Embattled Justice Minister Thembi Simelane. (Photo by Brenton Geach/Gallo Images via Getty Images)
Embattled Justice Minister Thembi Simelane’s office confirmed on Thursday that she was interviewed by the ANC’s integrity commission concerning the personal loan she received from a middleman in the VBS Mutual Bank scandal.
Justice ministry spokesperson Tsekiso Machike said the interview took place on Wednesday as scheduled but could not comment on the content of the discussion.
The chairperson of the commission, Reverend Frank Chikane, referred questions as to when the ANC was likely to review a report from the commission when the national executive committee meets next to the party’s national spokesperson. He did not respond to messages.
But a well-placed source said it can safely be assumed Simelane reiterated the account of events she gave parliament’s portfolio committee on justice on 6 September.
In that briefing, she dismissed any suggestion of a conflict of interest despite her oversight as justice minister of the National Prosecuting Authority (NPA), which is investigating cases flowing from the collapse of the bank in 2018.
These have revealed that Gundo Wealth Solutions made a lot of money in return for soliciting deposits from municipalities.
In terms of public financing laws, municipalities are not allowed to deposit money with mutual banks but Polokwane committed more than R300 million in this manner in 2016 and 2017.
The deposits were solicited by Ralliom Razwinane, who owned Gundo Wealth Solutions, and faces corruption charges, some reportedly specifically linked to extracting the money from the municipality.
The minister stressed that she did not accept a loan from VBS but from Gundo Wealth Solutions and that the company was not one of the municipality’s registered service providers and did not receive a cent from it.
Simelane said she paid back R849 000 on a loan of R575 600 taken out to buy a coffee shop in Sandton, and was allowed to do so over a period of four years.
MPs said this did not answer the glaring question as to why she sought personal financial advice from an entity that was doing business with the Limpopo municipality where she was the mayor at the time.
They expressed bewilderment that she would accept an interest rate of almost 50%, rather than approach a bank for a loan when she needed financing to buy the coffee shop.
Simelane said she had tried but was unable to secure more favourable terms elsewhere.
She told MPs she repaid the loan from her family’s business account to Gundo’s Nedbank account in three instalments between October 2020 and January 2021.
She did not supply proof of payment to the committee but said had done so in a report to President Cyril Ramaphosa on the subject. The president’s office said a fortnight ago that he was mulling the minister’s report.
In the meanwhile, ANC secretary general Fikile Mbalula told the media that the integrity commission would recommend to the national executive committee what must happen and the party would follow its established processes to review Simelane’s version of events.
“She will present herself to the integrity commission. The integrity commission, upon receiving her full account of what actually happened, will recommend to the national executive committee what must happen to the comrade. That is where we are; we have checks and balances in the party,” Mbalula said earlier this month.
But a senior ANC figure said the president could and should take a decision on the minister’s future without waiting for the internal party process to unfold.
By waiting, Ramaphosa was wasting an opportunity to occupy the moral high ground and restore a measure of public confidence in the party.
“She is a member of cabinet. He has the power, independently of anybody in the ANC, even in terms of realpolitik, especially in times like these, to appoint and dismiss members.”
The president risked creating the impression that the decision would come not from him but from the party, the source said.
“And time just goes by. We are really messing up an opportunity to regain credibility … If you really want the trust of the people, you would act swiftly.”
The source said there was also impatience in senior party ranks in Limpopo for the ANC to deal decisively with all other figures embroiled in the scandal.
Last month, former Limpopo ANC treasurer Danny Msiza and former youth league leader Kabelo Matsepe succeeded in an application to high court to have their trial separated from that of the rest of the accused.
VBS was looted of more than R2 billion by bank officials who falsified its financial statements for the fiscal year ending March 2017, to show that the business was solvent when it was not.
The bank collapsed the following year because its coffers were depleted by a fraudulent scheme in which money flowed from suspense accounts to the officials and their family members.
According to a leaked affidavit by Tshifhiwa Matodzi, the former board chair of the bank, local government officials were offered loans in return for persuading municipalities to deposit vast sums with the bank. He has been jailed for the theft of R1.9 billion.