The National Lotteries Commission is the statutory body established under the Lotteries Act to regulate the National Lottery and distribute proceeds to good causes through grants to non-profit organisations. It is funded by a percentage of every lottery ticket sold — effectively a tax on the hope of South Africa's poorest. The NLC was supposed to be a lifeline for civil society. Instead, it became a feeding trough for connected insiders.
**The Mechanism**
The fraud operated at industrial scale from approximately 2014. NLC insiders directed grant applications from NPOs they controlled, approved those grants through compromised evaluation processes, and then either failed to deliver the funded projects or delivered grossly substandard work.
Phillemon Letwaba, the COO, wielded excessive control over grant approvals. Evidence presented to SCOPA showed he could approve, redirect, or block grants regardless of evaluation committee recommendations. He directed grants to NPOs linked to his relatives and associates, particularly in Limpopo.
Thabang Charlotte Mampane, a former NLC commissioner, headed the most significant external syndicate. The Mampane network operated through dozens of NPOs — some legitimately registered but hijacked (CIPC registrations altered to replace legitimate directors), others created as shell vehicles. These NPOs applied for and received grants of R5 million to R30 million each for community facilities — libraries, old age homes, drug rehabilitation centres, clinics. Case after case: either never built, partially built to a fraction of the specification, or built at massively inflated costs.
**The Denzhe Clinic**
The most notorious example: the Denzhe Primary Care clinic in Limpopo received R14.7 million in NLC funds. The clinic was never built — no construction at the site — yet the full grant was disbursed after an auditing firm signed off on a fraudulent completion report claiming the clinic was operational.
**Complicit Auditors**
At least 5 auditing firms systematically signed off on fraudulent completion reports — certifying projects as complete when they were not. These firms were paid by the NPOs (from grant funds) for their "audits," creating a perverse incentive. The IRBA was notified and disciplinary proceedings initiated.
**The NLC's Response: Attack the Messenger**
Rather than investigating the documented fraud, the NLC launched aggressive legal action against GroundUp — the news organisation that exposed it. In 2020, the NLC attempted to use the Cybercrimes Act to force GroundUp to remove articles and reveal sources. Courts rejected the application. The NLC also threatened defamation lawsuits. These SLAPP tactics demonstrated the NLC's priorities: suppressing the story, not addressing the fraud.
**SCOPA Inquiry**
The most comprehensive official examination came through SCOPA hearings (2022-2023). SCOPA heard evidence from the SIU, GroundUp, whistleblowers, and community organisations whose facilities were never built. Total irregular grants exceeded R2 billion since 2014. SCOPA recommended criminal prosecution and governance overhaul.
**The Communities**
The real victims are the communities that were promised facilities and received nothing. A library that would have served rural school children. An old age home for the elderly in a poor township. A drug rehabilitation centre for a community devastated by substance abuse. The money was taken from the poorest lottery ticket buyers and stolen by connected insiders. The communities remain without their facilities.