In a landmark victory for fiscal accountability and the fight against systemic corruption, the Special Tribunal has ordered the South African Sports Confederation and Olympic Committee (SASCOC), along with a network of private entities and individuals, to repay nearly R25 million.

The judgement, delivered by Judge B.A. Mashile, on 26 June, exposes a sophisticated scheme where public funds intended for the “Send-Off to Rio Campaign” were instead diverted to purchase luxury assets, livestock and enrich high-ranking officials within the National Lotteries Commission (NLC).

The Special Investigating Unit (SIU) has hailed the ruling as a critical step in “protecting the public interest and assets through prevention measures and systemic investigations” in a media statement.

The roots of the scandal trace back to July 2016, when SASCOC applied for grant funding to the NLC, purportedly acting as a conduit for a non-profit organisation called the Mshandukani Foundation. The application sought R34 million to support preparations for the 2016 Rio de Janeiro Olympic Games.

However, the SIU investigation revealed that the Mshandukani Foundation was a “hijacked” NPO. The identities of two women, a receptionist and a geology intern, were unlawfully appropriated, and their signatures forged to register the foundation just months before the grant application. These women, Mukundu Khumeli and Ndungiselo Reface Murandana, were later found by the Tribunal to be victims of identity theft who were not complicit in the scheme.

Despite the Foundation having no history, no assets, and no affiliation with SASCOC, the NLC approved a reduced grant of R24 million within a staggering six days of the application being lodged.

The flow of money highlights the speed and coordination of the misappropriation:

• 20 July 2016: The NLC paid R24.9 million to SASCOC.
• 21-27 July 2016: SASCOC transferred R24.8 million to the Mshandukani Foundation in three tranches, retaining R150 000 as a “service fee”.
• Immediate Dispersal: Once the funds reached the Foundation, they were quickly siphoned to various entities:
  • R15.4 million to Ironbridge Travel Agency, owned by Karabo Charles Sithole, a relative of former NLC Chief Operations Officer (COO) Philemon Letwaba.
  • R7.2 million to Mshandukani Holdings.
  • R2 million to Ndzhuku Trading CC.

The investigation found that the grant funds were not used for athletes or Olympic roadshows. Instead, the money was used to purchase motor vehicles and goats, payments to panel beaters, network installations and decor. Furthermore, substantial sums were paid directly to or for the benefit of NLC officials, including R450 000 to Philemon Letwaba and R600 000 to T.S. Maselwa, the NLC’s then-Manager of Legal Services.

The Tribunal was scathing regarding the NLC’s Distributing Agency, which failed in its statutory duty to consult with the Minister of Sport before awarding the grant. The agency ignored the fact that the Foundation, incorporated only in February 2016, could not provide the mandatory audited financial statements for two consecutive years.

Judge Mashile noted that this failure to perform due diligence “led directly to a lapse in diligence and the failure to detect the fraud”.

SASCOC attempted to defend its involvement by claiming it was pressured by the former NLC Chairperson, Professor Nevhutanda, who allegedly handpicked the Mshandukani Foundation as the project implementer. SASCOC argued that as an entity dependent on NLC funding, it could not “readily reject” a proposal from the chairperson.

The Tribunal rejected this defence, finding that SASCOC acted dishonestly and was complicit in the scheme to siphon funds. SASCOC’s retention of R150 000 was characterised as unlawful enrichment.

Judge Mashile declared the grant agreement and the subsequent payments null and void ab initio (“from the beginning”).

Directives issued

The Tribunal issued the following directives:

1. SASCOC and several respondents (excluding the identity theft victims and those who settled) are ordered to repay R24,8 million to the SIU, “jointly and severally” (they share the responsibility together).
2. SASCOC and its former CFO, Vinesh Maharaj, are ordered to repay the R150 000 they retained.
3. The SIU has already accepted settlements from Imbizo Events (R70 000) and Minenhle Dlamini (R50 000).

Beyond the repayment orders, the SIU has previously obtained preservation orders to freeze two luxury properties in Centurion and a high-value borehole drilling machine (worth R1.7 million) linked to the perpetrators.

The SIU has confirmed it will refer all evidence of criminal conduct uncovered during this investigation to the National Prosecuting Authority (NPA) for potential prosecution.