Loyiso Sidimba | Updated
National Lotteries Commission’s R9.59 Billion Investment Approval Records Under Scrutiny
The National Lotteries Commission (NLC) has revealed it lacks documentation confirming whether the Minister of Finance authorized investments exceeding R9.59 billion made over a span of four years in various financial institutions.
Special Investigating Unit Launches Probe into NLC Investments
The Special Investigating Unit (SIU) is currently examining these investments, which were executed between January 2014 and May 2017, to determine their legitimacy and compliance with regulatory requirements.
Breakdown of Investment Periods and Amounts
During the period from January 2014 to March 2015, the NLC allocated over R5.6 billion into financial assets. Subsequently, between June and November 2015, an additional R3.23 billion was invested. Further investments included R599 million from August 2016 to February 2017, and R137 million between April and May 2017.
Mandate and Investment Strategy of the NLC
The SIU’s investigation includes reviewing the NLC’s adherence to its investment policies. The NLC confirmed that these funds were placed in multiple financial institutions, guided by its internal investment strategy, reserve strategy, investment policy, and delegation of authority framework.
Legal Framework Governing NLC Investments
According to the Lotteries Act, the NLC is permitted to invest funds with the Public Investment Corporation (PIC). However, regarding investments in other financial entities, the NLC admits it does not have records verifying whether the Minister of Finance approved these transactions.
Ongoing Investigation and Documentation Requests
Last month, the SIU requested documentation related to these investments but has yet to receive any approval or authorization papers from the finance minister. The NLC has stated that all available investment documents have been submitted to the SIU and awaits the investigation’s outcome before taking further action.
Regulatory Provisions for Unallocated Funds
The Lotteries Act stipulates that any funds not immediately required for allocation may be invested with the PIC or other financial institutions approved by the Minister of Finance, with the option to withdraw when necessary. This provision ensures that surplus funds are managed prudently while remaining accessible.
National Treasury’s Position on Fund Management
The National Treasury emphasizes that the National Lotteries Act governs the handling of unspent or surplus funds by the NLC. It mandates that any unutilized monies must be returned to the National Lotteries Distribution Trust Fund (NLDTF). Section 25 of the Act explicitly authorizes investments of such funds with the PIC or approved financial institutions, subject to Treasury Regulations.
Ensuring Transparency and Accountability in Lottery Fund Investments
This framework is designed to maintain transparency and accountability in managing lottery funds, safeguarding public resources while enabling effective investment strategies. The ongoing SIU investigation aims to clarify compliance with these legal requirements and ensure proper governance.
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