The Special Investigating Unit (SIU) has succeeded in obtaining a Special Tribunal order declaring a R14 million grant awarded for a community cultural village project by the National Lotteries Commission (NLC) fraudulent, invalid and unlawful.
Retired Special Tribunal President Judge Margaret Victor issued a ruling in February, which was released by the Special Investigating Unit (SIU) on Tuesday. The ruling reviewed and set aside the grant awarded to the non-profit organisation Madumelani Community Project, whose contract was signed in February 2018. The grant has been declared void ab initio (from the beginning).
She declared that brothers Tshimangadzo and Ndoweni Mukutu, who is an employee of the Electoral Commission of South Africa, Tshilidzi David Netswinganani, Mudonde Events and Investment, Rum Management Consultancy, Ndhava Management, Tshisimba Collin Mukondoleli and Thwala Front acted in concert and with the intention to defraud the NLC.
The Mukutu brothers were the principal participants in the grant funding and are both directors of Madumelani Community Project, according to the Tribunal.
Judge Victor also declared Mudonde Events and Investment, Rum Management Consultancy, Ndhava Management and Thwala Front are deemed not to be juristic persons in respect of any right, obligation, or liability of these companies to the NLC.
She held the directors personally liable for the repayment of the R14m.
In addition, she said there was a clear case in which the directors of Mudonde and Rum Management Consultancy knew of the fraud and used the companies as tools to perpetuate it; therefore, the directors must be held liable.
“I find that the scheme established by the two brothers, Mukutu, are clearly fraudulent. Ndoweni Mukutu’s lack of knowledge cannot be explained in any plausible or credible manner by him. The raising of R14m is no simple matter. Tshimangadzo Mukutu’s claim that he could not afford legal representation is implausible. He is a project manager responsible for managing millions of rand,” reads the ruling.
Judge Victor stated that Tshimangadzo could have drafted his own affidavit and filed his opposition.
“He could have, of his own accord, sought an interview with the SIU investigator. He could have produced documentation demonstrating the project’s authenticity. Instead, he sought to remain silent and ride on his brother’s coattails, rather than deposing to an affidavit and opposing the relief sought,” the judge added.
According to Judge Victor, a lot of planning and intention went into executing the scheme from obtaining a copy of the constitution of Madumelani, to appointing fake office bearers, to inserting fraudulent signatures to the grant application, opening up a bank account and immediately paying out millions of rand, and as stated, ultimately Ndoweni Mukutu receiving the sum of nearly R7.5m, almost 50% of the grant.
The SIU has indicated that the grant was intended for the construction of a cultural village in Hammanskraal, Tshwane, and the project was already established in 2015 by Maubane Cultural Village and Community Arts and Centre, not by the Madumelani Community Project, following receipt of a R300,000 grant from the NLC.
The SIU’s probe found that between March and July 2018, the Madumelani Community Project made nine transactions with Rum Management Consultancy, owned by Ndoweni Mukutu, totaling just under R3.1m.
Ndhava Management Consulting, owned by Mukondoleli, received a payment of almost R5m in March 2018 and on the same day, Thwala Front, owned by Mukondoleli’s wife, Kharivhe Fulufhelo Promise, was paid R1.4m.
The following month five payments totaling R4.65m were also made, with R3.519m going to Mudonde Events and Investment owned by Ndoweni Mukutu and these included a payment of R3m to a trust associated with Advocate William Huma, a former NLC board member.
The tribunal last year ordered Huma to reimburse R21m in misused grant funds and the SIU obtained a preservation order for R10m from the sale of his luxury residence.
loyiso.sidimba@inl.co.za
