Kwaito legend fails to stop seizure of his luxury guesthouse acquired with lottery funds

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Kwaito legend and businessman Arthur Mafokate has failed to stop seizure of his luxury guesthouse La Villa Rosa in Midrand acquired with funds meant for poor youth.

On Tuesday, the Pretoria high court dismissed, with costs his application to have the property he bought from funds received from the National Lotteries Commission (NLC) released from a preservation order.

The Asset Forfeiture Unit (AFU) of the National Prosecuting Authority (NPA) obtained an order to preserve the property belonging to Mafokate on December 21, 2022.

This followed investigations conducted by the Special Investigating Unit (SIU) into the National Lotteries Commission (NLC) which revealed that his company, South African Arts and Development Organisation (SAADA) was granted R9.3 million to assist unemployed youth in the poor and rural areas of the country, to impact skills in music, business video, film production dance and overall business of radio.

According to Lumka Mahanjana, NPA regional spokesperson, SAADA only used R1.8 million of those funds on the project, and used the remaining funds of R7.5 million to purchase a guest house.

“Mafokate argued, in court, that he was entitled to the R7.5 million as his businesses delivered the services as required by the NLC and that he had committed no offences. However, the NPA argued that although some kind of services were rendered, it was at most R1.8 million.

“The remainder of the funds was used to purchase the guest house, which was not the purpose of the grant allocation. The funds used to purchase the guest house was thus stolen from the NLC as it was not used for the allocated project.

“The court agreed with the NPA that it was against the terms and conditions of the grant for SAADA to carry over its obligations to any other organisation, and that SAADA should have also returned any unused funds to the NLC,” she said.

Mahanjana stated that the court also found that Mafokate could give no reasonable explanation on how he could afford to purchase the guest house if it was not for NLC funds, particularly as his business accounts contained negligible balances when the grant was received from the NLC.

She continued; “Therefore, the court dismissed, with costs, the application of Arthur Mafokate to have the guest house released from the preservation order.”

Meanwhile, the Director of Public Prosecutions, Advocate Sibongile Mzinyathi, expressed his gratefulness for the investigation conducted by the SIU on this matter, which he emphasised that it illustrates the effectiveness of law enforcement agencies working together to eradicate corruption.

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“We also welcome the judgment as it demonstrates the NPA’s continuous fight against corruption at the highest level.

“This judgment paves the way for the AFU to enroll the matter for the final forfeiture of the guest house and all the other luxury properties worth millions of Rand purchased with stolen NLC funds.

“Should the forfeiture application be successful, the guest house will be sold at a public auction and the proceeds returned to the NLC,” he added.