Justice & constitutional development minister Thembi Simelane’s revelations in parliament and her subsequent media blitz did not help her cause.
The minister, whose department oversees both the National Prosecuting Authority (NPA) and the judiciary, is in an invidious position due to a R575,600 “loan” she received from Gundo Wealth Solutions, whose director, Ralliom Razwinane, has been implicated in the looting of the now defunct VBS Mutual Bank.
The transaction occurred in 2016, when Simelane was mayor of the Polokwane municipality in Limpopo. She approached Gundo for the loan after it facilitated investments of more than R349m from the Polokwane municipality into VBS, despite it being unlawful for a municipality to invest in a mutual bank.
Simelane told parliament she was “sanctioned” by being made to spend two years brushing up on her understanding of the Municipal Finance Management Act. The money was withdrawn from VBS and returned to the Polokwane municipality shortly before the bank went bust. Coincidentally, it was at this time that Simelane says she paid back the loan.
The dubious loan came to light in an investigation by Daily Maverick’s Pauli van Wyk and News24’s Kyle Cowan. Simelane sought to quell the deepening controversy around her role in a portfolio overseeing key institutions in the criminal justice system when she appeared before parliament.
Source of income
She declared that the loan was above board and that she had paid it back in three instalments that included total interest of 47% of the loan amount. Simelane told parliament she wanted to buy the coffee shop because of the risky nature of political appointments. So, in effect, in the year she was reappointed mayor (she took up the post in 2014 and was re-elected after the 2016 election), she realised that being a politician was a risky business and she needed an alternative source of income to fall back on should politics turn sour. She therefore purchased the coffee shop, which she no longer owns. Politics must have paid off since then.
Corruption Watch has pointed out further pertinent questions, which remain unanswered by the minister. It asks what the source of the income was for the repayment of the loan, which was substantially larger than the initial payment required for the coffee shop. She said she paid back more than R800,000 in three tranches in late 2020 and early 2021, after the investigation into VBS began.
Conflict of interest
The nonprofit points out that she has failed to put forward an argument to quash the perception that the “loan” was a kickback for the unlawful investment into VBS from the Polokwane municipality. However, Accountability Now director Paul Hoffman argues that this is actually just an aggravating factor, writing in the Daily Maverick that the mere fact that the loan was taken puts the minister at risk of conflict of interest.
Hoffman’s argument cuts to the heart of the matter. Razwinane, who gave Simelane the loan, is being prosecuted on corruption charges linked to the VBS matter. As the political head of the NPA, Simelane is clearly conflicted, whether or not the loan was a kickback, which unfortunately it appears to be.
President Cyril Ramaphosa has now received a detailed submission from Simelane explaining her involvement in the matter. She told parliament that this submission included the loan agreement — which she didn’t see fit to provide to MPs. Her ardent defence of the loan in parliament left MPs with many unanswered questions. They are now seeking legal advice on obtaining the loan agreement from Simelane.
The president is fortunately a stickler for process. His job is to protect the integrity of the SA state and its interests. The presidency is on record as saying Ramaphosa would “apply his mind” to the matter, but what is at stake here goes beyond whether Simelane received kickbacks. That is for a court to decide, should the matter ever come before one.
What it is really about is the integrity of the criminal justice system and whether the NPA’s political head is compromised as the authority pushes forward with a swathe of VBS-related prosecutions.
Simelane has proclaimed that she “would never” interfere in the work of the NPA; she was passionate in her declaration. But the issue is too important for SA to simply take her word for it, particularly given the history of the NPA’s work being interfered with under former president Jacob Zuma. SA is still reeling from the aftermath of a compromised prosecuting authority that fell prey to political interference.
The Simelane matter is about protecting current and future prosecutions linked to VBS, and as such Ramaphosa should have already made up his mind.
• Marrian is Business Day editor at large.
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