The National Lotteries Commission (NLC) has stated that despite two legal opinions expressing concerns, it was compelled to transfer R300 million from its reserve fund to the National Treasury.
NLC board chairperson Barney Pityana explained in a letter to Parliament dated October 3 that failing to comply would have resulted in financial misconduct charges against both the board and the NLC commissioner.
This payment was a contentious topic during a heated parliamentary meeting on September 18, where Pityana, NLC commissioner Jodi Scholtz, and other senior executives faced the trade and industry parliamentary portfolio committee.
At the time of the payment, the NLC had reserves of R1.4 billion but was only required to transfer R300 million to the Treasury. The reserve fund is intended to ensure the NLC has sufficient funds to manage cash flow issues.
Members of Parliament (MPs) criticised the NLC for not adequately addressing their questions and demanded written responses from Pityana, which he has since provided.
Parks Tau is the newly appointed Minister of Trade and Industry, and Mzwandile Masina is the new chair of the parliamentary portfolio committee.
In a letter to Tau, Masina, along with several other MPs, called for the dissolution of the NLC’s board and the dismissal of Scholtz.
The committee has summoned the Treasury to explain the R300 million payment on October 16.
GroundUp reported a coordinated campaign, both within and outside Parliament, pushing for Scholtz’s dismissal and the dissolution of the NLC board led by Pityana.
The NLC has faced sustained attacks in recent weeks, with allegations of corruption, nepotism, conflicts of interest, and discrimination against staff, though no evidence has been provided by MPs or others making these claims.
Many of the MPs’ questions during the September 18 meeting were based on recent media reports and allegations in letters to Tau.
Various individuals and organisations have united in their criticism of the NLC, which has been plagued by corruption for a decade.
The parliamentary attack was spearheaded by Masina, former cabinet minister Malusi Gigaba, and EFF’s Mbuyiseni Ndlozi, with support from MPs of other parties.
This controversy occurs amid the process of appointing a new lottery license operator. There appears to be resistance from former and current executives and some board members, who have either resigned or are facing disciplinary hearings for their involvement in the extensive looting of the lottery until 2022.
The new board, led by Pityana, was appointed in 2022 and has since embarked on a clean-up operation, freezing properties and assets worth millions of rands belonging to former NLC executives and board members acquired with misappropriated funds.
The Democratic Alliance (DA) was a lone voice in Parliament defending the NLC against these attacks.
EFF MP Mbuyiseni Ndlozi raised the issue of the R300 million payment to the Treasury, arguing that since the commission does not receive government funding, it should not have complied with the Treasury’s instruction to transfer money from its reserve fund.
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