The Special Investigating Unit (SIU) welcomes the landmark judgment delivered by the Special Tribunal, which has declared the awarding of grant funding to the Samaritan Initiative NPO (R16.5 million) and Reagile NPC (R4.658 million) unlawful and invalid. The Tribunal further found former NLC board member, Adv. William Elias Huma, his affiliated entities, and the beneficiary organisations caused the NLC to suffer damages in the amount of R21,158,118.00, citing egregious misconduct, negligence, dishonesty, and violations of fiduciary duties. The Respondents are ordered to repay in full R 21,158.118.00. The SIU has already commenced the process to execute the order and recover the full amount from the Respondents. The process is ongoing.
This is the first judgment that sets aside grant funding in the NLC investigation. The SIU has currently filed 18 NLC review applications to set aside grants. The total value of the funds involved in these review and preservation applications amounts presently to R 320 790 150.79. More review applications can be expected.
In this judgment, the Special Tribunal ruled that the 2019 NLC decision to award R16.5 million to the Samaritan Initiative NPO, a hijacked entity controlled by Huma’s relatives, was reviewed and set aside. The funds were allocated for community upliftment projects, including a chicken farming initiative for the residents of Marikana, North West. The SIU investigation found that the funds were misappropriated by Silverlite Trading (Pty) Ltd, which Adv. Huma later took control as the sole director. The farm is now in a dilapidated state and has never benefited the community of Marikana.
The 2020 grant of R4.658 million to Reagile NPC, directed by Huma’s wife and nephew, was also overturned. No tangible community benefits were delivered.
Protecting the public interest and assets through prevention measures and systemic investigations to eradicate fraud, maladministration, and corruption.
The Tribunal found that Huma, a former NLC board member, abused his position to funnel funds to entities linked to his family. His conduct was deemed “egregious, negligent, and dishonest”, causing the NLC to suffer losses of R21,158,118.00. Huma failed to disclose conflicts of interest, contravening the Lotteries Act and his fiduciary duties.
In order to ensure there is cash available to recover the full amount lost by the NLC, the SIU, through the Special Tribunal, preserved an amount of R10 million, which are the proceeds of a sale of Adv. Huma’s Waterkloof property, which amount is now executable. Furthermore, Huma and the implicated entities were ordered to pay legal costs on an attorney-client scale, including fees for Senior Counsel.
Quoting Navi Pillay, UN High Commissioner for Human Rights, Judge M Victor stated in the judgment:
“Corruption kills. The money stolen through corruption every year is enough to feed the world’s hungry 80 times over.”
Furthermore, Judge Victor states that “The conduct of Adv Huma, the Samaritan Initiative and Reagile has been reprehensible. There is no explanation or utterance from any one of them explaining the loss of money to the state. In particular, Adv Huma’s conduct in these proceedings should also be taken into account. He is a non-practising advocate of the High Court; he is legally trained, and as such, he would have been aware of his fiduciary duties to the Board. He must have been aware that his conduct was contrary to the prescripts of the Constitution. His pleaded defences were bald, obtuse and unmeritorious. His refusal to deal with simple denials to issues which called for an answer cannot be condoned.”
As part of the ongoing NLC investigations, the SIU preserved the following assets belonging to Huma and linked to NLC funds:
- Farm Zwartkoppies 296 in the North West
- Boutique Hotel located in Rustenburg, North West. This preservation is linked to another NLC investigation.
As part of implementing the order, the SIU will conduct auctions for the properties in question. The proceeds generated from these auctions will be directed back to the NLC to support projects aimed at uplifting communities, rather than benefiting individuals or their close associates.
The SIU was authorised by President Cyril Ramaphosa in terms of Proclamation R32 of 2020 to investigate allegations of corruption and maladministration in the affairs of NLC and the conduct of NLC officials and to recover any financial losses suffered by the State.
The order of the Special Tribunal is part of the implementation of the SIU investigation outcomes and consequence management to recover financial losses suffered by State institutions because of corruption, maladministration or malpractice. The order forms part of a broader investigation into corruption involving NLC grants intended for community development projects.
The SIU is empowered to institute a civil action in the High Court or a Special Tribunal to correct any wrongdoing uncovered during investigations caused by corruption, fraud, or maladministration. In line with the Special Investigating Units and Special Tribunals Act 74 of 1996, the SIU refers any evidence pointing to criminal conduct it uncovers to the National Prosecuting Authority (NPA) for further action.
Enquiries:
Kaizer Kganyago
Spokesperson: Special Investigating Unit
082 306 8888
KKganyago@siu.org.za