Former NLC Executive Dismissed Over Dubious Lottery Grants; Broader Probe Reveals Misuse of Millions.

In a sweeping investigation uncovering corruption at South Africa's National Lotteries Commission (NLC), a former chief operating officer, Sanele Dlamini, has been dismissed for approving two dubious multimillion-rand lottery grants. This move, amid several other disciplinary actions, signals a significant step in an ongoing probe by the Special Investigating Unit (SIU) and the Hawks.

Dlamini, previously the KwaZulu-Natal provincial manager, rose to the acting COO position after Phillemon Letwaba, the former COO, resigned amid disciplinary inquiries. Letwaba had signed off on the same controversial projects under scrutiny by the SIU. Among them is a high-profile Soweto sports center project that received substantial funding from the NLC but remains incomplete, a scandal GroundUp reported extensively.

The NLC's investigation further implicated Sibonelo Vilakazi, a client liaison officer in KwaZulu-Natal. An internal inquiry found that his wife’s business, ZZET Enterprise, benefited significantly from lottery grants awarded to sports clubs and daycare centers. Vilakazi was also found guilty of failing to disclose this conflict of interest.

Both Dlamini and Vilakazi have appealed their dismissals, temporarily suspending the decisions and allowing them to receive full salaries during the appeal process.

Broader Scope of Disciplinary Action

This latest action follows a written statement from Trade, Industry, and Competition Minister Parks Tau, responding to parliamentary questions from DA MP Toby Chance, which revealed that seven other NLC employees are currently undergoing disciplinary proceedings. Six of these employees, including senior figures like the NLC’s company secretary, legal manager, and provincial managers, have been on suspension since late 2022, collectively receiving approximately R8.4 million in salaries during their suspensions.

The high-ranking officials facing disciplinary charges include Nompumelo Nene, the NLC’s company secretary, who has received close to R5 million since her suspension in November 2022. Nene previously sought court intervention to prevent her hearing from proceeding but was ordered to cover punitive legal costs by the Johannesburg High Court after her attempt failed.

Minister Tau assured that the NLC’s current administration, under a newly appointed board and commissioner, has adopted a zero-tolerance stance on corruption, aligning closely with SIU directives. “In cases where officials are implicated in Presidential Proclamation and SIU investigations, they will face prosecution. Criminal cases are initiated in instances of fraud and corruption, with steps underway to recover misappropriated funds,” Tau stated.

Dlamini’s Dodgy Deals: A Closer Look

Dlamini’s dismissal centers on his approval of two projects: Phumelela Educational Training Projects and Motheo Sports and Education Trust. Phumelela received nearly R9.6 million between 2014 and 2018, while Motheo was allocated R9 million, of which only R6 million was disbursed after the NLC halted payments amid concerns. Despite Dlamini's report affirming the project’s progress, a site inspection revealed the property remained vacant, with locals using it as a dumping ground.

The NLC has since filed complaints with the Commercial Crimes Unit against Motheo Sports and Education Trust, aiming to recover the millions already paid.

Responding to GroundUp’s inquiry, Dlamini asserted that no sanctions could be enforced before his appeal concludes, remarking, “I am still an NLC employee and continue to receive all employment benefits.” He declined further comment on questions about the specific projects.

Vilakazi and Alleged Money Laundering Scheme

Vilakazi faces additional charges related to his wife’s business, 05 ZZET Enterprise, which allegedly acted as a conduit for millions intended for community projects. The SIU detailed a complex scheme wherein Vilakazi approached community groups, particularly daycare centers and football clubs, encouraging them to apply for lottery grants. Upon receiving funds, these groups would reportedly transfer substantial sums into ZZET’s account and others linked to his wife, Nosipho Zanele Zuma.

SIU head Advocate Andy Mothibi described the operation as a deliberate misuse of funds designated for improving grassroots facilities across South Africa. “The money was meant to uplift communities but ended up in bank accounts linked to the officials,” Mothibi said.

In a landmark action, the SIU secured a Special Tribunal order last year to freeze the bank accounts of ZZET Enterprise and three other companies linked to Zuma. Despite freezing around R2.4 million, it remains unclear how the remaining R30 million, allegedly siphoned through this scheme, was used.

Efforts to reach Vilakazi for comment were unsuccessful.

Mounting Pressure on NLC Reform

These findings have heightened public calls for transparency and systemic reform at the NLC. The current board has committed to stringent oversight measures, enforcing forensic audits and partnering with law enforcement to hold implicated officials accountable.

Minister Tau highlighted that the SIU’s findings would continue to be referred to the Special Commercial Crimes Unit. "We will ensure all criminal cases are pursued vigorously to protect public funds and restore integrity to the NLC," Tau added.

The commission faces an uphill battle to rebuild trust after years of alleged financial misconduct. The disciplinary actions against Dlamini, Vilakazi, and several other officials may signal a turning point, as the NLC seeks to reaffirm its commitment to ethical governance and accountability.