DA clarifies statement objecting to the nomination of Dr Muthuhadini Madzivhandila as NLC Chair 

20 April 2021

On 12 March 2021, the DA published a statement objecting to the nomination of Dr Muthuhadini Madzivhandila to be appointed as chair of the National Lotteries Commission (“NLC”).

In the statement, the DA said that Dr Madzivhandila “was the director of a non-profit company which received R900 000 from the NLC and that it needed to be determined whether or not he had declared this prior to his appointment to the board.”

The DA’s statement was based on a report prepared by the Organisation Undoing Tax Abuse (“OUTA”), dated 8 March 2021. According to the OUTA report:
“Dr Madzivhandila served as a director of Enterprise South Africa (Tshwane) from 6 May 2004, a non-profit company that received grant funding from the NLC totaling R900,000.00. It is unclear whether this had been declared by Dr Madzivhandila upon appointment to the NLC board. It is advised that the PC ascertain the details of this transaction and consider a possible conflict of interest.”

Dr Madzivhandila has since informed the DA that:

He was a director of Enterprise South Africa at the time that it was allocated R900,000 by the National Lotteries Board in 2006.

The National Lotteries Board allocated R900,000 to Enterprise South Africa but that the R900,000 was never paid over because it was a conditional grant allocation and Enterprise SA did not meet the conditions imposed by the National Lotteries Board.

The DA has not been able to determine whether this is factually correct.  However, even if it is correct, it does not resolve the problem. The DA’s concern has always been the potential conflict of interest between Dr Madzivhandila’s position as a director of Enterprise SA and his appointment to the Board and/or application as a candidate for chairperson of the National Lotteries Commission.

The conflict of interest and the question whether it was declared is not affected by the question of whether Enterprise SA ever actually received money or whether it was merely allocated a grant by the National Lotteries Board. As a result, Dr Madzivhandila’s statement that Enterprise SA did not receive the R900,000 but was merely allocated it by the NLC does not resolve the concern.

Nonetheless, the DA hereby updates its statement of 12 March 2021 as follows:

Dr Madzivhandila was a director of Enterprise SA from November 2003 until it was liquidated in 2006.

During the 2006 financial year, at the time that Dr Madzivhandila was a director of Enterprise SA, Enterprise SA was allocated a grant by the National Lotteries Commission.

This constitutes a potential conflict of interest that ought to have been fully investigated before he was appointed to the Board and/or nominated to serve as chair of the National Lotteries Commission.

The DA persists in contending that any applicant to become a member of the board of the National Lotteries Commission, and more especially any applicant to lead that Board, who has been a director of a company that was awarded a grant by the National Lotteries Commission, whether that grant was ultimately paid out or not, ought to disclose those facts prior to their appointment to the board so that any perception of a conflict of interest can be fully investigated.

Issued by Mat Cuthbert, DA Shadow Deputy Minister of Trade, Industry and Competition, 20 April 2021