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Free State Tourism CEO Dichabe Grilled on Fraud and Corruption Findings

by Central News Reporter
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The CEO of the Free State Gambling, Liquor, and Tourism Authority (FSGLTA), Kennilworth "Kenny" Dichabe, a known ally of Ace Magashule, finds himself entangled in a public scandal.

Suspended CEO Kenny Dichabe

By Thabo Mosia | newsroom@centralnews.co.za

BLOEMFONTEIN – The CEO of the Free State Gambling, Liquor, and Tourism Authority (FSGLTA), Kennilworth “Kenny” Dichabe, a known ally of Ace Magashule, finds himself entangled in a public scandal. The Ad-Hoc Committee’s preliminary report has levelled serious accusations against Dichabe and other officials, alleging fraud, corruption, and mismanagement within the FSGLTA..

Here’s a detailed look at the unfolding situation:

Summary of the Ad-Hoc Committee Report

The preliminary Ad-Hoc Committee Report, dated March 20, 2024, lists several grave concerns about the integrity and operations of FSGLTA. Initiated by Board Chairperson Jack Tladi, the investigation was catalysed by reputational damage triggered by letters circulating on social media. The report outlined multiple issues, including:

1. Irregular Extension of Contracts : The report highlights ongoing month-to-month arrangements with expired contracts, notably those involving Great Minds (landlord for the head office) and two IT service providers, CJ Computers and Next Level Intelligence.

2. Licensing Irregularities: Both liquor and gambling licenses are riddled with irregularities. The failed implementation of an automated system has led to significant operational inefficiencies and potential financial losses.

3. Oversight Failures: The CEO has shown a lack of accountability, with serious concerns about meeting schedules, reporting structures, and internal controls.

4.Fraud and Corruption: The report details fraudulent activities, such as issuing licenses without following due process and evidence of self-enrichment, implicating Dichabe and others.

The report highlights serious misconduct within the FSGLTA, including allegations of licences being sold under the supervision of Acting Manager Compliance, Enforcement and Liquor Licensing, Mr Mosikidi. In one instance, a licence allegedly secured through misrepresentation was presented to the CEO for signing.

The CEO also faces scrutiny for flagrant misuse of entity resources, including unauthorised long-term car rentals, which led to fruitless and wasteful expenditure. A notable incident involves a rental car booked from 24 March 2022 to 12 April 2022, resulting in an expense of over R63,000, far exceeding the initially approved R22,241.01.

Recommendations from the committee include implementing an automated system, conducting a forensic investigation, establishing consequence management protocols, and developing standard operating procedures (SOPs).

According to the findings, Dichabe twice refused to implement board resolutions. Despite explicit instructions given on January 5, 2024, to open criminal cases against employees dismissed for fraudulent activities, Dichabe failed to act. He cited a misinterpretation of the PRECCA Act but promised compliance within 14 days. Months have passed, and Dichabe remains non-compliant, raising serious questions about leadership and accountability within FSGLTA.

Responses from Key Players

In the wake of these revelations, Central News sought responses from the implicated individuals. However, only a few statements were forthcoming. 

**Kenny Dichabe (Suspended CEO)**

Dichabe, claimed ignorance of the report, stating that he had not seen the document and thus could not respond to specific allegations. He further emphasised that his suspension and subsequent legal actions were politically motivated vendettas.

The report highlights key observations indicate Mr Dichabe’s refusal on two occasions to implement lawful resolutions from the Board. Additionally, despite legal advice, Mr Dichabe allegedly disregarded the country’s laws, opting to interpret them selectively.

The report also sheds light on questionable activities involving 4Racing/Phumelela, a licence holder under the FSGLTA. It’s revealed that 4Racing had been operating without signed licence conditions, and the documents they submitted to the Board for approval were mere copies from the Gauteng Gambling Board without proper review. The Operations Committee has since returned these documents for proper submission.

In what appears to be a self-enrichment scheme, it is documented that Mr Dichabe’s wife, Maleshoane Keinehetse Dichabe, is a Director at Grand Thabure, a company seeking sponsorship and collaboration with 4Racing. Notably, 4Racing paid R35,000 into Grand Thabure’s account and engaged an independent consultant for an Eastern Cape event on Grand Thabure’s behalf.

The report states that the Act establishing FSGLTA prohibits employees or their relatives from benefiting from or conducting business with FSGLTA licensees. Despite this, financial declarations for the past three years remain unsubmitted or managed poorly, raising suspicions of potential falsified information. 

Adding fuel to the fire, a leaked letter dated 7 February 2024 reveals 4Racing’s contribution to the Grand Thabure Traditional Racing Festival, held from 1 March 2022 to 28 February 2023, to the tune of R35,000. The letter, addressed to Mr Dichabe, underlines 4Racing’s support for the festival despite not meeting the initial sponsorship request. 

Mr Dichabe disclaimed any association with Grand Thabure, now implicated in self-enrichment allegations.

FSGLTA Board’s Response

In a media response, the FSGLTA Board and Management, represented by Head of Communications Tshediso Lerumo, addressed the leaked report by stating they could not comment on matters deemed sub judice, emphasising their commitment to good governance.

In his last statement on FSGLTA, Thabo Meeko, MEC for DESTEA, reiterated the need for integrity within the FSGLTA. He highlighted ongoing plans for an independent probe into the allegations, covering financial years 2022/23 and 2023/24, to ensure transparency and accountability.

Legal Proceedings

The Free State High Court in Bloemfontein recently halted Dichabe’s disciplinary hearing, pending a ruling on the legality of his suspension. Dichabe argues that only the MEC, who appointed him, has the authority to dismiss him, not the FSGLTA board. The board, however, insists it has a duty to investigate any member’s wrongdoing, including Dichabe’s.

Internal Insights: FSGLTA Staff and Board Member Commentary

Anonymous Staff Member:

“As an employee, I’ve noticed a clear lack of trust and a sense of fear within the organisation. Many staff members are hesitant to speak out because of the perceived power held by one of the female General Managers, whose name I cannot reveal. The ongoing scandal has severely affected team morale.”

Anonymous Board Member:

“This situation is regrettable and unprecedented in our institution’s history. Our immediate priority is to ensure a transparent investigation. We owe it to the people of the Free State to restore the integrity of the FSGLTA.”

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Free State Tourism CEO Dichabe Grilled on Fraud and Corruption Findings 3


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