With just three weeks to go before the expiry of Uthingo’s contract as the national lottery operator, the key contenders are gearing up for further legal battles over the R40-million-a-year business.
Igwija, a consortium led by businesswoman Danisa Boloyi, is to take the National Lottery Board to court to force it to provide documentation showing how Gidani was chosen as the preferred bidder.
This follows this week’s Pretoria High Court judgement overturning Trade and Industry Minister Mandisi Mpahlwa’s decision to award the Gidani consortium the licence.
And Gidani’s acting CEO Bongani Khumalo said this week that his consortium was considering appealing against the judgement.
Igwija, which came third in the bidding, said it would capitalise on the shortfalls of both Uthingo and Gidani to press its claim.
Muzi Makhaya, one of Igwija’s founders, said the judgement was a major boost for his consortium.
‘Our case will be based on what is now a precedent. The National Lottery Act is very clear that, if you are found to have wrong people, your application will be rejected.
‘The minister said Uthingo was wrong to have Education Minister Naledi Pandor as one of its shareholders and that Gidani was wrong to have ANC politicians as shareholders. This automatically qualifies us as the preferred bidder.â€
Mpahlwa’s department said he would make a pronouncement once he had studied the judgement.
In a ruling which came as a great embarrassment to the minister — who has consistently claimed that the licensing process was above board — Judge William Seriti ordered him to review his decision.
Seriti criticised Mpahlwa and the lottery board for failing to investigate the shareholders in both Uthingo and Gidani.
Key Gidani participants include ANC national committee members Cyril Ramaphosa, Max Sisulu and Chris Nissen, the ANC’s former Western Cape leader. Independent Electoral Commission chairperson Brigalia Bam also has an interest, while Pandor had, but has now sold, shares in Uthingo.
The government’s licensing preference has been marked by controversy almost from the start, with the shady past of Gidani’s foreign partner, Intralot, also surfacing.
The Mail & Guardian also understands that Mpahlwa is contemplating a financial settlement with both Uthingo and Gidani.
It is not clear yet how this will be managed. A complicating factor is that the National Lottery Act prevents Mphahlwa from extending Uthingo’s contract until the review process is complete.
Gidani’s Khumalo said in an interview this week that Gidani would challenge any decision to extend Uthingo’s contract. It could only be extended if Uthingo applied a year in advance, Khumalo pointed out.
He said his consortium was seriously considering appealing against the judgement and that it might take over as the new operator on April 1, pending the outcome of the appeal.
Gidani has already spent over R400-million in setting up lottery infrastructure.
Khumalo said Gidani did not regret the fact that it had ANC politicians among its shareholders.
‘We continue to believe that there is nobody in the company that shouldn’t be there. We have always argued that none of our shareholders is a political office-bearer. It is a requirement that we took into account,†he said.
Khumalo said the judgement had come as a serious ‘undeserved†setback for the company. Gidani would not have applied for a licence knowing it was in the wrong.
Key figures
Gidani
- Max Sisulu is chairperson of the ANC national executive committee (NEC) on economic transformation.
- Cyril Ramaphosa’s Shanduka Group is the local partner of Greek lottery technology company Intralot, which is a major shareholder in Gidani. Ramaphosa has said that his involvement in Gidani was through Mabida Development Trust, a non-profit organisation. Mabida has a 26% stake in Intralot.
- Chris Nissen, a member of the ANC NEC, is involved through Vanani Capital, which has a stake in Gidani.
- Brigalia Bam, the chairperson of the Independent Electoral Commission, is also a shareholder in Gidani.
Uthingo
Education Minister Naledi Pandor was a shareholder in Uthingo during the bidding process. Pandor, who held a stake in Gidani through the Black Management Investment Forum, only sold her shares last month after concerns were raised about her involvement.
Igwija
Igwija is led by businesswoman Danisa Baloyi.