The Special Investigating Unit has hailed a ruling by the Special Tribunal that declared a R14 million National Lotteries Commission grant to the Madumelani Community Project unlawful.
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The Special Investigating Unit (SIU) has welcomed a ruling by the Special Tribunal declaring a R14 million grant awarded by the National Lotteries Commission (NLC) to the Madumelani Community Project unlawful and invalid, and ordering that the funds be repaid.
The grant had been earmarked for the construction of a cultural village in Hammanskraal, Gauteng. However, investigations revealed that the project had already been established in 2015 by Maubane Cultural Village and Community Arts and Centre using a separate NLC grant of R300,000.
In her judgment, Special Tribunal President Margaret Victor found that the scheme orchestrated by brothers Tshimangadzo Mukutu and Ndoweni Mukutu was “clearly fraudulent”.
Victor ruled that the Mukutu brothers, along with Netswinganani, Mukondeleli, Mudonde Events and Investment, RUM Management Consultancy, Ndhava Management and Thwala Front, “acted together with the intent to defraud the NLC” and are jointly liable to repay the R14 million, including legal costs.
She further described corruption in the country as a “catastrophic corruption epidemic”.
“In this case, the facts are such that the conduct of the antagonists is unconscionable, which justifies the piercing of the corporate veil. Money earmarked for a cultural village, a pride and joy of any community, has been lost to a fraudulent scheme,” Victor said.
The SIU investigation found that the Madumelani Community Project, a non-profit organisation, did not apply for the funding and was unaware of the application. Instead, Tshimangadzo Mukutu allegedly submitted the application fraudulently, falsely presenting himself as a director.
According to the SIU, the scheme involved “extensive planning and deliberate misrepresentation”, including the unlawful use of the organisation’s constitution, the appointment of fictitious office-bearers, forged signatures, and the opening of a bank account through which millions were channelled.
Members listed in the application told investigators they had no knowledge of the submission and that their signatures had been forged.
The probe also allegedly found that funds disbursed in February 2018 were transferred to various entities and individuals linked to the accused.
Payments allegedly included over R3 million to RUM Management Consultancy, nearly R5 million to Ndhava Management Consulting, and R1.4 million to Thwala Front.
Other payments including millions of rand allegedly paid to Mudonde Events and Investment, while R3 million was directed to a trust allegedly linked to Advocate William Huma, a former NLC board member.
The SIU noted that the Special Tribunal had previously ordered Huma to repay R21 million in misused grant funds, with a preservation order secured for R10 million from the sale of his luxury residence.
The investigation was conducted under Proclamation 32 of 2020, issued by Cyril Ramaphosa, authorising the SIU to probe allegations of maladministration at the NLC.
The SIU said the tribunal order forms part of efforts to recover financial losses suffered by state institutions due to corruption and maladministration. It added that any evidence of criminal conduct uncovered during its investigations is referred to the National Prosecuting Authority for further action, in line with the Special Investigating Units and Special Tribunals Act.
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