Key Takeaways
- The EFF is seeking to have Deputy President Paul Mashatile account under oath for his dealings with the consortium awarded the national lottery licence.
- The licence is valued at over R80bn and the EFF suspects Mashatile may have acted in his personal capacity in the awarding of the contract.
- The EFF is challenging the wording of the national lottery tender, arguing that it allows politicians to abuse the process through family members.
- The party is questioning section 13(2)(b)(iv) of the Lotteries Act, which prohibits political office-bearers from having a direct financial interest in the applicant or a shareholder of the applicant.
- The EFF argues that the section is flawed and permits political office-bearers’ families to hold unlimited indirect interests in lottery operations.
Introduction to the Controversy
The Economic Freedom Fighters (EFF) is seeking to have Deputy President Paul Mashatile account under oath for his dealings with the consortium awarded the national lottery licence. The licence, valued at over R80bn, was awarded to Sizekhaya, a consortium in which Mashatile’s sister-in-law, advocate Khumo Bogatsu, is a director. The EFF has formally applied to be joined as an intervening party in the legal challenge launched by some of the losing bidders, suggesting that it suspects Mashatile may have acted in his personal, rather than official, capacity in the awarding of the contract.
The EFF’s Challenge
The EFF is challenging the wording of the national lottery tender, arguing that it allows politicians to abuse the process through family members. The party is questioning section 13(2)(b)(iv) of the Lotteries Act, which prohibits political office-bearers from having a direct financial interest in the applicant or a shareholder of the applicant. The EFF argues that the section is flawed and permits political office-bearers’ families to hold unlimited indirect interests in lottery operations. The party’s secretary-general, Marshall Dlamini, has deposed an affidavit in which he questions the limitations of the section, stating that it "permits political office-bearers’ families to hold unlimited indirect interests in lottery operations".
The Minister’s Decision
The Minister of Trade, Industry and Competition, Parks Tau, ultimately awarded the tender to Sizekhaya, stating that it presented a "well-balanced bid" and did not contravene section 13(2)(b)(iv) of the Lotteries Act. Tau had previously ruled out the bid evaluation committee and bid adjudication committee’s preferred bidder, Ringeta, in which ANC funder Batho Batho had a substantial interest. Ringeta’s bid was tainted by the participation of high-profile ANC MP Sibongiseni Dhlomo, a trustee of the Batho Batho Trust. Sizekhaya has consistently denied that Mashatile played a role in its award of the licence, asserting that its success was solely due to the strength of its bid.
The EFF’s Argument
The EFF argues that the statutory framework is flawed and permits political office-bearers’ families to hold unlimited indirect interests in lottery operations. The party states that "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 also points out that parliament in 2013 recognised that indirect interests pose equivalent corruption risks. The party’s argument is that the current framework allows politicians to abuse the process through family members, and that this is unconstitutional.
The Court Case
The application to set aside the contract, in which the EFF seeks to be an intervening party, is set to be heard next year in a high-stakes case. The Pretoria high court last month dismissed an urgent application by one of the losing bidders, Ithuba, to interdict the awarding of the licence, with the court finding that the matter was not urgent. The EFF’s intervention in the case is likely to add a new layer of complexity to the proceedings, and may shed more light on the dealings between Mashatile and the consortium awarded the national lottery licence. The outcome of the case will have significant implications for the future of the national lottery and the role of politicians in the awarding of lucrative contracts.
