- Former National Lotteries Commission chief operations officer Phillemon Letwaba argues that the Special Tribunal lacks the authority to order the forfeiture of assets.
- The SIU obtained an interdict to stop the sale of Letwaba’s farm in Limpopo purchased for R4.7-million with money allegedly diverted from lottery grants.
- Letwaba’s challenge follows former NLC board chairperson Alfred Nevhutanda’s attempt to have the SIU investigation declared unlawful.
Former National Lotteries Commission (NLC) chief operations officer Phillemon Letwaba is challenging the constitutionality of the Special Tribunal’s power to order the freezing and forfeiture of assets deemed to be the proceeds of crime.
Letwaba’s legal challenge, which could stymie the work of the Special Tribunal, comes in the wake of a court challenge by former NLC board chairperson Alfred Nevhutanda to the proclamation signed by President Cyril Ramaphosa authorising the Special Investigation Unit (SIU) to probe widespread corruption in the NLC.
Because they raise constitutional challenges, both matters are likely to take years to traverse the courts, and they will delay the forfeiture of millions of rands in assets, allegedly acquired through looting of lottery funds and currently being preserved.
Letwaba’s challenge has been set down to be heard by the Special Tribunal on 2 April. But Letwaba says the tribunal has no authority to hear his matter because it is not a “court of law”. Only “superior courts” have the right to pronounce on constitutional issues, he says.
However, tribunal Judge Margaret Victor had directed at a pre-trial conference that the challenge would be heard by the tribunal. Victor had also requested the Democratic Governance and Rights Unit, at the University of Cape Town’s faculty of law, to act as an amicus curiae (friend of the court).
In March 2024, the SIU obtained an interdict from the Special Tribunal to stop the sale of a Limpopo farm (owned by Mosokodi Business Trust), linked to Letwaba and his brother, Johannes.
According to the SIU, the farm was listed for sale for R7-million in 2023 and was under offer for R5-million.
The SIU said the funds used to purchase the farm came from the NLC, which were siphoned through two organisations.
One, Lulamisa Community Development Organisation NPA, applied for R85-million to host “the Commonwealth Games” in Durban. Lulamisa was given R80-million. Lulamisa, in turn made payments totalling R2.7-million to Iron Bridge Travelling Agency, which is owned by Phillemon Letwaba’s wife. In 2016, Iron Bridge transferred R1-million to conveyancing attorneys towards the purchase of the farm.
Similarly, money meant to be spent on drilling boreholes in five provinces was diverted through several entities, also ending up in Iron Bridge and other entities’ bank accounts. About R1.3-million was paid to the same attorneys.
The farm was eventually bought for just more than R4.7-million.
Constitutional challenge
Letwaba is opposing the SIU’s application for a final forfeiture order. He wants the forfeiture application to be struck from the roll or postponed until his constitutional challenges are heard and decided on by a “competent court”.
He attacks the constitutional validity of the SIU and Special Tribunal Acts and seeks an order that “all property subject to interdicts, preservation and forfeiture orders obtained by the SIU from the Special Tribunal be released pending confirmation of the order of unconstitutionality by the Constitutional Court”.
Letwaba, in his affidavit, says the Minister of Justice and Constitutional Development was not authorised by the legislation to issue a regulation allowing the tribunal to order forfeitures.
“I am advised that the Tribunal is not a court of law and not clothed with the authority to declare property forfeited to the state.
“While the SIU Act affords the Tribunal President authority to regulate process and procedure, it does not confer the power to make substantive law or to extend the rights afforded by the SIU Act.
“Seeing that the SIU Act does not confer upon the Special Tribunal the authority to entertain an application for forfeiture and to grant relief of that nature, the present application is not competent.”
Further, Letwaba said the Constitution prohibited the arbitrary deprivation of property, and constitutional rights issues must be heard by superior courts.
“I would have thus sought for the forfeiture application to be stayed, pending the final determination of the constitutional challenge in the appropriate forum,” he said.
“I have also given instructions to my attorney of record to bring an application to join the tribunal president and the minister as parties to these proceedings,” Letwaba said.
“I will thus seek an order declaring that the Special Tribunal is not authorised to entertain or pronounce a matter challenging its jurisdiction and/or a constitutional validity of legislation.
“In the alternative, if the tribunal found it is authorised to hear the application, I will seek an order declaring the rules to be declared to be invalid and unconstitutional and that the tribunal does not have the power to issue forfeiture orders,” Letwaba said.
He would also seek that the forfeiture application be dismissed with costs.
The Nevhutanda matter is still pending before the Pretoria High Court.
He wants the proclamation authorising the SIU investigation to be deemed unlawful and set aside, because, he says, the NLC is not a state entity and did not spend public money.
But the SIU, in opposing his application, says Nevhutanda is just trying to avoid accountability and “retain the proceeds of his corrupt conduct”, including a R27-million mansion.
The SIU says the NLC, the distribution fund and the distribution agency were not private entities with private funders but were established by the state, regulated by the Lotteries Act and the board was accountable to Parliament.
- This article was originally published by GroundUp. It is republished by TechFinancials under a Creative Commons Attribution-NoDerivatives 4.0 International Licence. Read the original article
