Sizekhaya Holdings 'pipped the others to the post', says Parks Tau

Minister of Trade, Industry and Competition, Parks Tau, has publicly defended the ongoing controversy surrounding the award of the highly anticipated fourth national lottery licence to Sizekhaya Holdings.

Tau was legally obligated to disclose his reasons for selecting the company in an affidavit, in response to two court challenges requesting a review of the award.

Tau cited the consortium's well-balanced bid, impressive technology partners, and high projected revenue as the reasons for its selection.

He also commended Sizekhaya's plans to rejuvenate the suite of current lottery games and its broader marketing plans and spend.

Tau's affidavit, filed in the Gauteng High Court in Pretoria, also reveals that Sizekhaya Holdings "pipped the others to the post" due to its impressive bid.

The bids by Giya Games, Lekalinga, and Umbelelo were ranked the lowest, while those by Bosela, Ithuba Lottery, Ringeta, Sizekhaya, and Wina Njalo were neck and neck,” Tau wrote in the affidavit.

He highlighted Sizekhaya’s "strong technology partners" and "high revenue projections" as key factors influencing the decision.

The decision has been marred by controversy, with allegations of political interference and connections between Sizekhaya's shareholders, the ANC and Deputy President Paul Mashatile.

Tau has been accused of not adequately addressing concerns about Mashatile's alleged connections to Sizekhaya Holdings.

In the affidavit, Tau explained why he launched an investigation into the involvement of politicians, including Mashatile, in the tender awarding process.

Mashatile's sister-in-law, Khutso Bogatsu, reportedly has shares in the company, sparking concerns about potential conflicts of interest.

In response to these allegations, Tau said: “I have instructed the National Lotteries Commission (NLC) to investigate the alleged connections."

Tau revealed his decision to override his advisory panels, setting aside Ringeta's bid due to its affiliation with the Batho Batho Trust, a known ANC donor.

Ringeta had initially been favored by both the bid evaluation and adjudication committees, but was later flagged by a quality assurance committee (QAC) appointed by Tau.

“My decision was delayed because I was not convinced that the processes and outcomes were correct… This prompted speculation and even accusations that I was trying to favour one or other applicants. Nothing could be further from the truth. I refused to simply rubber stamp recommendations,” Tau said.

The QAC's findings showed that Dr. Sibongiseni Dhlomo, an ANC MP, served as a trustee of the Batho Batho Trust.

This made him an "office bearer," which is prohibited by both the Lotteries Act and the Request for Proposals (RFP) terms.

Tau received legal counsel confirming Dhlomo's direct financial interest through the trust's 70% shareholding in Ringeta.

The awarding of the contract to Sizekhaya Holdings has been met with court challenges from losing bidders, including Lekalinga and Ithuba Lottery.

Tau and other respondents will have to file answering affidavits before trial dates are set. 

The DA has criticised Tau for relying on the NLC to investigate, given its failure to flag potential conflicts of interest in the bidding process.

“The DA will continue to seek answers on this clearly flawed process through our PAIA application and by ensuring the Minister accounts to Parliament.

“It is extremely concerning that the NLC evaluation and adjudication committees both failed to flag the glaring conflict of interest of their top candidate for the award of the lotto licence, Ringeta…the conflict of interest in awarding one of the state’s largest tenders to a bidder part-owned by an ANC funding vehicle with a sitting ANC MP on its board of trustees is patently obvious,” DA Spokesperson on Trade, Industry and Competition, Toby Chance said.