Massive battle for control of the Lotto

Ithuba and Hosken Consolidated Investments (HCI) are engaged in a legal battle over control of the National Lottery, City Press reports.

The lottery operation is the biggest tender in the country and is currently operated by Ithuba, which has been targeted by HCI for the early repayment of a R341-million loan advanced to it when it was first awarded the tender.

This loan had a 25% interest rate and strict repayment conditions, and it was subsequently found that Ithuba had no right to pay back the loan quicker than specified.

HCI has now demanded management and oversight of the operations, which would earn it 1% of all total lottery sales.

The companies are set to clash in the Johannesburg High Court this week, where HCI will ask that Ithuba be barred from paying its management consultants company, Zamani, the 4.67% of total sales it is currently giving it.

HCI argued that Zamani should only be paid 3% for its management services.

Compromised conduct

The National Lotteries Commission (NLC) has reportedly asked for intervention in the issue, arguing that if HCI were to succeed in its legal battle, this would comprise the lottery’s conduct in accordance with the Constitution.

Ithuba chief executive Charmaine Mabuza said that the relief sought by HCI would interfere with Ithuba’s rights to receive management services from Zamani.

“The relief sought would constitute a breach or repudiation by HCI of the management agreement since its conduct threatens to interfere with Ithuba’s rights under the agreement to receive management services from Zamani, and threatens to prevent Zamani from performing its obligations,” Mabuza said.

Ithuba has operated the Powerball and Lotto for years, although it had a rocky start when it first began managing the service.

The first draw that Ithuba presided over saw problems with machines around the country, with people unable to buy tickets well ahead of the draw date.

The company has been the official operator of the National Lottery since June 2015.

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Massive battle for control of the Lotto