Fraudulent activities lead SIU to invalidate R14m grant from National Lotteries Commission
The Special Investigating Unit has obtained a Special Tribunal order setting aside a R14 million grant from the National Lotteries Commission meant for the construction of a cultural village.
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The Special Investigating Unit (SIU) has secured a Special Tribunal order declaring a R14 million grant from the National Lotteries Commission (NLC) to the Madumelani Community Project fraudulent and unlawful.
Retired Judge Margaret Victor issued the ruling in February, which was released by the SIU on Tuesday. The grant, awarded in February 2018, has been declared void ab initio.
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.