SIU Freezes Pension of Ex-Lottery Official in R6 Million Fraud Scandal

The Special Investigating Unit (SIU) has secured a court interdict to freeze the pension benefits of Sanele Dlamini, a former senior official at the National Lotteries Commission (NLC), amid ongoing legal proceedings related to the alleged misappropriation of public funds.

This development forms part of the SIU’s civil recovery strategy as it intensifies efforts to recover approximately R6 million in grants illegally channelled through the NLC to the Motheo Sports and Entertainment Foundation—a project that exists in name only.

Allegations of Fraud and Fabrication

The SIU investigation uncovered a damning paper trail indicating that Dlamini played a pivotal role in facilitating fraudulent transactions involving NLC funds earmarked for community development.

In particular, the SIU found that:

• A sports complex project, which was to be funded by the grant, was never initiated.

• Progress reports and financial statements submitted to the NLC to secure and justify the funds were falsified.

• Dlamini co-signed these fake documents, despite never verifying the authenticity of the project or the existence of the site.

The result was an unlawful payment of R3 million, part of the total R6 million disbursed to the Motheo Sports and Entertainment Foundation—an organisation now under heavy scrutiny for its role in enabling fraudulent financial flows.

Pension Preservation to Safeguard Public Funds

Recognising the potential risk of Dlamini liquidating his pension assets before the case’s resolution, the SIU applied for and obtained a court-ordered preservation order. The goal is to prevent a “hollow judgment”, a situation where the accused cannot meet the financial liabilities imposed by the court due to asset depletion.

In its official statement, the SIU noted:

“The interdict bars Mr. Dlamini from accessing his pension benefits until the SIU’s main case, a civil recovery action tied to the misallocation of R6 million in NLC grant funds, is concluded.”

The ruling compels Liberty’s Corporate Selection Umbrella Retirement Fund—the fourth respondent in the case—to assess and disclose the current value of Dlamini’s pension within 60 days, ensuring full transparency and accountability.

Legal and Governance Implications

This legal move is a significant demonstration of the SIU’s intensified approach to holding public officials accountable for financial misconduct, especially concerning funds meant to uplift disadvantaged communities.

The case underscores several systemic failures:

• Lack of internal controls within the NLC grant disbursement process

• Collusion between officials and external entities

• Negligence in verifying project implementation before fund releases

The SIU’s investigation is also expected to delve deeper into possible accomplices within the NLC and the beneficiaries of the R6 million, as it builds a broader picture of grant abuse patterns within the Commission.

Broader Anti-Corruption Efforts

This case forms part of the SIU's broader mandate under Proclamation R32 of 2020, issued by President Cyril Ramaphosa, which authorized investigations into maladministration, corruption, and improper conduct at the NLC. Under this proclamation, multiple NLC grants have been flagged for irregularities, including those purportedly allocated for schools, community halls, and rural upliftment projects.

To date, the SIU has referred numerous matters for prosecution, disciplinary action, and civil litigation—efforts aimed at restoring integrity to public institutions and ensuring that development funds benefit the intended communities.

What Happens Next?

The SIU’s civil case against Sanele Dlamini will proceed in court, where it will seek to recover the misappropriated funds through the seizure of assets and garnishment of withheld pension benefits. If successful, the order will establish a vital precedent for future cases involving pension preservation for public servants implicated in fraud.

While Dlamini is yet to respond publicly to the allegations, legal experts believe the SIU's success in freezing his pension strengthens its case and increases the likelihood of meaningful recovery.

The SIU continues to urge members of the public and whistleblowers to come forward with any information that can support its investigations.