The Special Investigating Unit (SIU) has successfully obtained a court order to freeze assets valued at R16 million, believed to be acquired through a complex fraud scheme involving Unemployment Insurance Fund (UIF) Temporary Employer/Employee Relief Scheme (Ters) funds. The investigation targets Nhlakanipho Mngomezulu, who allegedly directed a company that unlawfully received substantial Ters payments.
The Special Investigating Unit ( SIU ) has achieved a significant victory in its fight against public fund misappropriation, securing an order from the Special Tribunal that freezes assets worth R16 million. This action targets Nhlakanipho Mngomezulu, who is believed to be the central figure behind a meticulously planned fraud operation that illicitly siphoned off Temporary Employer/Employee Relief Scheme (Ters) funds.
The SIU's extensive investigation revealed that Lubelo Hlomuka Holdings, operating under the name SA Scrum Assembly and directed by Mngomezulu, unlawfully obtained approximately R16,362,525.29 in Ters payments. The Ters initiative was a critical government program designed to provide financial assistance to employers, enabling them to continue paying salaries to their employees impacted by the severe disruptions caused by Covid-19 lockdown restrictions during the pandemic. This misappropriation of funds intended for struggling workers has now led to the freezing of substantial assets acquired by Mngomezulu. Selby Makgotho, the spokesperson for the SIU, detailed the extent of Mngomezulu's alleged spending spree following the receipt of these illicit funds. Between the years 2020 and 2022, Mngomezulu reportedly engaged in significant purchases, notably acquiring several vehicles with cash shortly after the funds were received. Beyond vehicles, the investigation uncovered that Mngomezulu and his company also purchased four immovable properties, primarily located in Pietermaritzburg, KwaZulu-Natal. These acquisitions were made using the very funds that were meant to support employees during a time of national crisis. The vehicles specifically identified as being affected by the asset freeze order include a Volkswagen VN 750 Caravelle, a Kia K2700, a Toyota Avanza, and a Ford Ranger. A thorough analysis of banking records further corroborated the SIU's findings, confirming that SA Scrum Assembly received 45 payments from the UIF. Crucially, there was no evidence to suggest that these funds were utilized for their intended purpose of paying employee salaries. Instead, the analysis indicated a pattern of money laundering, with the funds being channeled through various other accounts, raising serious concerns about the ultimate destination of the taxpayer money. The investigation also revealed the direct personal benefit Mngomezulu accrued from this fraudulent scheme. He personally received over R5 million through multiple payments, all originating from the misappropriated Ters funds. In response to these alarming discoveries, the SIU initiated legal proceedings in November 2025, formally approaching the Special Tribunal to request preservation orders for the identified properties, vehicles, and bank accounts. The President of the Special Tribunal, Judge Margaret Victor, subsequently granted an interim order, effectively prohibiting Mngomezulu from selling, transferring, leasing, or otherwise dealing with these specified assets while the finalization of the legal proceedings is pending. This action by the SIU was undertaken with the authorization of President Cyril Ramaphosa, who had mandated the unit to investigate allegations concerning the UIF. The scope of the SIU's mandate included scrutinizing Ters payments made to individuals who were not legitimately entitled to receive them, as well as identifying instances of false, irregular, invalid, or defective applications submitted to the UIF, and determining the root causes of such maladministration. The SIU remains steadfast in its commitment to ensuring accountability for individuals who unlawfully benefit from public funds and to safeguarding monies earmarked for workers during challenging economic periods. Furthermore, the SIU will diligently refer any evidence of criminal conduct uncovered during its investigations to the National Prosecuting Authority for appropriate legal action. The unit is also empowered to initiate civil proceedings in either the High Court or a Special Tribunal, acting in its own name, to rectify any wrongdoing identified and to recover any financial losses incurred by the state, including funds paid for services that were never rendered
SIU UIF Ters Funds Asset Freeze Fraud
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