The EFF wants deputy president Paul Mashatile to account under oath for his dealings with the consortium to whom the lucrative licence to operate the national lottery was awarded.
The licence is said to be to the value of more than R80bn.
The EFF challenge is effectively an attempt to redefine what constitutes direct interest, with the party arguing the grey area in the wording of the national lottery tender opened the door for politicians to abuse the process through family members.
The move by the EFF, which has formally applied to be joined as an intervening party in the legal challenge launched by some of the losing bidders, suggests it suspects Mashatile might have acted in his personal, rather than official, capacity in the awarding of the contract.
One of the directors of Sizekhaya, the consortium in question, is Mashatile’s sister-in-law, advocate Khumo Bogatsu.
Sizekhaya has consistently denied that Mashatile played a role in its May award of the licence by Parks Tau, minister of trade, industry & competition, asserting that its success was solely due to the strength of its bid.
The EFF, in its intervening application deposed by party secretary-general Marshall Dlamini, questions section 13(2)(b)(iv) of the Lotteries Act, which says that “no political party in the Republic or political office-bearer has any direct financial interest in the applicant or a shareholder of the applicant”.
The Red Berets say the section is flawed.
“The deputy president’s family connections to Sizekhaya are central to the factual matrix demonstrating how section 13(2)(b)(iv)’s limitation to ‘direct’ interests permits political office bearers’ families to hold unlimited indirect interests in lottery operations,” the EFF affidavit reads.
“For these reasons, the deputy president arguably has a direct and substantial interest in these proceedings. He may be entitled to be heard on both the factual allegations concerning his family and the legal implications of the relief sought.
“The EFF emphasises that these facts are not raised to impugn the deputy president’s personal integrity but to illustrate the statutory framework’s systematic failure.
“Even assuming the deputy president had no knowledge of his family’s involvement — which assumption we make without conceding — the statutory framework’s permission of such arrangements demonstrates its constitutional inadequacy.”
Sizekhaya, and one of the largest shareholders in the consortium, GoldRush, have consistently denied allegations they were awarded the contract due to cronyism or political patronage.
The Pretoria high court last month dismissed an urgent application by one of the losing bidders, Ithuba, to interdict the awarding of the licence, with the court finding the matter was not urgent.
The application to set aside the contract, in which the EFF seeks to be an intervening party, is set to be heard next year in a high-stakes case.
No legitimate government purpose is advanced by prohibiting a political office-bearer from holding even a single share directly, while permitting their immediate family members to own a substantial stake in the lottery operating company.
— Court papers
One of the arguments the EFF will put forward is that parliament in 2013 recognised that indirect interests pose equivalent corruption risks.
“No legitimate government purpose is advanced by prohibiting a political office-bearer from holding even a single share directly, while permitting their immediate family members to own a substantial stake in the lottery operating company,” it says in court papers.
Tau, who ultimately awards the tender by law, has already said he had ruled out the bid evaluation committee and bid adjudication committee’s preferred bidder, Ringeta, in which ANC funder Batho Batho had a substantial interest.
Ringeta’s bid was tainted by the participation of high-profile ANC MP Sibongiseni Dhlomo, a trustee of the Batho Batho Trust.
Tau, in his reasons for awarding the contract to Sizekhaya, said it was because it presented a “well-balanced bid” and that, according to him, its bid did not contravene section 13 (2)(b)(iv) of the Lotteries Act.
“In my view, Sizekhaya pipped the others to the post. It presented a well-balanced bid. It has satisfied the requirements in section 13 of the Lotteries Act. It has an impressive technology partner. Its financial plans and models are sound. Its projected revenue is suitably ambitious yet credible,” Tau said.
“Based on its projected revenue and percentage contribution to the NLDTF [National Lottery Distribution Trust Fund], Sizekhaya’s contributions to the NLDTF are likely to be the highest.”
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