Tau vows to investigate after Mashatile’s sister-in-law linked to multi-billion lotto operator licence

Trade, Industry and Competition Minister Parks Tau assured MPs that allegations of conflicts of interest linked to the newly awarded lotto operator licence will be investigated.

Last month, Tau announced Sizekhaya Holdings as the winner of the multi-billion-rand tender to run the national lottery and sports pool.

The company will take over on 1 June 2026 under an eight-year licence.

Questions have since arisen over alleged links between Sizekhaya and Deputy President Paul Mashatile’s sister-in-law.

The appointment came as Ithuba Holdings’ licence expired on 31 May.

Although a 12-month temporary extension was granted by Tau, a court ruling reduced it to five months.

Tau defends lotto operator licence tender process

Appearing before Parliament’s Portfolio Committee on Trade, Industry and Competition, Tau provided background on the process and challenges faced.

The minister stated that when he became minister in July, the third national lottery licence had already been extended for two years.

He described the tender process as highly competitive, calling it a “massive operation” that is “technically and legally complex”.

“As the honourable members would be aware, the second and third licences were subjected to substantial litigation. The fourth licence is proving to be the same.”

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“The context is one in which there is a persistent threat that a party will seize upon any issue to advance its own interest.”

“Their challenges are frequently cloaked in the need to protect constitutional rights, but in reality, the ultimate objection is to offer the process to be reviewed in their favour,” Tau said.

He emphasised that the Lotteries Act sets out clear criteria for the successful bidder.

The company must also be run by individuals who are not politically affiliated or public-office bearers, Tau highlighted.

“We have had to ensure that we are meticulous in considering the bids and their connection with political parties,” the minister said.

Watch the meeting below:

Tau acknowledged the delay in announcing the new operator but insisted he could not rush the decision.

“I fulfilled my duty by applying my mind properly to arrive at what I believe is the best result. No doubt others will agree with my decision.”

Tau stated that any identified issues, including potential conflicts of interest, were addressed after MPs raised concerns.

He confirmed his opposition to a legal challenge brought by one of the bidders, Lekalinga.

“My full written reasons for my decision will be filed with [the] high court in the next few weeks.”

Why Sizekhaya won lotto operator licence

NLC Commissioner Jodi Scholtz elaborated on the bidding process, which began in August 2023 and concluded with the licence announcement on 28 May.

She confirmed that investigations were conducted into KwaZulu-Natal (KZN) businessmen Moses Tembe and Sandile Zungu, both members of the Sizekhaya consortium with ties to the ANC and MK party.

Scholtz explained that after legal consultation, neither individual was considered an office-bearer, and therefore no “direct financial interest” to political parties was found.

“Consequently, there is no violation of section 13(2)(b)(iv) of the Lotteries Act,” she said.

Both men were part of Mashatile’s delegation to France in May.

READ MORE: Ithuba poised to run Lottery for next year — despite legal concerns

Scholtz told the committee that the reasons for Sizekhaya’s appointment will be outlined in court, pointing out it was a closely contested bid among five companies.

Sizekhaya, according to the NLC commissioner, won the contract because it has the capacity and infrastructure.

The company had proposed a five-month transition plan, but this was later extended to nine months in alignment with the 12-month temporary licence period.

She said a temporary licence was necessary to ensure a smooth transition, given delays in the tender process.

“This was the most viable option.”

Temporary licence

Scholtz explained that although all eight bidders were eligible to apply for the temporary licence, only Ithuba Lottery (separate from Ithuba Holdings) submitted an application.

Furthermore, litigation by one of the bidders, Wina Njalo, led to the licence period being shortened to five months, prompting Ithuba Lottery to claim it would incur a R51 million loss.

As a result, the licence was awarded to Ithuba Holdings based on the NLC’s recommendation.

“Ithuba Holdings has the necessary know-how, infrastructure, retailer network and technology partner, as well as financial resources to operate temporarily.”

READ MORE: Lotto: Retailers complain as Ithuba claims ‘seamless transition’

Scholtz said Wina Njalo has not challenged the decision.

“There is currently no threat to interrupt the temporary licence by way of a court challenge.”

In addition, she confirmed that all documents and bid applications will be handed over to the court in Lekalinga’s review application.

“The minister’s process and reasons will be a matter of court record and will be shared with the committee once that has been filed in court.”

MPs raise concerns over political links

MPs later questioned Tau and the NLC officials.

Democratic Alliance (DA) MP Roger Chance cited the Lotteries Act, emphasising “indirect financial interest”, and asked the minister whether he was aware that Mashatile’s sister-in-law, Khumo Bogatsu, is a shareholder of Sizekhaya.

 “Had you been aware of the deputy president’s family interest, would you still have made the appointment?” the DA MP asked.

Chance referenced media reports revealing that Bogatsu and Tembe co-own Bellamont Gaming, a shareholder in Sizekhaya.

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In response, Tau pledged to investigate the allegations.

“It would be irresponsible of us to ignore what has been raised in the public domain by investigative journalists and the media,” he said.

The minister stated that the NLC and his department would obtain legal advice to determine whether the matter involves a conflict of interest or political affiliation.

“To the extent that these matters have been raised, we will follow up on them and make a determination about the veracity of the allegations and their impact on the adjudication process.”