The battle over the running of the country’s national lottery turned ugly this week, with incumbent operator Uthingo accusing Trade and Industry Minister Mandisi Mpahlwa of ignoring proper procedures and political bias in awarding the licence to the Gidani consortium.
In October last year, Mpahlwa announced that Gidani would replace Uthingo as the lottery operator when the latter’s seven-year contract expires in April.
Mpahlwa’s decision to award Gidani the licence has been marked by controversy from the start, with the shady past of Gidani’s foreign partner, Intralot, surfacing at the same time as it emerged that high-profile individuals with connections to the ANC were shareholders.
The lottery Act prohibits the award of the lucrative licence if it is found that a political party or political office bearer has any direct interest in the consortium.
Gidani’s key consortium participants include ANC national committee members Cyril Ramaphosa and Max Sisulu, and Chris Nissen, the former leader of the ANC in the Western Cape. Other shareholders include Independent Electoral Commission chairperson Brigalia Bam.
Uthingo is challenging Mpahlwa’s decision to award Gidani the licence in the Pretoria High Court. In its heads of argument submitted to the court this week, Uthingo charged that Mpahlwa had turned a blind eye to the fact that ANC politicians were shareholders in Gidani.
‘The minister in his answering affidavit states that he was given a list of key individuals by the board, which he discussed with the [National Lottery] board … The board also confirmed that not all shareholders in Gidani or persons with a direct financial interest in Gidani were described in the documents placed before the board … The board relied instead upon the undertaking sought and provided by Gidani that it was compliant with Section 13.
‘We draw attention to the fact that this undertaking was sought on September 19 2006 and was given on September 26 2006, which was long after the adjudication of the bids by the board, the negotiation between the board and Gidani had been concluded and the minister had approved the licence to be granted to Gidani,†argued Uthingo.
Uthingo also questioned the minister’s decision to accept the lottery board’s assertion that Gidani had been given security clearance by the National Intelligence Agency (NIA).
‘The minister had regard only to the information relayed to him by the board that Gidani’s completed probity declaration had been submitted to the NIA for its investigation and that the NIA had given its approval of Gidani … The minister made no other inquiries but relied entirely on this report made to him by the board.
‘Contrary to what is stated by the minister in his answering affidavit, there is no evidence of the NIA having conducted a probity investigation into Intralot or of his having been told this by the board.
‘The minister did not inquire after the conclusion reached by the NIA, and neither did he question the NIA or challenge any aspect of its report.â€
In a joint reponse with the National Lottery Board, Mpahlwa said Uthingo’s challenge had no locus standi to obtain the relief it seeks as it was ineli-gible to win the licence to conduct the national lottery because of Education Minister Naledi Pandor’s involvement in Uthingo. Pandor, through the Black Management Forum Investment, is a shareholder in Uthingo.
Countering Uthingo’s argument that Gidani’s licence should be disqualified because of Sisulu’s involvement, Mpahlwa argued that Sisulu was just an ordinary national executive committee member not an ANC office bearer.
Investigative magazine noseweek reported in October that Intralot, owned by controversial Greek tycoon Socrates Kokkalis, was being investigated for rigging the Greek national lottery and using betting games for money laundering.
Pretoria High Court Judge Willie Seriti reserved judgement to review Gidani’s licence.