Paul Kirk Members of the KwaZulu-Natal Gambling Board have been moonlighting as casino bosses, working for the same casino bid companies to which they have awarded lucrative gaming licences. One member is a full director of a winning casino bid. The other is a director of a company closely linked to the largest casino operation to be granted a licence in the province.
The revelation could set the entire bid process in KwaZulu-Natal back years as losing companies start litigation. The process of awarding casino licences in the province has been fraught with delays and dogged with allegations of corruption and interference in the process by the provincial government and the Inkatha Freedom Party.
In late 1998 the original gambling board was poised to make an announcement on the casino winners when the Premier – Lionel Mtshali – unexpectedly stepped in to stop the process and swell the board’s numbers with new appointees. At the centre of the storm is 46-year-old Londiwe Mthembu, who is both a member of the KwaZulu-Natal Gambling Board and a shareholder in the Akani casino bid outside Pietermaritzburg. Although Mthembu’s name does not appear on the letterhead of the bid company, she owns 12,5% of Siyibumba Investments (Pty) Ltd. Siyibumba is a component of the casino bid. These details have been confirmed by the Registrar of Companies in Pretoria, although the registrar’s office has no record of her ID number, only her date of birth, while all the other directors of the concern have their ID numbers on record. The Akani bid is to be situated at Scottsville racecourse. It is worth R203-million and is expected to create about 3 000 jobs. Mthembu’s fellow gambling board member, Jabulani Sibeko, is a director of Madadeni Beer Wholesalers, which is managed by South African Breweries – the ultimate controlling body behind Tsogo Sun. Tsogo Sun’s Miami Beach Casino bid won a licence to build a R1,3-billion casino on the Durban beachfront. Sibeko’s company was teetering on the brink of bankruptcy until he was bailed out by South African Breweries.
The CEO and chair of the gambling board, Allan Doorosamy, has confirmed the revelation, but dismissed it as “no big deal”. Doorosamy claimed the supposed conflict of interests is “not a big, sexy issue at all”, but declined to comment further on the grounds the board was facing legal action on the Durban beachfront bid and that replies to questions could jeopardise their case. The Provincial Gazette of KwaZulu-Natal suggests both bids could be disqualified because of the apparent conflicts of interest. Section 28 (1) reads: “… a person, including a juristic person, shall be disqualified from being granted a licence and from retaining or holding any licence granted if he or she or any person acting as his or her principal is (i) a member of the board, a member of its staff or an inspector during the preceding 12 months”. The regulations further read: “A company, close corporation, partnership, trust or any other corporate body shall also be disqualified from being granted a licence and from retaining or holding any licence already granted if any person who is disqualified to hold a licence has any financial or pecuniary interest in such company, close corporation, partnership, trust or other corporate body, is a beneficiary under such trust and receives or is entitled to any of the proceeds or assets of the trust.” Another section reads: “A person shall be disqualified from being appointed to the board, or remaining on the board, by reason that – (f) he or she is a member of the board of directors of any gambling or fund-raising activity, has a controlling interest or any financial or other interest in any gambling or fund-raising activity or acquires a direct or indirect financial interest in any gambling or fund raising activity or is employed by any person, company, organisation or other body, whether corporate or unincorporated which has any interest contemplated in this paragraph.” Doorosamy said although he was the chair of the gambling board, he had not appointed Mthembu to the board. That was instead the preserve of Mtshali. Neither of the two gambling board members could be traced. Sibeko had switched off his cellphone, while Mthembu could not be contacted. Both should, according to the Act, never have been appointed. Doorosamy is currently involved in a legal battle with Russell Stevens, a losing bidder for the Durban beachfront casino licence. Stevens has laid charges of malicious prosecution and defamation against Doorosamy after he alleged Stevens had threatened him when he never won a licence. Losing casino bidders have expressed outrage at the disclosure – but refused to go on the record as all are taking legal opinion on the matter.