The Special Investigating Unit has obtained a court order freezing assets worth millions belonging to a company director after an investigation into the unlawful receipt of Covid-19 relief funds.

The Special Tribunal granted the order against Nhlakanipho Mngomezulu, director of Lubelo Hlomuka Holdings trading as SA Scrum Assembly, which allegedly received approximately R16,4 million from the Unemployment Insurance Fund through fraudulent means.

The funds were intended to support workers affected by the Covid-19 lockdown through the Temporary Employer/Employee Relief Scheme but were instead diverted through what investigators described as a sophisticated fraud involving ghost employees.

Between 2020 and 2022, shortly after receiving the TERS payments, Mngomezulu allegedly used the money to purchase several vehicles in cash, including a Volkswagen VN 750 Caravelle, Kia K2700, Toyota Avanza and Ford Ranger.

The preservation order also covers properties allegedly bought with the misappropriated funds, including two properties in Glyndale, KwaZulu-Natal, four apartments in Pietermaritzburg and one property in Zeekoe Vallei, eThekwini.

Bank accounts linked to Mngomezulu and SA Scrum Assembly have been frozen under the order.

The SIU said analysis of bank records showed SA Scrum Assembly received 45 payments from the UIF with no evidence that employee salaries were paid. Instead, funds were channelled through other accounts in what appeared to be a money-laundering scheme.

Mngomezulu personally received more than R5 million in multiple payments from the TERS funds, investigators found.

Judge Margaret Victor, president of the Special Tribunal, granted the interim order in November 2025, preventing Mngomezulu from selling, disposing of, transferring, leasing or otherwise dealing with the assets until the matter is finalised.

President Cyril Ramaphosa authorised the SIU investigation under Proclamation R.8 of 2021 to examine allegations relating to UIF affairs, including TERS payments made to ineligible recipients and false applications.

The SIU said it remains committed to recovering public funds intended for workers during the pandemic and holding accountable those who unlawfully benefited.

Under the Special Investigating Units and Special Tribunals Act, any evidence of criminal conduct uncovered during the investigation will be referred to the National Prosecuting Authority.