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Officials Reveal Accusations against South African Gambling Board

Oct 21, 2014 - by Monica Erdei
Members of the South African National Gambling Board are accused of corruption

Members of the South African National Gambling Board are accused of corruption

The Trade and Industry department wrote an angry letter detailing the Gambling Board’s alleged graft and financial mismanagement.

Last month, South Africa’s Trade and Industry Minister Rob Davies suspended the entire Gambling Board, accusing its members of corruption, intimidation of staff, theft of evidence, wasteful spending of funds, as well as other illegalities.

The department’s oversight committee asked the minister to provide his reasons by Friday, and chairwoman Joan Fubbs received a letter detailing the accusations. Lionel October, the department’s director, said the suspension had been a “precautionary” measure. He spoke on behalf of Davies, who was traveling abroad.

Another letter written by the two administrators appointed by Davies after the suspension and addressed to Fubbs said the former board’s problems went even deeper.

IOL Independent: Call for probe into graft at gambling board

The reasons behind Davies’ decision to suspend the board include corruption, intimidation and bullying of employees, running up an overdraft on the board’s bank account, fruitless and wasteful expenditure. Former members of the board have also been accused of theft of evidence and illegally designating a member whose term had expired to serve as a consultant.

According to online gambling news, a whistleblower also revealed that chairwoman Linda de Vries and deputy chairwoman Nana Magomola were both members and executive director, respectively, of the National Responsible Gambling Foundation.

The two had never disclosed this information to the minister, as required by law. Members of the board have allegedly run up an overdraft without asking the finance minister for permission, and failed to audit the trust fund or to disclose this.

Further investigations revealed that the board had signed a 9-year lease for an office space, although it only had 16 employees and was already occupying premises in the trade and industry department’s building, at a cost of R23.2 million over 15 years. The new space was leased at an additional cost of R58.4 million, which could not be justified.

The board reported a loss of R4 million in 2013-2014, and a deficit of R4.8 million during the previous year. At present, its liabilities exceed its assets by R8.1 million.

Casinos-Online: South African Minister Opens Up On Gambling Board Scandal (Update)

Trade and Industry Minister Rob Davies belatedly briefed the parliamentary committee on the reasons why he chose to suspend the entire South African National Gambling Board six weeks ago.

Joan Fubbs, chair of the parliamentary trade and industry portfolio committee, demanded details on the scandal, describing the government’s actions as lacking transparency.
Allegations of maladministration, wasteful spending and corrupt activities were included in a written brief put together by the minister and presented by the DTI director general.

As a first step, Davies ordered an investigation into the board’s conduct and appointed two temporary administrators to run the organization until investigators shed some light on the issue.

In his brief, the minister described the suspensions as a “precautionary”. A report by the auditor-general indicated possible contraventions of the Public Finance Management Act, claiming that the board had “…failed to prevent irregular, fruitless and wasteful expenditure, and made overdraft on the entity’s bank account without the approval of the minister of finance”.

Other allegations include breaking the state’s laws by “allowing members whose term of office had expired to continue participating in the board’s activities and representing the NGB”, unlawful staff appointments, corrupt activity, tyrannical behavior toward staff and the theft of evidential material.

Spokesman Dean Macpherson MP added that members of the board had increased their own salaries by a “staggering” 46% over the past year, spending an additional R2.7 million on international travel. Macpherson said his party would propose that criminal charges be laid against any illegal behavior that can be proved.

The NGB is responsible for overseeing South Africa’s entire gambling industry, which made a total profit of R21.8 billion in 2013 and generated R2.2 billion in tax revenues. Most of it came from land based casinos.

MailandGuardian: NEF boss stays put as auditors probe graft claims

The chief executive of the National Empowerment Fund (NEF) appeared in the newspapers after being accused of corruption, fraud and breaking the country’s gambling laws. An investigation is under way, probing the allegations.

Following instructions given by Trade and Industry Minister Rob Davies, the board of the NEF has appointed an auditing firm to “determine the veracity of the allegations”. Deloitte is now looking into the matter to find out if the accusations brought against Philisiwe Mthethwa and two senior officials are true.

An anonymous whistleblower claimed the organization’s senior manager has committed fraud and was guilty of corruption. It was speculated that Mthethwa would be suspended during the investigation, but the board then decided against it.

“After having taken independent legal advice, after a considered deliberation and pending the results of Deloitte’s report on the veracity of the allegations, the board of trustees decided not to suspend any of the individuals who are the subject of the allegations,” a statement said.

“We are confident that no member of the NEF will do anything to ­compromise the integrity of the investigation, and have received commitments from the affected individuals to that effect.”

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