Litigious Lottery spends millions of rands on lawyers
The National Lotteries Commission has ongoing legal battles against Ebrahim Patel, former employees, and others trying to hold it accountable
The Ministry of Trade and Industry has criticised the National Lottery Commission’s expenditure on legal fees. Archive photo: Ashraf Hendricks
- An answer to a question in Parliament reveals that the National Lotteries Commission (NLC) has spent tens of millions of rands on lawyer’s fees since 2016.
- It’s legal opponents include the Minister of Trade and Industry Ebrahim Patel and former employees. It has spent a fortune trying to stop information about its grants being published.
- The Ministry of Trade and Industry has warned the NLC about spending money on lawyers to protect employees implicated in wrongdoing.
The NLC has been involved in numerous costly and questionable legal battles since 2016. It paid nearly R1 million to lawyers to try to stop information about its grant recipients being published. It has already spent R720,000 in an ongoing legal battle with Minister of Trade and Industry Ebrahim Patel. It frequently appears to be in disputes with its former employees, having spent nearly R6 million in legal fees on just one case of alleged unfair dismissal.
The NLC is in a battle to force Patel to hand over a copy of a dossier compiled by the independent forensic investigators he appointed to probe corruption.
The docket, with the details of a probe into multimillion rand grants to four non-profit organisations, several of which are linked to suspended NLC Chief Operating Officer Philemon Letwaba or members of his family, was handed to the Hawks last year to investigate.
This expenditure was revealed in a written answer in Parliament by Patel to questions posed by Mathew Cuthbert, the DA shadow minister for Trade and Industry.
Patel made it clear that he was not satisfied with some of the information in the response supplied by NLC commissioner Thabang Mampane.
“I am advised by my officials that there are apparent discrepancies between the reply furnished herein and information supplied to the department by the NLC and will seek to have these explained and if it requires a revised reply, this will be submitted to Parliament,” Patel said.
The NLC had previously sent a lawyer’s letter to Patel on 11 November 2020, threatening legal action if he did not hand over the docket that was handed to the Hawks to investigate. It gave Patel 24 hours to comply, failing which “our client shall have no alternative but to approach the High court for, inter alia, a mandatory injunction in terms of which you are directed to furnish our client with that report”.
After Patel received the letter, DTI Director-General Lionel October wrote to Mampane warning her that NLC funds should not be used to litigate against the minister.
“We view the appointment of attorneys and expenses incurred in litigation against the Minister as the Executive Authority assigned by law to oversee the Commission as not in line with the principles of efficient and effective use of financial resources, as it is not to the protection of the NLC’s interest, but that of individuals who might be implicated in wrongdoing,” October wrote.
October asked Mampane to provide a copy of the NLC board minutes and resolution where a decision was taken to institute legal proceedings against the Minister.
Cuthbert said in a statement: “This latest action by the rogue NLC board, is yet another indication that there is full-blown civil war going on between Patel and themselves.”
Almost R1 million spent to keep grant details secret
Mampane’s response also revealed that the NLC has spent R985,000 on unsuccessful legal attempts to stop the publication of details of Lottery grant recipients, including how much they received.
But these fees may be even higher than has been disclosed. In a matter involving a dodgy pop-up organisation called United Civil Society in Action (UCSA) which sued GroundUp, the NLC’s legal costs were not disclosed.
UCSA withdrew its matter against GroundUp and agreed to pay the news agency’s legal costs (which it has not done yet). It is unclear whether it will also have to pay the NLC’s costs.
The parliamentary reply also listed costs for litigation involving two other organisations, non-profits Zakheni Ma Afrika and the African Liberty Movement (ALM), which also went to court to stop the publication of details of grants. Although the NLC is listed as one of the respondents in all these matters, all three organisations put forward arguments similar to those the NLC has used to claim that it would be illegal for details of grants to be made public.
Zakheni, which sued Patel and the NLC, withdrew after the minister opposed the action. Also, by the time the matter was due to go to court the information it wanted kept secret was already public.
In the ALM matter, in which Patel and Parliament’s Trade and Industry Portfolio Committee were cited as respondents, the minister won the case and was awarded costs. The court found that ALM had no locus standi to bring the action on behalf of an unnamed applicant.
Another case in which the NLC has incurred hefty legal fees involves a legal challenge by Media Monitoring Africa (MMA) and the South African Editor’s Forum (SANEF) to have the regulation the NLC is relying on to withhold grant information declared unconstitutional. A legal opinion by the Chief Parliamentary Legal Adviser had earlier found that the regulation was unconstitutional.
The State Attorney has also said that Patel does not “intend litigating” the MMA and SANEF matter.
The NLC has spent millions of rands litigating against former staff members, including over R5 million in a case against one person. (We will publish a separate article on this.)
Other matters where the NLC incurred legal costs include litigation involving the Lottery operating licence.
In a reply to another parliamentary question posed by Cuthbert, Patel revealed that the NLC had paid almost R76 million in legal fees to lawyers between 2016 and 2020. Yet, the NLC revealed in its reply in Parliament that it employs eight people in its own legal department.
A further R36.5 million was paid to audit firm SkX to investigate corruption, but its report has never been made public.
An earlier investigation into NLC corruption by law firm Ndobela Lamola Inc has also never been made public. The firm received payments of just over R19 million from the NLC, although it is unclear how much of this was for the investigation. Justice Minister Ronald Lamola is a former partner at the firm. He resigned as a director a few months after he was appointed to the Cabinet in May 2019.
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