Corruption probe | Former lotteries boss fails in bid to access R2.8 million pension fund

Former Chief Operating Officer of the National Lotteries Commission (NLC) Philemon Letwaba’s legal bid to have his R2.8 million pension benefit released after it was preserved by the Special Investigating Unit (SIU) in 2022, following allegations that he dipped his fingers into National Lotteries money, has failed.

The Special Tribunal last week rejected his arguments that the Tribunal does not have the authority under the Pension Fund Act to eventually allow pension deductions if wrongdoing was ever established on Letwaba’s part.

According to Letwaba’s argument, only a court, and not the Tribunal, has the power to order the pension deduction, if it ever came to that. Thus, his counsel told the Tribunal that the funds must be released to him.

The Special Tribunal in 2022 interdicted the Liberty Group - the pension administrator - from paying out any proceeds of Letwaba’s pension funds - about R2.8 million - invested with it.

The SIU approached the Special Tribunal on an urgent basis to freeze the pension benefits of Letwaba after he resigned from the NLC pending the institution of a disciplinary hearing into his role in the distribution of NLC funds to several Non-Profit Organisations (NPOs).

An investigation by the SIU into the affairs of the NLC had revealed that Letwaba allegedly benefited personally from monies received by NPOs from the NLC. The SIU investigation had revealed that he allegedly used friends and family businesses, and Trusts to receive money from NPOs for his benefit and that of his family.

The SIU told the Tribunal that it was mandated to investigate maladministration at the National Lotteries Commission (NLC). It said the investigation indicated that Letwaba, as former Chief Operating Officer, abused his position to facilitate the diversion of millions of rand earmarked for community upliftment projects into companies owned or controlled by his wife, brother-in-law, and close associates.

It is the SIU’s case that these irregularities were not only administrative but also dishonest and carefully planned, and that they resulted in the NLC donating funds to his proxies rather than to the vulnerable communities to whom the grants were earmarked. The amount involved is said to run into millions of rand. The NLC is an organ of the State, and the purpose of the SIU is really to root out corruption, which is currently at a pandemic level in South Africa, it said.

The SIU pointed out that it was established in terms of the Special Investigating Units and Special Tribunals Act. It was mandated by the President to conduct investigations into maladministration relating to the affairs of the NLC.

It further told the Tribunal that the SIU has wide powers in terms of the SIU Act to institute the proceedings and seek relief after being authorised in law to investigate irregularities and corruption, and serious maladministration relating to the administration and affairs of any state institution. This, it said, includes the NLC, and any conduct with the potential to seriously harm the interests of the NLC, including the public at large.

It argued that Letwaba’s pension fund is subject to deduction because if the review of the grants made to certain NPOs is found to be unlawful and if Letwaba played a role in that, he would have to repay the money back. If he was unable to do so, it had to be deducted from his pension, the SIU said.

The Tribunal examined whether the statutory definition of “court” in the Pension Fund Act excluded the Special Tribunal from ordering deductions.

President of the Special Tribunal, Judge Margie Victor, found that a harmonious reading of the SIU Act and the Pension Funds Act supported the continuation of the preservation order. She said given the seriousness of the allegations and the public interest in safeguarding the funds, Letwaba’s application had to fail.

“The issue is complex and fundamental to protecting the rights of the vulnerable when proceeds intended for their care are misdirected, as alleged in this case,” the judge said.

zelda.venter@inl.co.za