Photographed during the official opening of the new classrooms in December 2016 are, from left to right, Principal Mashau Thenga, Chief Livhuwani Matsila, Thovhele Vho-Thavha Mashau, Dr Alfred Nevhutanda, Deputy Minister Obed Bapela and MEC Ishmael Kgetjepe. Photo: Kaizer Nengovhela.

Leaked report sheds more light on the rot at Lottery-funded school

News - Date: 10 September 2022


By Anton van Zyl and Raymond Joseph

An independent investigation commissioned by the National Lotteries Commission (NLC) in 2020 recommended that legal action be taken against the non-profit organisation (NPO) and its directors responsible for rebuilding the Vhafamadi Secondary School in 2015.

Audit firm SkX found that the NPO, Simba Community Develop Foundation (Simba), which received grants totalling R28.3 million to build a new school, had submitted fraudulent documents, had never finished the project and that the Lottery funds could not be accounted for. Unregistered contractors were also used to build the public school.

The NLC, however, ignored the recommendations and kept the report under wraps for almost two years. Only when copies were leaked to GroundUp did more detail of the alleged fraud at Vhafamadi come to light.

The SkX report revealed that at least R100 million out of grants of almost R300 million was lost to corruption in the 11 grants it investigated.

Several of the projects investigated by SkX were in the Vhembe District. The report highlights the numerous irregularities in both the way the grants were awarded and how the funds were spent. 

In the case of Vhafamadi, SkX found that the NLC disregarded its own control mechanisms, a family business linked to its former chief operating officer benefitted from the grant, and a substandard product was delivered without the provincial Department of Education’s exercising oversight and raising the necessary red flags.

Vhafamadi under the spotlight

Almost four years ago, Limpopo Mirror carried the first of several articles about a controversial R28,3 million Lottery grant. The article must have sent shivers through the spines of the top executives at the NLC. The article, co-published with GroundUp, focused on one of the NLC’s “flagship” projects, the rebuilding of the Vhafamadi Secondary School in Limpopo.

The Vhembe-based school was destroyed during violent protest action that started in 2015. A year later, the Lottery arrived as the big benefactor and provided the funds to build a new school. What became clear only much later was that this project encompassed all the rot at the NLC and included many of the people allegedly involved in the looting of public resources.

The article that appeared early in October 2018 was titled “NLC school falling apart”. It investigated the circumstances surrounding the grant and reported on structural problems that were clearly visible in the new buildings, just 19 months after they were constructed. (GroundUp, which co-published the story, ran a similar article.)

But obtaining any information about the grant, which was one of eight “flagship projects” featured in a paid-for NLC advertorial in the Mail & Guardian newspaper in December 2018, was very difficult.

One major anomaly is that the recipient of the grant, Simba, is not mentioned by name in any of the NLC’s annual reports.

In its 2016/17 annual report, the NLC states that “R28,330,274.80 was granted to build Vhafamadi Secondary School in Limpopo, which was successfully completed in December of 2016. The building includes a fully furnished administration block, classrooms, and a fully equipped laboratory centre.”

No mention is made of the Vhafamadi grant in the 2015/16 annual report, when the grant was most likely made.

The NLC was also extremely secretive about this grant. A Promotion of Access to Information Act (PAIA) application filed by a GroundUp reporter in 2018 to obtain information about the project was ignored at first. When the reporter inquired about the request a month later, the reply came that the application was “not received” and had to be resubmitted. The NLC asked for an extension, but ended up not responding at all. 

At the time, the NLC’s information officer was former NLC Commissioner Thabang Mampane. (Mampane resigned suddenly in August this year, just months before her term was due to end. Shortly before her resignation, GroundUp reported how almost R3.9 million of the Vhafamadi grant was used to pay for Mampane’s luxury home in a North West golf estate.)

No track record, no registration – perfect!

Thanks to leaked documents, interviews with sources and lots of groundwork, putting together a timeline of events for the Vhafamadi project was possible. The information contained in the leaked SkX report also helped to fill in some of the blanks.

On 16 August 2016, the NLC’s adjudication committee sat to approve the Vhafamadi School project. Simba, which had previously unsuccessfully applied for funding, was identified as the organisation to oversee the project.

Simba was established in December 2013 by Vhembe-based boxing promoter Azwindini Simba. 

The SkX report reveals how records obtained from the Department of Social Development indicate that Simba’s directors filed an affidavit stating that it was not active in 2015 or 2016. Yet, surprisingly, the non-profit organisation produced two years of financial statements when applying for Lottery funding in 2016.

According to the SkX report, the vetting of organisations such as Simba, to ensure that they had the necessary expertise to conduct the work, was mainly the responsibility of the NLC’s chief operating officer (COO), Phillemon Letwaba, along with Marubini Ramatsekisa, a risk manager at the NLC. Ramatsekisa has since been appointed as the NLC’s Chief Risk Officer.

On 17 August 2016, the first tranche of R25 million was paid into Simba's bank account which, at the time, had a balance of just R226. But the money did not stay there for very long. On Monday, 22 August, R15 million was paid to a construction company, MShandukani Holdings, which did most of the work at the school.

A further R160 000 was paid to Ndavha Management, with Collins Tshisimba as sole director. Tshisimba acted as spokesperson for the Vhafamadi project when journalists started enquiring in 2018. His name, however, pops up in connection with several other multi-million rand Lottery projects that are currently being probed by the Special Investigating Unit (SIU).

On 29 August, most of the remaining money was moved out of Simba’s account. 

Of this, R4 million was transferred to Upbrand Properties, a company linked to Phillemon Letwaba. At that stage, his brother, Johannes, was the sole director of the company. A further R2 million found its way to Ironbridge Travelling Agency and Events. At the time, Karabo Sithole, Phillemon Letwaba’s first cousin, was the director of Ironbridge.  Letwaba’s second wife, Rebotile Malomane, became a director of the company in February 2017.

The last payment was for R1,5 million, paid to Mishsone Trading, with Jeanette Mashele as sole director. Although she is not listed at the DSD records as a director of Simba, her name also appears on Simba’s NLC application form for the funding. Mashele also features in other NLC projects under investigation, including War_RNA, an NPO that received R22-million for an old-age home that has never been completed.

Money for a mansion

MShandukani Holdings’s owner, Mashudu Shandukani, told GroundUp recently that his company was appointed as contractor to build the school. “Upbrand Properties were the nominated civil and earthworks contractor. We paid them for the work done,” he said. Why both Simba and Shandukani paid Upbrand was never explained.

Upbrand Properties was only registered as a company on 22 January 2016. Three months later, on 26 April, it was issued with a registration certificate as a member of the National Home Builders Registration Council.

Before the R4 million payment from Simba, Upbrand had a balance of just over R100 000 in its bank account. The account was further topped up with payments from MShandukani and Ironbridge. Simba had earlier paid Ironbridge R2 million.

The SkX report found that Upbrand Properties received just over R6.7 million into its account from entities linked to the rebuilding of the school.

GroundUp’s investigations revealed that Upbrand paid R3.6 million on 16 September 2016 to Jacobs Robbertze Attorneys. A week before, on 11 September, the Mojakgomo Family Trust, of which Mampane, her husband and their two adult children are trustees, signed an offer to purchase a house in Pecanwood Estate for R3.6 million. Upbrand also made an additional payment of R269 848 to cover transfer and legal costs. The house was registered in the name of the trust on 1 December 2016.

But not only the Mampane family seemed to have benefited from the grant. Mishsone Trading also paid R9,2 million to lawyers acting in the purchase of a R27 million mansion by a company owned by former NLC board chairperson Alfred Nevhutanda, according to an SIU report to Parliament. The SIU obtained a preservation order in June this year on the mansion and its furniture.

During a presentation to Parliament in March this year, SIU head advocate Andy Mothibi said investigations had identified Mishone as a “vehicle to distribute NLC funds” to businesses “directed by members of NLC Chief Operating Officer Phillemon Letwaba’s family”.

Turning a blind eye

One of the several anomalies highlighted by SkX’s investigating team is that no proper processes were followed when appointing contractors to build Vhafamadi School. 

In terms of the necessary legislation, all contractors wishing to tender for construction projects in the public sector must be registered with the Construction Industry Development Board (CIDB). Neither Upbrand nor MShandukani Holdings was registered with the CIDB at the time.

The Limpopo Department of Education also appears to have looked the other way and did not insist that properly registered companies perform the work at the school.

When the new facilities were officially handed over to the education department in February 2017, the guest list included the then Deputy Minister of Cooperative Governance and Traditional Affairs, Obed Bapela, and the Limpopo MEC for Education, Ishmael Kgetjepe.

Questions were sent to the spokesperson for the Limpopo Department of Education, Mike Maringa, last month. He was asked what processes would normally apply to a non-profit entity wanting to build a public school. Maringa was also asked why, in the case of Vhafamadi, private contractors without proper registration were allowed to build the school.

Maringa acknowledged receipt of the questions on 18 August, but did not initially respond. He eventually responded last week, using a “sub-judice” defence to not say anything. “It has come to our attention that the matter raised is being probed by the SIU and as such, we are unable to respond until the investigation is concluded,” Maringa said.

Maringa was asked whether, in light of the SIU investigation, the department had launched its own internal investigation into the Vhafamadi project. He did not respond.

And the real losers are …

In a press release issued on 13 December 2016, the NLC boasted about the Vhafamadi project. “The funding was directed toward rebuilding 20 classrooms; a library; a computer lab; a science laboratory; an NSNP kitchen; and a school hall. A palisade fence has also been installed in order to minimise vandalism,” it said.

The NLC responded to the initial media reports of the problems with the project by arranging for a hastily organised press briefing at the school on 9 October 2018. During this visit, Letwaba denied that structural problems existed, describing them as mere “defects that can be remedied”.

Letwaba was also asked about the outstanding items, including the computer and science lab. Members of the media were not allowed to inspect the building purported to host the computer lab because, they were told, it was locked and the keys were not available. No sign could be found of a science lab. Letwaba said that a separate contractor was to supply the equipment for both labs.

Learners and teachers at the school who were interviewed over the past few weeks said that no such facilities were ever established. “There are no science or computer labs,” said a teacher, who preferred to remain anonymous as the person feared that they would be disciplined for speaking to the media.

No purpose-built hall, as the NLC had claimed, was built either. “They have divided two classrooms and made a hall. There are 18 classes that are in use,” the teacher said.


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