In a major victory against what has been described as a “catastrophic corruption epidemic” in South Africa, the Special Investigating Unit (SIU) has successfully obtained an order from the Special Tribunal to scrap a fraudulent R14 million.
The funding, originally awarded by the National Lotteries Commission (NLC), was supposedly destined for a community cultural village that — ironically — already existed.
The hijacking of a non-profit organisation
The core of the deception involved the Madumelani Community Project, a non-profit organisation (NPO) that was effectively hijacked by a group of fraudsters. The SIU investigation revealed a calculated scheme where the Mukutu brothers, Tshimangadzo and Ndoweni, allegedly obtained the NPO's constitution under the guise of helping with funding applications.
They then submitted an application to the NLC without the actual NPO members' knowledge, forging signatures and appointing fictitious office-bearers. While they claimed the R14 million was for a cultural village in Hammaskraal, the Maubane Cultural Village had already been established on that very site in 2015 using a much smaller NLC grant of R300,000.
A web of fraudulent transactions
Once the funds were disbursed in February 2018 into a newly opened bank account, the R14 million was rapidly siphoned off through a complex web of entities and associates.
Between March and July 2018, the hijacked NPO made nine transactions totaling R3,070,000 to RUM Management Consultancy, a company owned by Ndoweni Makutu. During the same period, Ndhava Management Consulting, owned by Tshisimba Colin Mukondoleli, received a significant payment of R4,999,000.
The trail of money extended further as Thwala Front, owned by Mukondoleli's wife, Kharivhe Fulufhelo Promise, was paid R1,400,000. Of this amount, at least R1 million was immediately moved into a money trading account.
In April 2018 alone, five more payments totaling R4,650,000 were processed, including R3,519,000 paid to Mudone Events and Management, another company under Ndoweni Mukutu's control.
Crucially, the web of transactions included a R3 million payment to a trust associated with former NLC Board Member William Huma, who has since been ordered to reimburse tens of millions in separate misused funds.
Smaller amounts were also siphoned off for varied purposes, such as R50,000 for salaries and R400,000 recorded as a hardware purchase.
Judicial ruling and personal liability
Judge Margaret Victor, President of the Special Tribunal, did not mince words in her judgement, describing the conduct as unconscionable. She ruled that the Mukutu brothers, along with their associates and various companies – including Dzata Accountants, who allegedly prepared false financial statements – are jointly liable to repay the R14 million plus legal costs.
Judge Victor noted that money earmarked for a cultural village, which should be the pride and joy of the community, was instead lost a fraudulent scheme.
Broader crackdown on corruption
This ruling is part of a broader crackdown on NLC administration under Proclamation 32 of 2020. The SIU's work has already seen significant results, such as the previous order for William Huma to reimburse R21 million in other misused funds, leading to a preservation order on his luxury residence.
In line with the Special Investigating Units and Special Tribunals Act, the SIU has now referred the evidence of criminal conduct to the National Prosecuting Authority (NPA) for further action.