- Properties and assets, including actress Terry Pheto’s luxury home, have been frozen by court order.
- The Asset Forfeiture Unit is seeking to recover millions misappropriated from Lottery grants.
- GroundUp has reliably learnt that the Special Investigating Unit has “made criminal referrals” to the NPA involving National Lotteries Commission board members, their relatives and cronies.
- Freezing of assets is “just the beginning” of a Lottery clean-up, says source with knowledge of the investigations.
Tsotsi and Bold and the Beautiful star Terry Pheto’s three-storey home was built using R3 million of lottery grant money meant for an “initiation programme”.
The house has been attached, it was revealed on Friday, after the National Prosecuting Authority’s (NPA’s) Asset Forfeiture Unit (AFU) went to court to freeze various assets implicated in fraud involving millions in National Lotteries Commission (NLC) grants.
Pheto’s home money came from a R20.2 million grant given by the NLC to a dodgy non-profit organisation, Zibsimode. The house is in upmarket Bryanston.
Pheto issued a statement on Twitter over the weekend denying that she had benefited from Lottery funds. “I deny any involvement in the alleged scheme. I also had no prior knowledge of an application to obtain a preservation order against me,” she said.
— Terry Pheto (@TerryPheto) November 5, 2022
Pheto said she would “cooperate fully with this investigation in an open and transparent manner”.
Zibsimode, a shelf company, was purchased on 9 May 2017. The company was then awarded two grants in rapid succession: R16.2 million on 30 May 2017, just 21 days after new directors were appointed, and a further R4 million on 6 July 2017.
A second luxury house in Bryanston, belonging to Upbrand Properties, which has been at the heart of the looting of millions of rands from the Lottery, was also included in the preservation order.
Cabinet minister Fikile Mbalula and his wife initially made a R5.6 million cash offer for the home. But they dropped out and the house was then bought by Upbrand, with an associate of Mbula’s acting as the middleman, on identical terms to those that the couple had offered.
The Bryanston homes are two of nine properties, including luxury houses and a farm, frozen after a secret application by the NPA was granted. The application was heard by Gauteng division Deputy Judge President Aubrey Ledwaba in his chambers last Friday morning.
Also frozen were two Ocean Basket franchises and a farm belonging to Pretoria lawyer Lesley Ramulifho, whose non-profits he controls have benefited from at least R60 million in Lottery grants. A top-of-the-range BMW 420i belonging to former NLC chief operating officer Phillemon Letwaba was also included in the order.
In total, the assets that were frozen were valued at over R25 million, according to a statement issued by the SIU. Several of the frozen properties are linked to Letwaba, a source with knowledge of the matter told GroundUp.
Among the other properties seized were the North West golf estate home of former NLC Commissioner Thabang Mampane, which was bought with Lottery money.
Read: Lottery boss resigns
Also frozen by the court was the luxury Pretoria “country estate” home of Letwaba’s wife, who also benefited from Lottery funds.
Advocate Andy Mothibi, the head of the SIU, told the Trade, Industry and Competition Parliamentary Portfolio Committee in September that his unit was investigating over R1.4-billion in dodgy Lottery grants.
Minister Ebrahim Patel told the committee meeting that the “syndicates responsible for looting public [Lottery] funds were able to rely on a network of professional firms that enabled the monies to be redirected”, and that these syndicates had used “sophisticated methods to cover up their actions and deflect attention”.
Lawyers had helped facilitate the looting, he said, and both Patel and the SIU said that these lawyers would be reported to their professional bodies for action to be taken, including possible disbarment.
The order was granted to the AFU, based on investigations by the SIU, which has been probing Lottery corruption ever since President Cyril Ramaphosa signed a proclamation in November 2020 authorising the investigation.
The AFU became involved after Willie Hofmeyr, a former head of the unit and now an NLC board member, pushed for them to join the investigation. The SIU is only mandated to recover money lost through corruption, while the AFU has prosecutorial powers.
“The next step will be to apply for a forfeiture order,” NPA spokesperson Lumka Mahanjana said in a media statement. “Once a forfeiture order is granted, the properties will be sold at public auction, and proceeds returned to the NLC.”
Mahanjana said that Lottery grants were used to buy luxury properties “for the benefit of employees of the NLC and members of the non-profit organisations and/or their family members/friends.”
“In most instances, the properties were registered in the names of the entities and not in the name of private individuals. Some entities masqueraded as construction companies but did not do construction (or very little) and were effectively used as money laundering vehicles to receive kickbacks from non-profit organisations who received grants from the NLC,” she said.
GroundUp has reliably learned that the SIU has “made criminal referrals” to the NPA involving Letwaba, Ramulifho, Mampane, Nevhutanda, former board member William Huma, who benefited hugely from Lottery grants, and Mashudu Shandukani, who is included in Friday’s order, and his wife, Pretty.
Shandukani’s company was the main contractor on a Lottery-funded project to build a school in Limpopo, where millions of rands were misappropriated.
Movie and TV star
Pheto has enjoyed a stellar career as an actress. A highlight was starring in Tsotsi, which won multiple awards, including an Oscar for best foreign film in 2005. She also landed a part in the popular American soapie, The Bold and the Beautiful and starred in a movie called How to Steal 2 Million.
Pheto, who lives in the house with her husband, is a close friend of the former NLC board chairperson Alfred Nevhutanda, whose scandal-ridden term ended in November 2020.
One of the directors of Zibsimode is Rudzani Nemaungani, a pastor in Nevhutanda’s Higher Grace International Church. Zibsimode was awarded over R20 million from the NLC’s Arts and Culture sector for an “initiation programme” in the 2017/18 financial year.
A document leaked to GroundUp in 2018 revealed how a whistleblower raised a red flag about the project. Despite this, the non-profit organisation received a further R2 million in the 2021/22 financial year from the NLC’s charities sector.
It is not known what the second grant was for.
A Promotion of Access to Information Act (PAIA) application in 2018 requesting information about the Zibsimode grant was refused by the NLC on the grounds that it was bound by law to protect the privacy of its grant recipients.
Pheto’s sister, Dimakatso, is a director of Zibsibix, a non-profit company that received R5 million from the NLC in 2018/19.
Details of what this funding was used for are not known. The company was bought “off-the-shelf” on 11 July 2018, after which new directors, including Pheto’s sister, were appointed. The grant was paid out sometime between July and 31 March 2019, the end of the NLC’s financial year.
Several people and entities were named in the order obtained by the AFU. Here are key details:
- Collins Tshisimba (see here) is a central figure in several dodgy Lottery-funded projects, including one to build a school in Vuwani in Limpopo, where millions were misappropriated. Two townhouses in Centurion belonging to him and his wife, allegedly paid for with Lottery funds, have been frozen.
- Tshisimba is married to Fulufhelo Promise Kharivhe (see here), sole director of Thwale Front, a non-profit organisation, which was allegedly used to launder millions in looted Lottery grants to NPOs. Thwale paid R1.9 million into Huma’s home bond in April 2018. An amount of R200 000 was also transferred into Thwala Front (Pty) Ltd’s bank account by The Message, a non-profit organisation that received a R1.6 million grant in the 2018/19 financial year.
- AO Residence Trust, represented by Mashudu Shandukani, was the main contractor that built the Vuwani school. Shandukani’s magnificent home was featured on Top Billing a few years ago. It is not known if this home was among those frozen by the order.
- Rasemate Family Trust, of which Letwaba’s second wife is a trustee, owns a luxury home on the Midstream Estate near Pretoria that was frozen. She lives in the house with the couple’s two children.
- The Mojakgomo Family Trust, of which Mampane, her husband, and two adult children are beneficiaries, owns the house in the Pecanwood Golf Estate in Hartebeesfontein, in North West, in which she and her husband live.
- A farm is frozen that belongs to lawyer Lesley Ramulifho, who has been among those at the heart of the looting.
- Terry Pheto’s home in Bryanston is frozen.
- The second Bryanston home, owned by Upbrand Properties Trust, represented by director Sthembiso Jim Skosana, has been frozen.
- Two Ocean Basket franchises at Carnival City and Carnival Mall in Gauteng have been frozen. These were bought by Ramulifho using money from a grant to build a drug rehabilitation centre. Ramulifho admitted to “borrowing” the money from the organisation (in breach of the terms of the grant) but claimed that he had repaid it. He used forged proof of payments and doctored bank statements to “prove” this in thus far unsuccessful litigation to force GroundUp to remove stories about him from its website. GroundUp went to court after the Legal Practice Council rejected its complaint against Ramulifho. The matter will come before a judge in the Johannesburg High Court on 10 November;
- A house owned by the Just Cuban Trust, which is connected to Letwaba, is frozen.
Well-informed sources have confirmed that investigations into further matters involving the abuse of Lottery funds are nearing completion and more applications to freeze assets will be brought before the courts soon.
“The freezing of assets is just the beginning,” said a source with knowledge of the investigations, who asked to remain anonymous because they are not mandated to speak to the media.
“There is a determination from everyone involved to clean up the Lottery and recover money stolen through corruption.
“We will not rest until the money is recovered and the people involved are held to account,” the source said.
Copyright (C) GroundUp 2022
This article was first published on GroundUp.