Judge unfreezes bank accounts of KZN company
- A KwaZulu-Natal company has been investigated by the Special Investigating Unit in relation to transactions involving Lottery grants.
- On 4 August, First National Bank (FNB) at the behest of the Lottery froze the bank accounts of 05 ZZET Enterprises, a company owned by Nosipho Zanela Zuma.
- Zuma took FNB and the Lottery to court to unfreeze her accounts.
- The court found in Zuma's favour after Lottery lawyers informed Zuma's lawyers late at night that they were withdrawing opposition to the case. The judge was unimpressed that the Lottery lawyers did not pitch up.
The bank accounts of a KwaZulu-Natal company, which were put on hold at the behest of the National Lotteries Commission (NLC), have been unfrozen.
This after the NLC turned tail in an urgent application brought by 05 ZZET Enterprises (Pty) Ltd and its owner, Nosipho Zanela Zuma, and failed to file a promised opposing affidavit.
In a late night message to Zuma's lawyers, the NLC said it would no longer be opposing the application.
This left the Special Investigating Unit (SIU) -- which on the back of the NLC's opposition was seeking to intervene in the application -- without a voice in court.
Advocate Lee Reddy, for the SIU, told Durban High Court Acting Judge Mbuzeni Mathenjwa that she had only been informed of the NLC's new stance in the matter that very morning.
"That the second respondent (the NLC), is a no-show has left me in a very difficult position," she said.
Reddy had prepared a 200-page affidavit, detailing the SIU's investigation into the company, which could not be handed in at court or considered by Judge Mathenjwa. In the face of no opposition, the judge granted an order, unfreezing the company's bank accounts.
In her urgent application, which first came before Judge Mathenjwa on Wednesday, 16 August, she cited First National Bank as the first respondent, and the NLC as the second respondent.
She said seven bank accounts, some business and other investments, with a collective balance of about R2.6-million, had been unilaterally frozen by the bank on 4 August.
A bank official had told her there was no court order authorising this but it had been done at the request of the NLC.
Zuma said she ran three businesses, and employed about 35 full-time and temporary staff.
She was unable to pay salaries and wages and other business costs.
The bank said it would not oppose the application.
Advocate Emmanuel Mohlabi, for the NLC, handed up an order from the Special Tribunal, which indicated that the accounts had to be preserved pending the outcome of the application.
But advocate Saleem Khan, for Zuma, pointed out that the order was "just a piece of paper" and it was not dated.
Mohlabi, asked for time to file an opposing affidavit, submitting that if Judge Mathenjwa granted the order, the money in the accounts would be dissipated, that the money was from the "misuse of public funds".
He indicated that an affidavit was busy being prepared and it would be finalised by midnight.
The judge rolled the matter over until the next day (Thursday, 17 August) in order for the NLC and the SIU to file affidavits.
But on Thursday morning, there was no sign of the NLC's lawyers, and Khan said there was now no opposition to the application.
This meant the SIU had no legal grounds to intervene and the order must be granted.
Judge Mathenjwa agreed.
He said the conduct of the NLC's lawyers was "unbecoming" after he had granted them an indulgence. He noted that they had not come to court to formally withdraw their opposition.
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He ordered the NLC to pay the costs of the application.
GroundUp had earlier learned that the SIU had begun investigating 05 ZZET in early 2022 after receiving a tip-off from the Financial Intelligence Centre about suspected money laundering of the NLC grant money through its FNB account.
The Financial Intelligence Centre had picked up the suspicious transactions after FNB reported them in terms of the Financial Intelligence Centre Act.
When the SIU analysed the company's bank account, it discovered a large number of payments from non-profit early childhood development centres, crèches, pre-schools and football clubs, which had all received Lottery grants. The payments, made between mid-2019 and early 2022, came from dozens of non-profits and amounted to over R30-million.
