According to a Special Tribunal judgment delivered on 13 July 2026, the Mshandukani Foundation received a R4 million National Lotteries Commission grant in 2019 intended for installing boreholes at rural Eastern Cape schools and clinics, but Special Investigating Unit probes revealed the boreholes had actually been constructed three years earlier in 2016.
Fraudulent Borehole Grant Diverted to Personal Accounts
The Mshandukani Foundation, a registered non-profit organisation, applied for the funding in February 2019. Foundation chairperson Pretty Shandukani stated in the application that the project would benefit 8,015 vulnerable people and create 15 part-time jobs. However, the Special Tribunal found that most of the funds were diverted to private companies and personal bank accounts belonging to members of the foundation.
Bank statements from Preldon Construction showed that the company received R3.6 million from the foundation after the National Lotteries Commission deposited the R4 million grant into the foundation’s account, which held just R6,000 on 20 March 2019. From those funds, R500,000 was transferred to Iron Bridge, a company owned and controlled by Rebotile Malomane, the wife of former National Lotteries Commission Chief Operating Officer Phillemon Letwaba. Tribunal judge Brian Mashile noted that Letwaba signed off on the grant.
Did You Know? The Special Investigating Unit discovered that the names of two employees from Mshandukani Holdings—a geologist intern and a receptionist—had been listed as members of the Mshandukani Foundation without their knowledge or consent.
Evidence From School Principals and Chris Hani Department of Education
Pretty Shandukani submitted a final report to the National Lotteries Commission on 5 November 2019 claiming the borehole project was complete. Affidavits submitted by five school principals to the tribunal disproved this claim. The acting district director of the Chris Hani Department of Education also confirmed that the department received reports from relevant schools showing the boreholes were drilled back in 2016 by Mshandukani Holdings, a company owned by Mashudu Shandukani and his wife, Pretty.
Judge Mashile stated that neither the foundation respondents nor Letwaba, Ironbridge, and Malomane provided any account of how the grant funds were utilized. No vouchers, bank statements, or contracts with subcontractors were furnished to the tribunal. Consequently, the tribunal set aside the grant award as invalid and void, ordering the foundation, Pretty Shandukani, Takalani Israel Mulandana, Thambatshira Maria Khameli, and Preldon Construction to jointly and severally repay the R4 million with 10.75% annual interest.
Inside the Pro-Active Funding Quality Assurance Committee
The grant was approved on 8 March 2019 by the National Lotteries Commission Pro-Active Funding Quality Assurance Committee, which was motivated by Marubini Ramatsekisa, then manager of grant funding projects. Just 11 days elapsed between committee approval and the funds landing in the foundation’s account. According to an affidavit by Special Investigating Unit Chief Forensic Auditor Humbulani Gideon Funyufunya, the committee was effectively controlled by Ramatsekisa and Letwaba, turning the adjudication process into a rubber stamp.
The committee was established under policy changes introduced by previous National Lotteries Commission leadership, including former Commissioner Thabang Mampane, former board member William Huma, and former board chairperson Alfred Nevhutanda. These changes excluded the minister-appointed distributing agencies from adjudicating proactively funded projects, effectively removing a statutory independence safeguard.
Broader Implications and Potential Next Steps
This judgment follows another recent Special Tribunal ruling involving the Mshandukani Foundation and a dodgy R25 million Olympic Games send-off in 2016 that never took place. In that matter, funds were distributed to a network of companies linked to Letwaba and former legal head Tsietsi Maselwa. Judge Mashile noted that the Special Investigating Unit has referred three additional matters involving the same parties to the tribunal.
Frequently Asked Questions
What was the R4 million lottery grant supposed to fund?
According to the foundation’s application, the grant was meant to fund a community development project to install boreholes providing clean water to rural schools and clinics in the Eastern Cape, benefiting 8,015 vulnerable people.
Who received the diverted grant funds?
The Special Tribunal found that funds were diverted to private companies and personal bank accounts, including Preldon Construction, Mshandukani Holdings, personal accounts of Ms Shandukani, and a R500,000 payment to Iron Bridge, a company owned by Rebotile Malomane.
What did the Special Tribunal order in its 13 July 2026 judgment?
The tribunal declared the grant award and agreement invalid and void, pierced the foundation’s corporate veil, and ordered the Mshandukani Foundation, Pretty Shandukani, Takalani Israel Mulandana, Thambatshira Maria Khameli, and Preldon Construction to jointly and severally repay the R4 million plus 10.75% annual interest.
What measures do you think can best prevent the abuse of proactive funding committees in public institutions?
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