The Special Tribunal has granted the Special Investigating Unit (SIU) an order that allows them to freeze R16 million worth of assets belonging to a man believed to be the mastermind behind a sophisticated Unemployment Insurance Fund (UIF) fraud scheme.
The order follows an SIU investigation that revealed that Lubelo Hlomuka Holdings, trading as SA Scrum Assembly – a company directed by Nhlakanipho Mngomezulu – unlawfully received about R16 362 525.29 in Temporary Employer/Employee Relief Scheme (Ters) funds from the UIF, administered by the labour department.
Ters is a government initiative meant to assist employers in paying salaries to employees affected by the Covid-19 lockdown restrictions during the pandemic.
Shopping spree
SIU spokesperson Selby Makgotho said between 2020 and 2022, Mngomezulu went on a shopping spree, buying vehicles in cash shortly after receiving the funds.
“In addition, he and his company acquired four immovable properties, primarily in Pietermaritzburg, KwaZulu-Natal (KZN), using the misappropriated funds,” Makgotho said in a statement on Friday.
The immovable assets affected include two properties in Glyndale, four apartments in Pietermaritzburg and one property in Zeekoe Vallei.
Furthermore, a Volkswagen VN 750 Caravelle, a Kia K2700, a Toyota Avanza and a Ford Ranger are also affected.
Makgotho said bank accounts linked to Mngomezulu and SA Scrum Assembly have also been frozen.
Ghost workers used to siphon funds
The SIU’s investigation found that the Ters funds were misappropriated through ghost employees.
They were diverted from their intended purpose of supporting workers affected by the lockdown.
“Analysis of bank records confirmed that SA Scrum Assembly received 45 payments from the UIF, with no evidence that employee salaries were paid,” Makgotho said.
“Funds were instead channelled through other accounts in a pattern that appears to be a money-laundering scheme.”
The investigation also revealed that Mngomezulu personally benefited from the scheme, receiving more than R5 million in multiple payments derived from the Ters funds.
SIU moves to preserve assets
Makgotho said in November 2025, the SIU approached the Special Tribunal, seeking preservation orders over the identified properties, vehicles, and bank accounts.
The aim was to ultimately forfeit the assets to the state.
“The President of the Special Tribunal, Judge Margaret Victor, granted an interim order prohibiting Mngomezulu from selling, disposing of, transferring, leasing, or otherwise dealing with the identified assets pending the finalisation of the matter,” Makgotho said.
He added that President Cyril Ramaphosa authorised the SIU to investigate allegations made regarding the UIF.
“The SIU investigated Ters payments to persons who were not entitled to receive such payments; submitted false, irregular, invalid or defective applications to the UIF, including the causes of such maladministration.”
‘Correct any wrongdoing’
Makgotho said the investigating unit remains committed to holding those who unlawfully benefit from public funds accountable and to ensuring that monies intended for workers during the Covid-19 pandemic are recovered.
He said the unit will refer any evidence of criminal conduct uncovered during its investigation to the National Prosecuting Authority for further action.
“The SIU is also authorised to initiate civil proceedings in the High Court or a Special Tribunal in its name to correct any wrongdoing uncovered during its investigation and to recover financial losses suffered by the state, including funds paid for services not rendered.”
