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EFF Demands Mashatile Account for Lottery Deal Under Oath
Johannesburg — The Economic Freedom Fighters (EFF) are escalating their challenge to the awarding of the national lottery licence, demanding that Deputy President Paul Mashatile give sworn testimony regarding his connection to the consortium that secured the lucrative contract, reportedly worth over R80 billion.
The EFF has formally applied to join the legal challenge initiated by losing bidders, a move that suggests they suspect Mashatile may have acted in a personal capacity, rather than an official one, in the awarding of the contract to Sizekhaya.
One of Sizekhaya's directors is Mashatile’s sister-in-law, advocate Khumo Bogatsu. Sizekhaya has consistently denied that Mashatile played any role in the May award of the licence by Parks Tau, the Minister of Trade, Industry & Competition. They maintain that their success was solely due to the strength of their bid.
Tau himself has stated that he awarded the contract to Sizekhaya because it presented a "well-balanced bid" and that, in his view, it did not contravene section 13 (2)(b)(iv) of the Lotteries Act. "In my view, Sizekhaya pipped the others to the post… It has satisfied the requirements in section 13 of the Lotteries Act. It has an impressive technology partner. Its financial plans and models are sound. Its projected revenue is suitably ambitious, yet credible," Tau said. He added that "Based on its projected revenue and percentage contribution to the NLDTF [National Lottery Distribution Trust Fund], Sizekhaya’s contributions to the NLDTF are likely to be the highest.”
The EFF's challenge effectively seeks to redefine what constitutes a "direct interest" as defined in the Lotteries Act. In court papers, the EFF argues that the grey area in the wording of the national lottery tender has opened the door for politicians to abuse the process through family members.
In its intervening application, deposed by party secretary-general Marshall Dlamini, the EFF questions section 13(2)(b)(iv) of the Lotteries Act, which states that “no political party in the Republic or political office-bearer has any direct financial interest in the applicant or a shareholder of the applicant”. The EFF argues that this section is fundamentally flawed.
According to the EFF affidavit, “The deputy president’s family connections to Sizekhaya are central to the factual matrix demonstrating how section 13(2)(b)(iv)’s limitation to ‘direct’ interests permits political office bearers’ families to hold unlimited indirect interests in lottery operations.”
The EFF argues that Mashatile has a significant interest in the proceedings, stating, “For these reasons, the deputy president arguably has a direct and substantial interest in these proceedings. He may be entitled to be heard on both the factual allegations concerning his family and the legal implications of the relief sought.”
The party also stated, “The EFF emphasises that these facts are not raised to impugn the deputy president’s personal integrity but to illustrate the statutory framework’s systematic failure… Even assuming the deputy president had no knowledge of his family’s involvement — which assumption we make without conceding — the statutory framework’s permission of such arrangements demonstrates its constitutional inadequacy.”
The EFF will argue that parliament recognised the corruption risks posed by indirect interests as far back as 2013. “No legitimate government purpose is advanced by prohibiting a political office-bearer from holding even a single share directly, while permitting their immediate family members to own a substantial stake in the lottery operating company,” the EFF states in court papers.
Notably, Tau has previously stated that he ruled out the bid evaluation committee and bid adjudication committee’s preferred bidder, Ringeta, due to the substantial interest of ANC funder Batho Batho in the company. Ringeta’s bid was also tainted by the participation of high-profile ANC MP Sibongiseni Dhlomo, a trustee of the Batho Batho Trust.
Sizekhaya and GoldRush, one of the largest shareholders in the consortium, have consistently denied allegations of cronyism or political patronage in the awarding of the contract.
Last month, the Pretoria high court dismissed an urgent application by Ithuba, one of the losing bidders, to interdict the awarding of the licence, finding that the matter was not urgent. The application to set aside the contract, in which the EFF seeks to be an intervening party, is scheduled to be heard next year in a high-stakes legal battle.
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