Toby Chance: Minister Tau caught unawares by Mashatile’s Lotto licence links

Trade and Industry Minister Parks Tau was “surprised” by the links of Deputy President Paul Mashatile to the new Lotto licensee appointed by him at the end of May. So says Toby Chance, the Democratic Alliance (DA) spokesperson on Trade, Industry and Competition, after the Minister was questioned today. “Minister Tau didn't appear to be aware of it, which raises serious questions of due diligence in the Lottery adjudication process.” Chance says there are lots of unanswered questions “and unfortunately, it's a classic case - yet again - of how State Capture and corruption works. It's a dubious connection between politicians, business people and public officials. which has led to the downfall of so many of our institutions.” Chance adds that the corruption charges laid against the Deputy President by the DA over a year ago are still pending. “And so I think that what Mr. Tau is able to uncover, if he does go ahead with this investigation into Sizekhaya's shareholding, could be the beginning of a slippery slope for the Deputy President.”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 (00:01.436)The Democratic Alliance is demanding transparency over Deputy President Paul Mashatile's Lotto connections. We get the latest from the party spokesperson on Trade, Industry and Competition. Welcome, Toby Chance. Toby Chance (00:18.616)Good afternoon, Chris. Chris Steyn (00:21.68)So what does Minister Parks Tau have to say? Toby Chance (00:27.136)He appeared to be surprised by the information that was revealed by AmaB yesterday. The investigative reporters revealed that a company which is an investor in Sizekhaya Holdings, which is the new Lotto licensee appointed by Minister Tau at the end of May, has an association through the sister-in-law of Deputy President Paul Mashatile. And that is a serious issue because it represents a conflict of interest with a political office bearer of a shareholder in the Lotto license hold - and as I said, Minister Tau didn't appear to be aware of it, which raises serious questions of due diligence in the Lottery adjudication process. Chris Steyn (01:18.098)So what checks and balances are there? Toby Chance (01:22.956)The checks and balances are that he would have to review his decision, essentially, the decision that was made at the end of May to appoint Sizekhaya Holdings, which would be an embarrassment, a significant embarrassment because the Minister and the National Lottery Commission have bent over backwards to explain the process that they've gone through, which started in January last year when the Bid Evaluation Committee started to look at all the bids; there were eight bids submitted. That process continued until September when the recommendation from the evaluation committee was sent to the adjudication committee, who then reported back to Minister Tau in December. And then Minister Tau appointed his own quality assurance committee, which then reported back in April this year on the 25th of April. At that stage, the committee recommended Sizekhaya Holdings and that announcement was made at end of May Essentially, we're talking almost 16 months, 17 months of supposed evaluation, supposed due diligence. If this information has not been made available by the bidders and has not been revealed by the adjudication process, then that's seriously calls into question what has been going on. And so Mr. Tau would then have to basically go back to the drawing board and institute an investigation. Chris Steyn (03:00.464)Now, how could they have missed this connection? Toby Chance (03:05.134)It's very difficult to say. What's interesting is that in the request for a proposal, the RFP that was published at the end of 2023, the RFP made it very clear in several paragraphs that assurances have to be made that there's no direct or indirect conflict of interest by any of the shareholders or members of the application team with political office bearers or political parties. Now, interestingly today in the committee, Minister Tau and the National Lottery Commission, their presentation only made reference to direct conflicts of interest, not indirect conflicts of interest. So it's possible that the adjudication process did not dig further than just the immediate shareholders of Sizekhaya Holdings and failed to go into the details about the shareholders. Just by the way, Sizekhaya Holdings was only registered six days before the bid adjudication process ended. And Bellamont Gaming was only registered a month before that. You know, the question also is arising as to is it sensible to appoint a company that is less than a few weeks old to run a 60 billion Rand operation? And, you know, these again are questions which Minister Tau has to answer. Chris Steyn (04:35.772)I was just going to ask you, so even on the basis of qualifications, there didn't seem to be much to go on. Toby Chance (04:45.038)Well, yes and no. They have a 50% shareholding in Sizekaya through Gold Rush. Gold Rush is an experienced gambling and betting company. So they relied on that relationship to tick that box. And there were other boxes that had to be ticked on BEE compliance, socio-economic contributions, localisation, those sorts of things. But if the fundamental issue of conflict of interest with political office bearers has not been ticked, then that is a problem. I think that the public demand answers and certainly the investigators at AmaB may need to be congratulated on uncovering this information. Chris Steyn (05:32.358)And wouldn't a sister-in-law almost qualify as a direct link. Toby Chance (05:38.478)Well, it's difficult to say actually, the conversation happened in the committee as to what constitutes an indirect or direct conflict of interest. I mean, is it a friendship? it a family relationship? is it a business associate? These are questions which are not actually spelled out directly. But I think that one of the things that the AmaB team have pointed out is that the Deputy President Paul Mashatile has had a history of essentially associations with businesses that he doesn't have a direct interest in himself but through family members and friends he is obtaining financial benefit - and you know he has not put himself through a lifestyle audit, and it's certainly the case that the lavish lifestyle that he he leads cannot be you know paid for out of a deputy president's salary. So you know The DA laid corruption charges against the Deputy President over a year ago. These are still pending. And I think that the public deserves to have answers. The ANC Integrity Commission apparently has investigated him and found no wrongdoing, but that isn't necessarily a foolproof process at all. And so I think that what Mr. Tau is able to uncover, if he does go ahead with this investigation into Sizekkaya's shareholding, could be the beginning of a slippery slope for the deputy president. Chris Steyn (07:10.066)Have you had any update on that investigation? Toby Chance (07:16.972)Not at all. I mean, we only heard this information this morning when we confronted Minister Tau. Chris Steyn (07:21.424)Now I'm talking about the charges you laid a year ago. Toby Chance (07:26.448)I see. Sorry. We haven't. It hasn't yet been enrolled in the court. No, it hasn't yet been enrolled in the court roll yet. Chris Steyn (07:37.916)Could you just recap those charges for us, please? Toby Chance (07:45.422)I can't give you the precise details, but what I can say is that the DA had information which we believe was sufficient to lay corruption charges against the Deputy President on the basis of, as I said, his association with dubious individuals, including Mr. Sodi, who, as you recall, has received multitudinous tenders from the government of various sorts, including the asbestos tender in the Free State, tenders from the Tshwane Municipality - and a close association the Deputy President has with him amongst other people, including his son-in-law who has a supposedly 37 million round house in Waterfall, which Mr. Mashatile lives in. We don't know where that money came from either to buy the house. So there are lots of unanswered questions and unfortunately it does go to the heart of, again, the State Capture issue using familial connections to lay your hands on valuable state assets to benefit your friends and family. Chris Steyn (08:50.714)And wasn't the businessman with him in Paris recently linked to this Lotto company? Toby Chance (08:59.086)Two businessmen actually, yes. The other shareholder of Bellamont Gaming, the other one being of course his sister-in-law, Khumo Bogatsu, her business partner, Moses Tembe, was with the Deputy President in Paris in May, as well as Sandile Zungu, who is a director of Sizekhaya Holdings. So between the three of them, it's a nice little triad which links, if you look at the AmaB article, there's a nice little diagram which shows the relationship between those people and the dotted lines between the different institutions, the different companies and the different individuals. And unfortunately, it's a classic case yet again of how State Capture and corruption works. It's a dubious connection between politicians, business people and public officials. which has led to the downfall of so many of our institutions. Chris Steyn (10:02.862)Indeed, thank you. was the Democratic Alliance's spokesperson on Trade, Industry and Competition, Toby Chance speaking to BizNews. Thank you, Toby, and I'm Chris Steyn for BizNews. Toby Chance (10:14.787)Thank you.

Toby Chance: Minister Tau caught unawares by Mashatile’s Lotto licence links

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