File picture: Tyrone Siu

 

Cape Town - An explosive letter from the Trade and Industry department to Parliament has lifted the lid on alleged graft and financial mismanagement at the Gambling Board.

Trade and Industry Minister Rob Davies suspended the entire board last month for alleged corruption, intimidation and bullying of staff, theft of evidence, running up an overdraft on its bank account, failing to prevent fruitless and wasteful expenditure, and illegally appointing as a consultant a member of the board whose term had expired, the letter shows.

The reasons for the board’s suspension were finally provided on Friday to the chairwoman of the trade and industry oversight committee, Joan Fubbs, after she had set this as the deadline.

Director-general in the department Lionel October, responding on behalf of Davies, who was abroad, said the suspension had been “precautionary” pending a forensic probe into allegations contained in the auditor-general’s report on the board.

These included the running up of an overdraft without the permission of the finance minister, as required, and the failure to prevent irregular, fruitless and wasteful expenditure and contravention of the National Gambling Act by allowing members of the board whose term had expired to continue in their roles.

October said Davies had also received claims from a whistleblower that the chairwoman, Linda de Vries, and deputy chairwoman, Nana Magomola, were also members and executive director, respectively, of the National Responsible Gambling Foundation, but had never disclosed this to the minister, as required.

Other allegations by the whistleblower included that there had been non-disclosure or failure to audit the trust fund, apparent corrupt activities relating to the National Central Electronic Monitoring Systems, intimidation, bullying, and conducting of a witch-hunt and theft of evidence.

Another letter to Fubbs, from the two administrators appointed by Davies after the suspension of the board, outlined further problems.

The board was committed to a 9-year lease for 1 800m2 of office space at a cost of R58.4 million, despite having just 16 staff and already occupying premises in the trade and industry building at a cost of R23.2 million over 15 years, with still six years of this contract to run.

This was a major contributor to the loss of R4 million that the board incurred in 2013-14 – a repeat of the previous year, when the deficit stood at R4.8 million.

Its liabilities exceeded its current assets by R8.1 million, its annual report showed.

The administrators said the board was using its current budget to pay off debt from the previous year.

The board was able to devote just 5 percent of its budget to its core function, monitoring compliance with gambling legislation.

The board blew R1.47 million on a trip for its staff to attend a conference in Norway..

DA trade and industry spokesoman Dean McPherson said the opposition party would push for criminal charges to be brought against any board members found to have acted unlawfully.

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Political Bureau