South Africa’s NLC backs asset freeze in US$787k lottery grant corruption probe

South Africa’s National Lotteries Commission has welcomed a preservation order freezing two Pretoria properties allegedly linked to the misuse of a R13 million lottery grant intended for a community agricultural project in KwaZulu-Natal.

South Africa’s National Lotteries Commission has backed a new asset-freezing order secured by the Special Investigating Unit in an ongoing investigation into alleged misuse of lottery grant funding. The preservation order, granted by the Special Tribunal, targets two properties in The Orchards and Soshanguve, Pretoria, linked to funds allocated by the NLC to Malusi We Sizwe Non-Profit Company. The grant was worth R13 million, or roughly US$787,000 at current exchange levels.

The grant was approved in November 2018 for an agricultural project in Zululand District Municipality, KwaZulu-Natal. According to the SIU, the project was supposed to benefit about 1,900 people, including unemployed youth and elderly community members. Investigators allege that instead of being used for the agricultural initiative, part of the money was diverted into transactions linked to private property purchases.

The SIU said the NLC paid the grant in two tranches: R7 million in December 2018 and R6 million in March 2019. Before receiving the funding, Malusi We Sizwe NPC reportedly had only R100 in its bank account. Investigators later traced flows from the NPC’s account to several entities and property-related transactions.

Among the transactions identified by the SIU were the purchase of a Soshanguve property for R345,000, transfers totalling R5.6 million to Trizaflo (Pty) Ltd, and the later purchase of another property in The Orchards. The SIU said the properties were bought for the benefit of Nelisiwe Mahlangu using NLC funds, rather than for the intended agricultural project in KwaZulu-Natal.

The preservation order is intended to prevent the sale or disposal of the properties while civil proceedings continue. The SIU said the action forms part of its wider investigation into alleged corruption and mismanagement involving NLC-funded projects, conducted under Proclamation 32 of 2020 issued by President Cyril Ramaphosa.

NLC Commissioner Jodi Scholtz welcomed the SIU’s action and said the recovery process was an important step in protecting public funds. NLC Board chairperson Professor Barney Pityana also said the case showed the human cost of corruption, because funds intended for vulnerable communities had allegedly been misused instead of delivering development on the ground.

For South Africa’s lottery sector, the case reinforces the importance of stronger grant governance and post-award monitoring. The NLC has been under pressure for years over historic grant-funding scandals, and asset recovery is becoming a key part of restoring public confidence. The next test will be whether preservation orders lead to final recoveries and whether accountability reaches not only the immediate recipients, but also any officials or intermediaries involved in approving and redirecting the funds.