Johannesburg - Trade and Industry Minister Ebrahim Patel can't explain why he directed the National Lotteries Commission (NLC) to donate R50 million to the Solidarity Fund. Many view the move as a direct conflict of interest, as he sits on the fund's advisory board.
Today, the Sunday Independent reveals that Patel invoked a section of the Lotteries Act in March last year, which stipulates that the NLC or its board must consult the minister whenever they want to make donations. Still, Patel instructed them, without any consultation, to donate – and even told them how much they must donate and when they must do it.
The Solidarity Fund was established in March 2020 in response to the Covid-19 crisis.
"The minister had no right to instruct the National Lotteries Commission to make such donation since he is conflicted as he is one of the board members of the Solitary Fund. He was supposed to allow the board to decide whether or not they must make such donation and how much it must be," said a senior NLC official, who asked not to be named.
"This somehow confirms One South Africa Movement leader, Mmusi Maimane's accusations that the minister is using the national lotteries commission as his bank account, and used it to seek political favours and validation. The minister was a referee and a player in this donation to the Solidarity Fund," the official added.
Three weeks ago, Maimane applied in terms of the Promotion of Access to Information Act (PAIA), challenging Patel's "irregular appointment of the new national lotteries commission board" in March.
Maimane claims Patel didn't follow the Lotteries Act when he appointed the former director-general in the Presidency, Dr Cassius Lubisi, former head of the Asset Forfeiture Unit, Willie Hofmeyer, Precious Mvulane and Beryl Ferguson to the board.
It is alleged that Patel personally called the new members and offered them the position on the board without advertising, interviewing and shortlisting anyone, as prescribed by the Lotteries Act.
Maimane yesterday said: "All citizens demand is accountability. It is such that governance issues are upheld, and there is no exclusive decision making power on any individual. We have requested the minister to provide rationality for why the board was appointed. Fundamental is whether the board approved the decision (to donate to the Solitary Fund). We are seeking transparency in decisions and will take all necessary actions to ensure transparency and accountability on the part of the minister."
United Democratic Movement leader Bantu Holomisa said Patel's instructions to the NLC "looks like abuse of power".
"Why did the chairperson of Solidarity Fund (Gloria Serobe) not communicate with NLC if the fund wanted money? It looks like it's an abuse of power," Holomisa said.
"You must remember that Cabinet ministers in this country have long usurped the powers of the accounting officers. No wonder there is such a high level of corruption. Elsewhere he would have been removed from the Cabinet, but we all know that these ministers are untouchables. They are gods unto themselves," he added.
NLC spokesperson Ndivhuwo Mafela confirmed that they "made a contribution of R50 million to the Solidarity Fund as one of its contributions in the fight against the Covid-19 pandemic".
Mafela referred other questions to Patel's office.
"With regards to other questions raised in your enquiry, the commission is of the view that they fall within the domain of the minister of trade, industry and competition."
Patel’s spokesperson, Bongani Lukhele, last week acknowledged receiving our questions and said he had forwarded them to the minister's office. Still, he failed to respond, even after a reminder was sent to him this week.
Some members of the NLC have accused Patel of trying to elbow out the current lottery operator, Ithuba, in favour of Hosken Consolidated Investments (HCI), a company owned by his close associate, Johnny Copelyn.
Copelyn is one of the business people who funded President Cyril Ramaphosa's campaign for the highest office in 2017.
Ithuba obtained the national lottery operating license in 2015, and it ends on May 31, 2023.
Patel was supposed to open the bidding process for the new licence in January this year, as per the Lotteries Act, but so far, nothing has happened.
"As it stands now, in terms of the Lotteries Act, the minister has exactly nine days to extend the contract with Ithuba for another 24 months or face a legal challenge for violating the act. The act is specific that the new bidding process must be done 24 months before the current contract elapses," another NLC official said.
The official added that Ithuba had written to Patel last year to ask for a 24-month extension as they weren't operating during the hard lockdown.
"The minister just ignored their request, and now he is faced with the reality of the situation, is either he considers their letter or give me an extension in terms of the Lotteries Act," the official added.