Thembi Simelane: I don’t have a choice to be investigated or not over VBS loan

Embattled justice minister Thembi Simelane said she will welcome any investigation into whether she benefited from the Venda Building Society (VBS) mutual bank.

Appearing before Parliament’s justice committee on Friday, Simelane was adamant that there was nothing untoward about the private loan of R575 600 she received from VBS to open a coffee shop when she was the mayor of Polokwane in 2016.

Watch DA MP Glynnis Breytenbach grilling justice minister Thembi Simelane during the portfolio committe meeting

Hawks raid

Last week, the Hawks executed a search and seizure warrant on Simelane’s former personal assistant, based at the Polokwane municipality, to secure possible evidence of corruption linked to the municipality’s R349 million investment with VBS in 2016 and 2017.

Simelane told the committee she has nothing to hide.

“I don’t have a choice to be investigated or not. So, definitely I will welcome it. Actually I don’t even have to be consulted by the way. Police don’t consult like that.

“They don’t come to your door and say ‘ hi dear madam we’re asking to investigate you, madam I will come back,’ no it doesn’t work like that and it can’t happen in this instance.

“I’ve just heard from you now about the raid, I’m not even aware about it and if you look at [it], a raid gets to be approved by a judge, if it’s a legal raid. So, if I have this influence, the raid you are taking about, shouldn’t have happened,” Simelane said.

Warrant

A copy of the warrant, dated 29 August 2024, and a copy of the affidavit filed by Colonel Anton White of the Hawks in Limpopo in support of the warrant reveals that a case relating to the R349 million the Polokwane municipality invested with VBS between 2016 and 2017 was registered in November 2019.

The investigations focused on a possible violation of the Municipal Financial Management Act, possible corruption and possible money laundering in alleged contravention of the Prevention of Corrupt Activities Act.

Coffee shop loan

Simelane allegedly took a R575,600 “commercial loan” from Gundo Wealth Solutions, a company that brokered unlawful investments of R349 million by the Polokwane Municipality into the now-defunct VBS Mutual Bank.

Gundo Wealth Solutions is owned by Ralliom Razwinane.

Simelane used the “loan” to buy a coffee shop in two transactions in October 2016. The payments appear linked to kickbacks received in exchange for large deposits by Polokwane Municipality into VBS.

No conflict

Earlier, Simelane told the committee that despite the fact that Polokwane municipality had invested R349-million in VBS through the same fixer who arranged her loan, Gundo Wealth Solutions, there was no conflict of interest.

“I would like to affirm that there was no improper relationship, I requested for a loan, a loan was advanced,” she said.

“Much has been said about the conflict of interest to the position I now hold. The Department of Justice and Constitutional Development plays no roles in decision-making by the NPA [National Prosecuting Authority] on who to prosecute or not,” Simelane said.

Simelane aid she had sought the loan for a private commercial venture in 2016 because she “wanted to create employment opportunities for myself and my next of kin”, which her position as Polokwane mayor did not allow owing to anti-nepotism regulations.

Loan repaid

The minister said she had initially intended to withdraw money from her retirement savings to finance the coffee shop.

“I experienced difficulties because of the cost and the charges … The percentage of tax was making the whole idea not feasible.”

Simelane insisted that the fact that she repaid the loan was evidence that no wrongdoing was committed.

“On the matter of taking the loan, I’ve dealt with the allegations of conflict and my understanding was that if you ask for assistance on someone who does not have a direct bearing or payment from the municipality, it is possible and I repaid it back.

MPs not happy

Simelane said the contracts and proof of payment are in her report to President Cyril Ramaphosa.

However, MPs were not satisfied and requested that Simelane produce the loan agreement she signed with Gundo, which she did not bring to the meeting.

Simelane explained that the loan has always been characterised as a loan and “not a kickback.”

Massive interest

Democratic Alliance (DA) MP Glynnis Breytenbach grilled Simelane on the VBS Bank loan saying when one considered the interest Simelane ultimately paid Gundo when she repaid the loan, the decision to take money from the company became baffling.

“You negotiated a loan with an entity doing business with your [municipality] who was not a registered financial services provider, and did you at any stage attempt to get an arm’s length, proper, ordinary commercial loan from a bank? Your own bank, wherever you bank?

“Why did you get a loan from them? What was so attractive about doing business with Gundo, particularly bearing in mind the really extortionate, if your figures are correct on a loan of R575 600, you paid interest of R274 399, which is practically 50%, it works out to 47% interest on a loan in the bigger scheme of things is not even huge. Why would you enter into such a one-sided transaction” Breytenbach said.

Breytenbach said she believed Simelane should step aside, stopping short of calling for her resignation.

Athol Trollip calls for resignation

ActionSA MP Athol Trollip said Simelane’s appearance before Parliament’s justice portfolio committee to address her dodgy VBS-linked loan was just a “talk shop that raised more questions than answers”.

“As long as she has a cloud hanging over her head, about possible or alleged corruption, she cannot serve as the minister of justice and should do the honourable thing and resign or be placed on suspension.”

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