Toby Chance - More horror for Lottery corruption whistleblowers

In his latest interview with Chris Steyn, Toby Chance, the Democratic Alliance's (DA’s) Spokesperson on Trade, Industry and Competition, details yet another harsh blow to former National Lotteries Commission (NLC) staff who had exposed large-scale corruption and illegal grants of up to R2bn. He describes how they were initially promised R20m for reparations, but recently informed that they won’t receive monetary compensation. “It turns out that most of the money would have been spent on consulting fees and other things which doesn't help the whistleblowers one bit…they’ve been financially ruined. Their families have abandoned them. They're living in caravans. They're close to suicide. They've lost their jobs. They can't get jobs. Their lives have been completely ruined…. these people risk everything for exposing the rot at the NLC”. Chance further points out that, between 2019 and 2024, the NLC spent over R70 million on legal fees, “much of which was spent on basically taking the whistleblowers to court and protecting the NLC from the charges that were levelled against them by the whistleblowers”. Meanwhile, “not a single one of (those implicated) has yet been presented with a set of yellow overalls”.Chance also gives an update on the legal battles over the awarding of the 4th licence..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.Edited transcript of the interview.Chris Steyn (00:01.173)Lottery corruption whistleblowers - whose lives were imploded by their bravery - have been dealt another cruel blow. We get the latest from Toby Chance, the Democratic Alliance's spokesperson on Trade, Industry and Competition. Welcome, Toby.Toby Chance (00:18.882)Thank you, Chris. Good morning.Chris Steyn (00:21.441)What are the latest developments with regards to the National Lottery Commission's so-called Reparative Measures Programme?Toby Chance (00:31.278)The latest is that on the 10th of December the NLC released a statement explaining what they called their reparative process and explained that it had been many months, in fact years, in the making and it immediately elicited a furious response from the so-called whistleblowers, well definitely the whistleblowers, but they're certainly not happy with the decision that the NLC has made because the expectations that were building up that there was going to be a monetary component to the reparations did not eventuate. And so there's been an outcry from them and they've now handed over to lawyers. They've got John Clarke, a social worker, involved to help them deal with the emotional financial blow that they have sustained. And this is just the beginning of another sort of stage in this saga.Chris Steyn (01:26.307)You have written to Minister Parks Tau. What are you demanding to know?Toby Chance (01:32.802)Well actually I wrote to Mr Tau before the NLC statement was issued because we hadn't heard anything. And I asked him to outline the decision-making process that had been undertaken by the NLC and the Ministry to make the decision around the reparations and to explain who was consulted, when they were consulted, what was the outcome of those discussions and the costs involved, because remember, in answer to a question posed last year, we were told that 20 million Rand had been budgeted for the reparations process. And although they didn't break that down, it now turns out that none of that money is going to be paid to the whistleblowers directly. It seems that all the money is now going to be spent or has already been spent on what they call the reparative process. What we want to understand is what that money has exactly been spent on - and it turns out that most of the money would have been spent on consulting fees and other things which doesn't help the whistleblowers one bit.Chris Steyn (02:39.395)So, they've just been thrown under the bus a second time.Toby Chance (02:43.246)Well, look, I need to explain what they have received. What they have received is shopping vouchers. I know it sounds ludicrous, but that's part of what they've received. They've received contributions towards psychological counseling and some educational support for their children. But you need to bear in mind that between 2019 and 2024, the NLC spent over 70 million Rand on legal fees, much of which was spent on basically taking the whistleblowers to court and protecting the NLC from the charges that were levelled against them by the whistleblowers. And over 7 million Rand were spent on defending the NLC against two of these whistleblowers. And you can imagine how much of their own money these whistleblowers actually spent to defend themselves. Millions. And that's resulted in financial ruin for many of them. And, you know, what they were expecting, understandably, was some form of compensation.Now, what ….the current chairperson, the retiring chairperson of the NLC, has said was that there was no regulatory or legislative leeway for the NLC to make monetary payments and that they have essentially followed the letter and the law in the decisions that they have taken. Now, that is not strictly true because if you go back to 2005, the Treasury issued a statement which has been updated since on several occasions, but the original statement was referring to what they call grace and favour payments, which enabled a State department or government department to make payments outside of the Public Finance Management Act provisions, up to 100,000 Rand on consultation with the accounting officer of that institution. And where payments of more than 100,000 Rand were contemplated, they would need to get legislative approval, either from the provincial government or the national Parliament to get those payments approved. So there was nothing stopping Minister Tau to ask Parliament for an amendment or for a grace and favour payment to these people. And I think the fact that the NLC hasn't pursued this route just is indicative of the fact that they have not really delved into all the possible reparative measures that they could have offered to these poor people.Toby Chance (05:09.184)And what I think is also evident is that the whole issue around whistleblowers has yet to be properly grasped by government. We go back to ….Commission, which, as you remember, was investigating whistleblowers at SARS.… And that resulted in, no monetary payments. Now, I do understand that the Minister of Justice is contemplating introducing an amendment to the Protective Disclosures Act. and certainly under pressure from my colleague, Glynis Breytenbach, who has also introduced a Whistleblower's Bill. And what we're expecting now is that there is going to be a significant shift in government thinking towards how whistleblowers are handled, how they're protected, how their families are protected, how they're compensated, and all the other things that whistleblowers have been pleading for for many, many years now.Chris Steyn (06:02.371)Toby, please recap some of the suffering of these whistleblowers, the worst cases that you can think of.Toby Chance (06:11.362)Well, I don't want to mention any names because they have all signed Non-Disclosure Agreements with the NLC. But several of them have been in contact with me. They have, as I said, they've been financially ruined. Their families have abandoned them. They're living in caravans. They're close to suicide. They've lost their jobs. They can't get jobs. Their lives have been completely ruined. You've got to remember that these people risk everything for exposingthe rot at the NLC, which has now resulted in the SIU identifying up to two billion Rands worth of illicit grants being made by the NLC over a period of about seven or eight years. And without these whistleblowers, those illicit grants would not have been exposed. Now, the other thing about the reparative process is that it excludes any non-employee. In other words, many of the whistleblowers were actually NGOs that were promised funds but never received the funds and some of those NGOs have had to close down. And what the NLC has now promised is that the grant making process will account for those and presumably make some form of compensation through the grant making process, but that hasn't been explained in detail. So I do think that the NLC has got a lot to answer for, and it's going to be sitting at the desk of the new chairperson, whoever that happens to be, when he or she takes over in the first quarter of next year, we hope.Chris Steyn (07:41.763)Now, despite all these exposes, what is happening with corruption at the commission, at the Lottery Commission?Toby Chance (07:52.738)Yes, exactly. unfortunately, it is a repetitive story that we hear over and over again that there's no accountability from those who are implicated in these crimes. And meanwhile, we have, you know, the former chairman of the NLC…. who is now taking the President to court. He's challenging the president's decision to institute the SIU investigation because he claims that the National Lottery is not a state institution. In other words, it doesn't receive any funds from the State, which is correct. But it is a regulated State institution in terms of the law. But the fact that he is now, you know, trying to wiggle out of the case, you know, he himself took tens of millions of rands for his own personal benefit. And there are other cases, but most of the miscreants were actually executives or members of the board, or senior members of management of the NLC, and not a single one of them has yet been presented with a set of yellow overalls.Chris Steyn (08:58.115)On to the lottery license, the awarding of the latest license, what are the developments with regards to the legal actions?Toby Chance (09:08.588)Well, there are two interesting developments. The first is that the urgent application by Ithuba to have the Lotto decision renewed, reviewed, was dismissed at the end of November. That was an urgent application, but the review still stays. So the court date hasn't been set yet. What essentially is happening is that Ithuba as the current Lotto operator, didn't win a renewal of its license. And it's now challenging Sizekhaya Holdings based on a number of claims, which include lack of funds to put the Lottery in place, the lack of expertise and a other things. So we have to see what happens there. The other thing is that a company called Social Pro, Durban based company, made claims that it was a core...contracted service provider in the Lotto application which enabled Sizekhaya and Goldrush to the Goldrush consortium to win the Lotto license last June. And now it appears that they have been excluded from the deal. So Sizekhaya Holdings is proceeding with its plans to implement the Lotto without Social Pro’s involvement.And if you look at the answers the Minister Tau gave for why he awarded the license to Sizekhaya Holdings, one of the reasons given was the extremely professional marketing plan that was included in the application. And that plan appears to have been developed by Social Pro. And I've seen a letter which Social Pro wrote to the commissioner, the end of November…explaining in a letter that they had received from Cliffe Dekker Todd, which was the lawyer to Sizekhaya Holdings, that they had, that Sizekhaya have no intention of signing a contract agreement with Social Pro. So that seems to be a categorical proof that whatever agreement that Social Pro had made with Sizekhaya Holdings has now been voided. And that appears to be a problem on a prima facie basis because the decision that Sizekhaya received the license was based upon…Toby Chance (11:29.654)…obviously the expertise amongst other things that it was able to present in its bid. And that certainly seems to have been based to a certain extent on the contribution from Social Pro. So, yeah, 2026 is starting with a lot of unresolved questions. And I think the pressure is now on the NLC and the Minister to come clean on a matter of urgency, as a matter of urgency. And we also expect Sizekhaya to do likewise.Chris Steyn (11:56.931)Any other developments that you want to highlight Toby?Toby Chance (12:03.436)Well, yeah, I mean, the year is just kicking off. I think with the Lotto, the point that I referred to earlier, which was that the Portfolio Committee has made its recommendation to the Minister for three candidates to be considered. I won't go into the details now, but there are three candidates that have been recommended to the Minister for him to consider as appointing as the new NLC Chairperson.Bear in mind that the Professor has only served three of his five-year term, so he is retiring early, but he has agreed to stand in, or at least to stay on until the new Chairperson is appointed. So he will be, or she will be, occupying a hot seat, no doubt about that. And I'm sure that the Committee is going to be very keen to see whoever takes on that role in Parliament soon and put forward these questions and demand answers as soon as possible.Chris Steyn (13:03.255)Thank you. That was Toby Chance, the Democratic Alliance Spokesperson on Trade, Industry and Competition speaking to BizNews. And I'm Chris Steyn.

Toby Chance - More horror for Lottery corruption whistleblowers

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