{"id":254457,"date":"2023-03-24T00:03:34","date_gmt":"2023-03-23T22:03:34","guid":{"rendered":"https:\/\/www.groundup.org.za\/article\/records-lotterys-multimillion-rand-litigation-vanish\/"},"modified":"2023-03-24T00:03:34","modified_gmt":"2023-03-23T22:03:34","slug":"key-legal-files-involving-lotterys-multimillion-rand-litigation-have-vanished","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/key-legal-files-involving-lotterys-multimillion-rand-litigation-have-vanished\/","title":{"rendered":"Key legal files involving Lottery\u2019s multimillion-rand litigation have vanished"},"content":{"rendered":"<div id=\"article_body\">\n<p><a class=\"bigger-image\" href=\"https:\/\/www.groundup.org.za\/media\/uploads\/images\/Graphics\/lisa_nelson\/groundup-lotto_large.jpg\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" alt src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2023\/03\/key-legal-files-involving-lotterys-multimillion-rand-litigation-have-vanished.jpg\"><\/a><\/p>\n<p class=\"caption\">Legal files have gone missing at the National Lotteries Commission and Minister Ebrahim Patel suspects collaboration between the old NLC and lawyers. He says he will probe further. Graphic: Lisa Nelson<\/p>\n<ul>\n<li>The National Lotteries Commission (NLC) used \u201cenormous amounts\u201d of public money to fight government oversight, Minister of Trade Industry and Competition Ebrahim Patel said.<\/li>\n<li>Patel told Parliament that NLC files involving tens of millions of rands of litigation have gone missing.<\/li>\n<li>He said there may be \u201ca level of collaboration\u201d between former NLC executives and law firms involving resources meant to uplift poor people.<\/li>\n<li>\u201cWe need to probe harder,\u201d Patel told MPs.<\/li>\n<\/ul>\n<p>National Lotteries Commission (NLC) legal files including documents from litigation <a href=\"https:\/\/www.groundup.org.za\/article\/litigious-lottery-spends-millions-rands-lawyers\/\">running into tens of millions of rands<\/a> have gone missing, according to Trade, Industry and Competition (TIC) minister Ebrahim Patel, who has oversight of the Lottery.<\/p>\n<p>And, an attempt to get this from the lawyers involved \u201chas not proved successful,\u201d <a href=\"https:\/\/drive.google.com\/file\/d\/1fmpU6X_u1s665dnyzPA89VPRNvG56EFm\/view?usp=sharing\">Patel told Parliament\u2019s TIC portfolio committee<\/a> last week.<\/p>\n<p>\u201cWhat it points me to is that we are on to something here, that we need to probe harder,\u201d Patel told MPs. He said he there may well have been collaboration between old NLC management, including board members, with law firms to deprive the society of \u201cresources that the NLC should make available to poor communities, and to frustrate and undermine the efforts of the ministry to introduce good governance\u201d.<img loading=\"lazy\" decoding=\"async\" alt class=\"leave\" height=\"1\" id=\"gu_counter\" src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2023\/03\/key-legal-files-involving-lotterys-multimillion-rand-litigation-have-vanished.gif\" width=\"1\"><\/p>\n<p>Patel was responding to a question posed by Democratic Alliance MP Mat Cuthbert, who was following up on an earlier response by Patel about the NLC\u2019s spending on legal fees. Late last year, Patel said he was unhappy with an <a href=\"https:\/\/drive.google.com\/file\/d\/13EB6KgDg7BanxnPLv12CnUpFvO26oysm\/view?usp=sharing\">NLC response<\/a> to parliamentary questions and <a href=\"https:\/\/drive.google.com\/file\/d\/13EB6KgDg7BanxnPLv12CnUpFvO26oysm\/view\">asked<\/a> for further, detailed information.<\/p>\n<p>Included in the information Patel asked the NLC to supply are details of any expenses incurred for litigation or legal advice involving himself and his department, any politician, media house or journalist, and the South African National Editors\u2019 Forum (SANEF). Litigation against Patel included <a href=\"https:\/\/www.groundup.org.za\/article\/judge-dismisses-lottery-bid-to-have-corruption-probe-declared-unlawful\/\">a failed attempt<\/a> by the NLC to have a corruption investigation he initiated declared illegal and litigation <a href=\"https:\/\/www.groundup.org.za\/article\/lotteries-commission-goes-court-force-minister-appoint-new-board\/\">to force him<\/a> to appoint a new Lottery board.<\/p>\n<p>Patel told Cuthbert: \u201cThe NLC used lawfare against the ministry \u2026 [it] used public money, enormous quantities of public money, to fight oversight by this ministry over their affairs.\u201d<\/p>\n<p>\u201cSo I am even more interested than you would be in getting to the bottom of the legal costs, which lawyers were used, what are the briefs that were given to them, were those briefs legitimate and were those expenditures properly authorised [and] were any of those expenditures properly authorised? Were those expenditures for a proper public purpose or were they in defence of corruption? My interest in this is enormous,\u201d Patel said.<\/p>\n<p>Quoting correspondence from February this year between himself and new NLC Commissioner Jodi Scholtz, Patel said she had told him that the organisation was \u201cexperiencing challenges\u201d in supplying the information he had requested.<\/p>\n<p>\u201cWe are attempting contacting the relevant law firms but this has not proved successful in obtaining the relevant information,\u201d Scholtz told the minister.<\/p>\n<p>And when the NLC reported to the TIC portfolio committee on its most recent financial results last week, Scholtz told MPs that all the contracts with legal service providers were cancelled because they were irregular.<\/p>\n<p>\u201cThis has compounded the difficulties and we have to look at other options in order to get this info [relating to litigation and briefs.] We have promised the minister that we will get the info to him by 31 March, but it is a challenge right now as we do not have access to any of this information,\u201d she said.<\/p>\n<p>She added that the problem was compounded by \u201cchallenges\u201d within the NLC\u2019s legal department as there was only one administrative staff member, as the head of the unit had resigned, and two people are on extended sick leave.<\/p>\n<p>Even though it had its own legal department with eight staff, the NLC\u2019s legal costs skyrocketed under the previous executive and board, as the organisation used costly legal threats and litigation to silence critics and to ward off attempts by Patel and his department to hold it to account.<\/p>\n<p>Soon after he was appointed on a three-month contract last year, (then) acting NLC commissioner Lionel October issued a <a href=\"https:\/\/drive.google.com\/file\/d\/1OXPXzXnO_68lvck9LRVLA5vjinGYIGh5\/view?usp=sharing\">memo<\/a> instructing the organisation\u2019s management to stop briefing the panel of lawyers on new or continuing matters. The reason, he said, was that the Auditor-General (AG) had declared payments to the NLC\u2019s legal panel to be \u201cirregular expenditure\u201d.<\/p>\n<p>Shortly before, the AG had <a href=\"https:\/\/drive.google.com\/file\/d\/1kU8WbW_oWRqcNX4Ed-GhGBIqPn_Q9wJ2\/view\">noted in a confidential management report <\/a>to the NLC on its findings for the 2021\/2022 financial year, that \u201c\u2026as per the analysis of the financial expenditure for the NLC, we noted that legal fees increased by R37-million, which represents a 91 percent increase from the prior year\u201d. Legal fees had amounted to R78-million, which made up 31% of all goods and services that were procured, the Auditor-General said.<\/p>\n<p>Based on a sample of legal fees paid out by the NLC, the Auditor-General found that 37% of these fees were for disciplinary hearings and cases at the Commission for Conciliation, Mediation and Arbitration. The next highest category, 30%, was for \u201clegal opinion on corporate governance and review of regulation\u201d.<\/p>\n<p>GroundUp reported that between 2016 and 2021, the NLC spent R8-million <a href=\"https:\/\/www.groundup.org.za\/article\/nlc-spends-millions-litigation-former-employees\/\">in litigation against former staff<\/a>, including R5.7-million in matters involving <a href=\"https:\/\/www.groundup.org.za\/article\/lottery-whistleblower-pays-high-price\/\">whistleblower Mzukise Makatse<\/a>.<\/p>\n<\/p><\/div>\n<div id=\"article_copyright\">\n<p>\u00a9 2023 GroundUp. This article is licensed under a <a href=\"http:\/\/creativecommons.org\/licenses\/by-nd\/4.0\/\" rel=\"license\">Creative Commons Attribution-NoDerivatives 4.0 International License<\/a>.<\/p>\n<p>You may republish this article, so long as you credit the authors and GroundUp, and do not change the text. Please include a link back to the original article.<\/p>\n<p>We put an invisible pixel in the article so that we can count traffic to republishers. All analytics tools are solely on our servers. We do not give our logs to any third party. Logs are deleted after two weeks. We do not use any IP address identifying information except to count regional traffic. We are solely interested in counting hits, <b>not tracking<\/b> users. If you republish, please do not delete the invisible pixel.<\/p>\n<\/p><\/div>\n<p><img decoding=\"async\" src=\"http:\/\/www.myza.co.za\/press\/wp-content\/uploads\/2023\/03\/key-legal-files-involving-lotterys-multimillion-rand-litigation-have-vanished.jpg\"><a href=\"https:\/\/www.groundup.org.za\/\">Source: GroundUp<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Legal files have gone missing at the National Lotteries Commission and Minister Ebrahim Patel suspects collaboration between the old NLC and lawyers. He says he will probe further. Graphic: Lisa Nelson The National Lotteries Commission (NLC) used \u201cenormous amounts\u201d of public money to fight government oversight, Minister of Trade Industry and Competition Ebrahim Patel said. 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