WeeklySA_AdminProbe: The siu called to investigate the dodgy grants as part of the R2 billion lotto corruption
By Nhlanhla Mbatha and Monk Nkomo
The Democratic Alliance (DA) has called on the Special Investigative Unit (SIU) to swiftly investigate the R24 million funding that have allegedly went missing from the coffers of the Soweto-based Jozi FM.
This will be part of a probe by the SIU into the R2 billion Lotto corruption scandal that has rocked several companies which had misappropriated funds received from the National Lotteries Commission.
Toby Chance, the DA spokesperson on Trade, Industry and Competition, said in a statement that the Soweto Media Resources Centre (SMRC), trading as Jozi FM, received two tranches of Lotto funding totalling R35 million between 2013 and 2016.
During the 2015-2016 funding window, Jozi FM received a second tranche totalling R11, 219, 440 which has allegedly not been accounted for and has now resulted in a dispute between Jozi FM management and its board of directors.
Chance said the Lotto grant was meant to fund a new media centre adjoining the Soweto Theatre complex in Jabulani, Soweto, but the money appeared to have vanished without trace.
He added that since Jozi FM station management went public with these allegations, two board members had resigned citing loss of confidence in the board chairperson. They also distanced themselves from the alleged financial transgressions.
Commissioner of the National Lotteries Commission, Jodi Scholtz, confirmed to the DA that files relating to the grant had been handed over to the SIU which was investigating up to R2 billion of dodgy grants facilitated by corrupt NLC insiders including board members, staff, accounting and law firms.
During a media briefing at the community radio station in Dube, Soweto, last week, Jozi FM’s chief executive officer, Mpho Mhlongo confirmed that they received funding amounting to R12m from the NLC more than a decade ago. The funds were secured by the station’s board chaired by Rapitse Montsho.
“We had initially received R12 million, which was deposited directly into our Jozi FM account,” Mhlongo said, adding that upon enquiry from the NLC, it emerged that the board had actually received R24 million.
‘One of the duties of the board is to raise funds for the radio station.”
To strengthen accountability and transparency, Mhlongo said the board and the station’s management opened a separate bank account specifically to manage the NLC funds.
“The board and I, as the CEO, agreed that these funds should be moved into what we called the ‘NLC account,’ ensuring that they are accounted for and audited separately from our day-to-day operational account.”
This was to ensure proper financial oversight and compliance with governance standards related to the NLC funding.
Mhlongo and two other directors from the board were appointed signatories to the funds. However, it was agreed that a minimum of two people could still sign to access the funds.
“To date, we have no idea what happened to the funds. No one is coming to the party to say this is where we are. We did not hold the annual general meeting last year and this year because of the issue. We are unable to move forward.”
Mhlongo said the board had initially said it would use the funds to build the station’s new state-of-the art studios. The board later presented to the station’s management what appeared to be an impressive development proposal.
“We were shown a beautiful plan of a new property that was to be built with those funds. To date, nothing has happened’’.
In his response on a major South African TV news channel, Montsho said the money the board secured from the NLC was not meant for Jozi FM or the SMRC. He denied having embezzled any funds.
“What happened is that the SMRC assisted me to secure funds for a different project outside Jozi FM and the SMRC. I requested the SMRC to assist because they were compliant with the requirements of the NLC to apply for funds. They were a conduit partner to help me secure the funding. That was all. They were and are still not entitled to the money,” Montsho said.
He denied having received R24m and declined to be drawn into saying how much of the grant money he had received, only saying the money came in portions.
“They must prove that we received R24m. The matter is going to court and I am going to prove to the court that not a single cent was meant for them,” Montsho said.
Asked why there had been no annual general meetings (AGM) last year and this year, Montsho said the board would convene an elective annual general meeting this year in line with a Johannesburg High Court order.
“In terms of that order, the board was given 90 days to prepare audited statements and hold the AGM. The 90 days expires early December,” Montsho said.
He added that the board found it “surprising and awkward” that the CEO, Mhlongo and the Jozi FM management members held a press conference without the approval or knowledge of the board.
“The board has noted these developments and will be convening a meeting soon to look into this. Further pronouncements will be made in due course,” Montsho said, adding that the board categorically denied the allegations levelled against them.
He urged the station’s management to observe the court order and to finalise audited financial statements before the AGM date can be announced.
Chance called on the SIU to finalise its investigation without delay and if criminal activities had occurred, to press charges against the offending individuals without delay.
