Ithuba in battle to retain Lotto

Ithuba Holdings, holder of the National Lottery operator's licence, and Hosken Consolidated Investments (HCI) are set for a bitter face-off this week as their prolonged battle for control of the R8bn lotto contract enters the high court.

HCI approached the South Gauteng high court to hear the matter on an urgent basis over concerns on governance at Ithuba and its management company, Zamani Marketing and Management Consultants. But Ithuba CEO Charmaine Mabuza said the court bid was part of a continued attempt by HCI to take over the lotto licence, that it lost out in 2014.

HCI gave Ithuba a R325m loan in 2015 as it struggled to secure funds to execute operations after it won the licence.

Ithuba made a R400m repayment to HCI within a year of receiving the loan, thus clearing the interest also.

HCI won in arbitration after accusing Ithuba of breaching the funding agreement by settling the five-year loan earlier.

Yunus Shaik, a director at HCI, said: “You can’t, when you are suddenly irritated with your funder when he is trying to get you to comply with the agreement, say to him, 'Look, here's your money, I’m cancelling the agreement’.”

Shaik dismissed suggestions of a takeover, saying HCI was only trying to step in for “performance management”.

Mabuza refuted allegations of poor governance, saying: “HCI is not a shareholder. Ithuba has got a board with qualified CAs, competent representatives, and they have a different opinion.

HCI’s matter will appear before the high court on Tuesday.

The company is seeking an order to interdict a management fee payment from Ithuba to Zamani or have it reduced to 3% from 4.67%.