The Special Tribunal has ‘pierced the corporate veil’ of several companies it found were used as ‘sham fronts’ in a R14m lottery grant scam, and has ordered their directors to repay the funds personally, reports GroundUp.

In a recent decision, tribunal Judge President Margaret Victor ruled in favour of the Special Investigation Unit (SIU), setting aside a 2018 grant awarded by the National Lotteries Commission (NLC) to Madumelani NPO.

The grant was ostensibly for the construction of a cultural village. Victor found that the ‘antagonists’, including brothers Tshimangadzo and Ndoweni Mukutu, had acted in concert to defraud the NLC.

The SIU submitted that the grant application was signed by Tshimangadzo Mukutu, who described himself as a director of Madumelani. The SIU said the community project had been hijacked and that Mukutu had obtained a copy of the organisation’s constitution under the guise of helping it secure funding.

The entire process was fraudulent, the SIU said.

The R14m grant was deposited in a newly opened bank account. Funds were immediately transferred into accounts held by companies associated with the brothers. This included R3m to a trust of which Advocate William Huma, a former NLC board member, was a trustee.

Ndoweni Mukutu denied involvement in the ‘hijacking’. 

Victor said that the scheme was clearly fraudulent. She declared the NLC contract and the subsequent grant award unlawful, and ordered that the directors of four companies linked to the brothers – Mdudonde Events and Investment Pty Ltd, RUM Management Consultancy Pty Ltd, Thwala Front Pty Ltd and Ndhava Management CC – be held personally liable for repayment of the R14m.

They were also ordered to pay the costs of the application.

Full GroundUp report