financial statements led directly to a lapse in diligence and the failure to
detect the fraud.
[60] In the absence of the mandatory financial statements, the Distributing Agency
was unable to properly assess the financial viability, governance structures, and
operational sustainability of the Foundation. The approval of the application under
these circumstances was accordingly irrational, procedurally unfair, and inconsistent
with the regulatory framework governing the adjudication process. In terms of
Regulation 3 of Chapter II, where an application does not meet the prescribed criteria
or is not supported by all the mandatory documents, as is the case here, the application
ought to be declined on the basis that it is non-compliant and incomplete.
[61] In approving the grant application, the committee members failed to properly
apply their minds and acted negligently to the prejudice of the National Lotteries
apply their minds and acted negligently to the prejudice of the National Lotteries
Commission. The application was materially defective and internally inconsistent.
Although submitted in the name of the NPO, the mandatory supporting documentation
pertained almost entirely to SASCOC, save for the Foundation’s constitution and
26
business plan. These inconsistencies indicate that the decision -maker failed to assess
whether the application complied with the Lotteries Act's purpose and beneficiary
requirements, rendering the decision procedurally unfair and substantively irrational.
[62] Furthermore, the Distributing Agency failed to adhere to basic standards of
procedural diligence. It did not undertake appropriate verification of the information
provided, failed to conduct a site visit, and did not call for outstanding mandatory
documentation prior to approving the grant. These omissions amount to a failure to
consider relevant considerations and vitiate the lawfulness of the administrative
action. The Foundation failed to comply with the mandatory requirement to submit
audited Annual Financial Statements (AFS) for two consecutive financial years, duly
signed and dated by a registered Auditor.
[63] It is uncontested that the Foundation was incorporated in February 2016 and
that the grant application was lodged on 7 July 2016. As a consequence, the
Foundation was incapable of providing financial statements for two consecutive years,
having not existed for that duration. Despite this material non -compliance, the
Distributing Agency proceeded to award the grant, acting on the request or
recommendation of SASCOC, without enforcing the prescribed eligibility and
compliance criteria. In these circumstances, Regulation 3 of Part II of the Directives
mandated the refusal of the application. The Distributing Agency ’s failure to do so
renders its decision unlawful and susceptible to a declaration of invalidity.
The Information Furnished in the Progress Report is False or Misleading
[64] The SIU argues that the information contained in the report is false or
misleading insofar as it states that the total value of the grant, as per the agreement, is
R25 000 000.00; that the total amount received during the reporting period is
R25 000 000.00; and that the total amount spent during the same period is
R25 000 000.00; and that the total amount spent during the same period is
R25 000 000.00. However, it is common cause that this information is misleading, as
the amount actually paid to the First Respondent was R24 980 000.00 and not the
amounts reflected in the report.
27
[65] The report further records that the reporting periods were 15 July 2016 to 30
July 2016, and 18 July 2016 to 30 September 2016, respectively. It is uncontested that
this is misleading, as payment of the grant to SASCOC was only effected on 20 July
2016. It follows that the report could not legitimately encompass a period preceding
both the payment of the grant and the conclusion of the agreement. In paragraph 4 of
his opposing affidavit, Maharaj alleges that he received an email from Shandukani on
25 August 2016, enclosing a final report and requesting that he sign it prior to its
submission to the National Lotteries Commission.
[66] Contrary to this allegation, Annexures “VM2” and “VM3” do not support
Maharaj’s averments. In particular, annexure “VM2” is an email dated 19 September
2016, which attaches annexure “VM3”. Annexure “VM3” is expressly an interim
report and not a final report as alleged by Maharaj. The crux of the matter is that the
final report submitted by Maharaj to the National Lotteries Commission was devoid of
any corroborating documentary evidence and was materially misleading. In
consequence of this material misrepresentation, the Distributing Agency ought to have
rejected the report. The failure to reject the report constituted a dereliction of the
Commission’s obligations under the governing framework.
[67] Over and above the fact that the contents of the report are misleading, its true
significance lies in the manner in which it contradicts the Foundation’s purported lack
of knowledge regarding the National Lotteries Commission’s involvement. The
pertinent question arises: why would Shandukani instruct Maharaj to sign the report
prior to its submission to the Commission if, as alleged, the Foundation had no
involvement in the process? This conduct is irreconcilable with any claim of
ignorance and points instead to conscious participation. In light of the foregoing, the
decisions to award the grant and to conclude the underlying agreement fall to be
decisions to award the grant and to conclude the underlying agreement fall to be
reviewed and set aside.
The Grant was not used for its Intended Purpose
28
[68] Clause 2.2.3 of the grant agreement stipulates that the grant funds were to be
utilised strictly in accordance with the items listed in Annexure “A” thereto, and for
no other purpose. The SIU contends that the Shandukani Respondents, together with
all the other respondents, with the exception of Khumeli and Murandana, failed to
apply the grant in the manner envisaged by the agreement. The Shandukani
Respondents, on the other hand, barefacedly assert that the funds were duly expended
for their intended purpose and that, consequently, no breach of the agreement
occurred. This stance is maintained notwithstanding the fact that an amount of
R15 350 000.00 from the grant was paid to the Twelfth Respondent, Ironbridge
Travelling Agency.
[69] The aforesaid amount was utilised for, inter alia , the purchase of motor
vehicles and goats; payments to panel beaters, network installations, décor for an
unveiling event and payments to Letwaba and/or entities and trusts under his control,
as well as to his family members and friends and/or their entities or trusts. None of
these expenditures fall within the activities or items listed in Annexure “A” of the
grant agreement, nor were they the purpose for which the grant was intended to be
applied.
[70] The National Lotteries Commission received no value in return for the payment
of the grant, as the funds were misappropriated by all the Respondents, with the
exception of Khumeli, Murandana, Eleventh Respondent (“Imbizo Events”), and
Dlamini, which has settled the claim against it with the SIU. The implicated
Respondents utilised the funds for their own benefit, as well as for the benefit of
entities under their control and individuals associated with them or with those entities.
At the relevant time, the funds received by these companies were under the control of
their respective directors and trustees, as the case may be. These directors and trustees,
who have been cited as Respondents in this application, authorised and caused
who have been cited as Respondents in this application, authorised and caused
payments to be made from the bank accounts of the entities in question.
29
[71] SASCOC expressly conceded that it utilised the amount of R150,000.00, which
it had retained as an administrative fee in terms of the agreement, for operational costs
incurred in the ordinary course of its business. This constitutes a clear and
unequivocal admission that the funds were applied for a purpose other than that
contemplated by the parties in the agreement. Such use is inconsistent with the agreed
terms and amounts to a breach thereof. In the circumstances, the award of the grant to
SASCOC, together with the underlying agreement, falls to be reviewed and set aside
on the basis that the funds were utilised in a manner contrary to the provisions of the
agreement.
[72] SASCOC’s contention that it would be unjust and inequitable for this Tribunal
to direct it to reimburse the amount of R150,000.00 to the National Lotteries
Commission is without merit and must be rejected. It is immaterial that the unlawful
conduct was carried out by its employees and officers in collusion with officials of the
Commission. What is decisive is that SASCOC itself—and not the individuals
involved— derived the benefit from the impugned transaction.
[73] This argument overlooks the fundamental principle that employees and officers
were acting within the course and scope of their official duties, and there is no
evidence to suggest that they personally profited from the conduct in question. In
these circumstances, the acts of those individuals are attributable to SASCOC. Where
SASCOC was implicated in fraudulent activity, it cannot, as a matter of law and
equity, be permitted to retain the proceeds thereof. To allow it to do so would be to
sanction the very wrongdoing that this Tribunal is enjoined to remedy.
[74] The Shandukani Respondents have challenged the authority of the deponent to
the founding affidavit. This challenge is premised on an obvious drafting error, in that
the deponent inadvertently referred to Section 5A(4) of the SIU Act instead of Section
the deponent inadvertently referred to Section 5A(4) of the SIU Act instead of Section
5AA (1). The error is purely technical in nature and does not give rise to any
prejudice. There is no contention to the contrary, nor does such error detract from the
deponent’s authority to depose to the affidavit, which is in any event properly
30
grounded in the applicable statutory provision. A similar situation confronted the court
in Trans-African Insurance Co Ltd v Maluleka and it had this to say:
“Technical objections to less than perfect procedural steps should not be
permitted, in the absence of prejudice, to interfere with the expeditious and, if
possible, inexpensive decision of cases on their real merits.”4
[75] To the extent that the Shandukani Respondents contend that the Fund
constitutes a separate juristic entity, a such contention is misplaced. Although the
Fund owes its existence to Section 21(1) of the Lotteries Act and is administered by
the Board, this does not confer upon it independent legal personality. The Fund
remains a division of the National Lotteries Commission and is neither separate from
nor independent of it. Accordingly, the actions and decisions of the Fund are properly
attributable to the National Lotteries Commission. Thus, where decisions taken by the
Fund are inconsistent with the principle of legality, the SIU is empowered to approach
this Tribunal in terms of that principle for appropriate relief. Such relief may include
an order reviewing and setting aside the decision to award the grant, the grant
agreement itself, the payment of the grant to SASCOC, as well as any expenditure
incurred pursuant thereto.
Declaration of Invalidity
[76] A proper consideration of the above reveals that the provisions of the Lotteries
Act, together with the Regulations and Directives promulgated thereunder, were not
merely undermined but were in fact contravened. Likewise, the agreements governing
the grant were disregarded and breached. The process preceding the award of the grant
was tainted by illegality. It was founded upon material misrepresentations of fact.
Notably, it was not disputed that the identity documents of Murandana and Khumeli
were utilised without their consent and were improperly employed in support of the
application for the grant.
application for the grant.
4 Trans-African Insurance Co Ltd v Maluleka 1956 (2) SA 273 (A) at 278F-G.
31
[77] The grant was not used for the purpose for which it was awarded. A further
analysis of all the evidence demonstrates that each of the Respondents, excluding
Marandana and Khumeli, was complicit in a scheme to siphon funds from the
National Lotteries Commission. SASCOC was employed as a vehicle through which
the grant application was made, ostensibly for legitimate purposes, but in reality, for
the benefit of the respondents, certain employees of the National Lotteries
Commission, and entities associated with them.
[78] Additionally, the funds received by SASCOC from the National Lotteries
Commission were not utilised in accordance with clause 2.2.3 of the grant agreement.
Moreover, in approving the application and authorising the disbursement of the funds,
the Distributing Agency failed to consult with the Minister, as required by the
Lotteries Act. In the circumstances, the decisions are vulnerable to review under the
principle of legality, as entrenched in Section 1(c) of the Constitution, pursuant to
which this review is brought. Accordingly, the decisions are declared constitutionally
invalid and are reviewed and set aside in terms of Section 172(1)(a) of the
Constitution.
Just And Equitable Remedy
[79] In Special Investigating Unit and Another v Vision View Production CC
5 the
Court held that a Court (or tribunal) exercising its powers under Section 172(1)(b) of
the Constitution has a wide remedial discretion to fashion a remedy that is just and
equitable in the circumstances. This includes the power to regulate the consequences
of a declaration of invalidity, and in appropriate circumstances to decline to order full
restitution, instead crafting a remedy that is fair, having regard to factors such as the
extent of performance, the parties’ conduct, considerations of public interest, and the
need to avoid unjust enrichment or undue hardship.
need to avoid unjust enrichment or undue hardship.
5 In Special Investigating Unit and Another v Vision View Production CC (2019/20801) 2020 ZAGP JHC 421 at para 60, quoting with approval, Allpay Consolidated
Investment Holdings (Pty) Ltd and Others v Chief Executive Officer of the South African Social Security Agency and Others (No 2) [2014] ZACC 12 (17 April 2014);
2014 (4) SA 179 (CC) at para 38.
32
[80] The wide discretion in crafting a just and equitable remedy requires a careful
balancing of legality, fairness, and the practical consequences of setting aside the
impugned transactions, and that full restitution is not an inflexible rule but one of
several remedial options available depending on the circumstances. The evidence in
this matter reveals an elaborate scheme to siphon funds from the National Lotteries
Commission for personal gain. With the exception of Murandana and Khumeli, all the
parties before this Tribunal were complicit in, and derived benefit from, the impugned
scheme. While Imbizo Events and Dlamini were initially part of the unlawful
arrangement, they have since concluded settlement agreement s with the SIU in terms
of which they have undertaken to reimburse portion s of the funds received from the
Foundation. The SIU has accepted those settlement agreements.
[81] In these circumstances, it would not be just and equitable to approach the
question of remedy on the basis of uniform restitution across all parties. The differing
degrees of participation, benefit, and subsequent conduct, including the willingness of
certain parties to make restitution, must inform the remedial outcome. A nuanced
remedy is therefore required, one that ensures accountability for those who
participated in the scheme, avoids unjust enrichment, recognises bona fide
settlements, and protects parties who were not implicated in the wrongdoing.
[82] I have had the benefit of the arguments presented on behalf of the National
Lotteries Commission, SASCOC, and the Shandukani Respondents. The SIU seeks no
relief against Khumeli and Murandana. Insofar as Imbizo Events and Dlanini are
concerned, the SIU has advised that it has accepted settlement offers in full and final
settlement of their liabilities.
[83] The remaining Respondents did not oppose the application, notwithstanding
that the relief sought is against them jointly and severally and that they stand to be
that the relief sought is against them jointly and severally and that they stand to be
directly affected by any order granted by this Tribunal. In the absence of any
opposition and having regard to the nature of the relief sought, I am satisfied that
those Respondents were fully aware of the proceedings and the implications thereof
33
and have elected not to place any facts or contentions before th is Tribunal in their
defence. It is therefore reasonable to infer that they have resigned themselves to the
consequences that may flow from an adverse order.
[84] The essence of SASCOC’s position in this matter is that it was Professor
Nevhutanda who set in motion the sequence of events that ultimately culminated in
these review proceedings. According to SASCOC, it was placed in an unenviable
position in that it could not readily reject a proposal advanced by Professor
Nevhutanda, who at the time was the Chairperson of the National Lotteries
Commission and whose office was pivotal to SASCOC’s access to funding.
[85] SASCOC contends that any refusal to accede to the proposal carried with it the
real risk of jeopardising its prospects of securing future financial support from the
National Lotteries Commission. Against that backdrop, SASCOC agreed to lend its
support to a process intended to enhance the profile of the National Lotteries
Commission through the Foundation, an entity identified and effectively handpicked
by Professor Nevhutanda. Notwithstanding its involvement in the process, there is no
evidence that SASCOC derived any substantive benefit from the impugned grant, save
for the sum of R150 000.00 retained in respect of administrative functions associated
with the project.
[86] All things considered, there is evidence that Mr Maharaj, the Chief Financial
Officer of SASCOC, was aware that the process was potentially tainted by illegality.
Notwithstanding this knowledge, he yielded to the direction of the Chief Executive
Officer and the President of SASCOC, thereby disregarding his fiduciary duties and
implicating SASCOC in the impugned conduct.
[87] In these circumstances, SASCOC cannot be heard to contend that it is entitled
to retain the sum of R150 000.00, which was obtained through an unlawful process.
To permit SASCOC to do so would be to sanction unlawful enrichment and
34
undermine the principle of legality. Accordingly, SASCOC is obliged to repay the
amount of R150 000.00 to the National Lotteries Commission.
[88] Turning to Maharaj in his personal capacity, there is no evidence that he
directly benefited from the approval of the grant or the consequent disbursement of
funds. However, his failure to discharge his fiduciary duties, particularly in
circumstances where he was aware of potential illegality, materially contributed to the
unlawful approval and payment of the grant. His conduct was not merely passive; it
facilitated the impugned transaction and enabled SASCOC’s participation in the
scheme. In these circumstances, he cannot evade accountability. The fact that he did
not personally benefit does not absolve him of liability where his breach of duty was
causally linked to the loss suffered. Accordingly, Maharaj is jointly and severally
liable with SASCOC for the repayment of the amount of R150 000.00 to the National
Lotteries Commission.
[89] I have already dismissed the contentions advanced on behalf of the Shandukani
Respondents. The evidence demonstrates that they were centrally and actively
involved in the siphoning of funds from the National Lotteries Commission. Their
participation was neither peripheral nor inadvertent but formed part of the core
machinery through which the unlawful scheme was executed. It is, moreover,
disconcerting that, despite the existence of documentary evidence, including the
Independent Implementing Agent Agreement, the Foundation persists in asserting
ignorance of the illegality that permeated the process. Such a stance is untenable when
viewed against the totality of the evidence. Equally troubling is the absence of any
cogent or lawful explanation for the Foundation's disbursement of funds to various
parties, some of whom subsequently made payments to employees of the National
Lotteries Commission. Such conduct is plainly impermissible and in direct
contravention of the provisions of the Lotteries Act.
contravention of the provisions of the Lotteries Act.
[90] Lastly, in respect of the remaining respondents, with the exception of
Murandana, Khumeli, Dlamini and Imbizo Events, their failure to participate in these
35
proceedings, whether through legal representation or in person, as was the case with
Maharaj, warrants the inference that they have elected to abide by the consequences of
any order that this Tribunal may make against them. In the absence of any contrary
evidence or explanation, there is no basis to insulate them from liability. All things
considered, and having regard to the overall context of this matter, I am satisfied that
the order set out below is just and equitable in the circumstances.
Order
[91] In the premises, I make the following order.
(1) The decision of the National Lotteries Commission of 13 July 2016 to award
funding to SASCOC in the amount of R24 980 000.00 is reviewed and set
aside;
(2) The grant agreement concluded between the N ational Lotteries Commission
and SASCOC, dated 13 July 2016 is declared invalid and unlawful ab initio;
(3) The payment of the amount of R24 980 000. 00 made to SASCOC by the
National Lotteries Commission pursuant to the grant agreement is declared
invalid, unlawful and is reviewed and set aside;
(4) All the R espondents, with the exception of Murandana, Khumeli , Dlamini,
Imbizo Events, SASCOC and Maharaj are directed to repay, jointly and
severally, to the SIU, an amount of R24 830 000.00 unduly paid to them, the
one paying the others to be absolved;
(5) SASCOC and Maharaj are directed , jointly and severally, the one paying the
other to be absolved, to repay the amount of R150 000.00 to the SIU; and
(6) SASCOC, Maharaj and the Shandukani Respondents are liable for the costs
occasioned by this application. Such costs are to include those of two counsel.
36
________________________________
JUDGE BA MASHILE
MEMBER OF THE SPECIAL TRIBUNAL
Appearances:
For the Applicant: Adv E Baloyi-Mere SC
Adv N January
Instructed by: Linda Mazibuko & Associates
For the Respondents: Adv M Mokoti
Instructed by: Maenetja Attorneys
For the 2
nd Respondents: Adv Cassim SC
Adv O Ben-Zeev
Instructed by: Dev Maharaj & Associates Inc
For the 3
rd Respondents: Vinesh Maharaj
Instructed by: In Person
For the 4
th, 7th, 8th, 9th and 16th Respondents: Q Pelser SC
Instructed by: Nevathani Attorneys
For the 11th Respondents: No Appearance
Instructed by:
For the 15
th Respondents: Legodi Attorneys
Instructed by: No appearance
37
For the 5th, 6th, 10th, 12th, 13th, 14th and 17th Respondents: Not opposing the
application
Date of judgment:
Mode of delivery
This judgment is handed down by email transmission to the parties’ legal
representatives, uploaded to Caselines and released to SAFLII and AFRICANLII. The
date of delivery is deemed to be 27 May 2026 at 10h00.