The Editor

The Mercury

Durban

24 October 2007

Dear Sir,

The article in The Mercury of 24 October 2007 has reference.

Sithengi Film & Television Market was awarded a grant of R11,1 million in 2003. In 2004 and 2005, they received R9,1 million of the grant. The outstanding amount (R1,98 million) has not been paid because the National Lotteries Board found discrepancies in the Progress Report they submitted.

The Board has subsequently written to Sithengi advising that the report was unsatisfactory as a result of irregularities and discrepancies picked up in the report, which the Board cannot elaborate on now as a result of ongoing litigation.

Sithengi issued summons on the Board and lodged a high court application that was opposed by the National Lotteries Board. The hearing was set for 31 August 2007. However, Sithengi requested that the matter be postponed because they had not previously had access to the report they submitted. The Board also finds in coincidental that the CEO and CFO of Sithengi resigned when the discrepancies had been brought to the attention of the organisation.

The Board then contacted Sithengi on 21 September 2007 to establish if they were still proceeding with their court application. There has been no response to the Board’s correspondence yet.

The Board is also concerned that the National Film & Video Foundation is reported to have stated that they will be taking legal action against the National Lotteries Board, since they are not the beneficiary of the impending NLDTF grant. The NFVF is not a party to the agreement and will have no locus standi in the matter.

The National Lotteries Board, as custodian of the National Lottery Distribution Trust Fund is responsible for ensuring that all funds from the NLDTF have been utilised for the intended purposes and has authority to hold back and litigate should it find discrepancies.

Sershan T Naidoo

NATIONAL LOTTERIES BOARD

Manager: Beneficiary and Player Relations; and Media Liaison