New acting DG says UIF’s disputed job creation funds are safe

As Alec Moemi steps up this week as the new acting DG in the Department of Employment and Labour, one of his assignments has been to put out fires following allegations of the R500-million bribery scandal in the Unemployment Insurance Fund (UIF) jobs project.

Moemi’s new boss, Thulas Nxesi dismissed the allegations that he was party to a scheme to solicit the bribe from Mthunzi Mdwaba of Thuja Capital, whose company spearheaded the R5 billion jobs creation deal with the UIF.

On Wednesday, Finance Minister Enoch Godongwana served Mdwaba with a letter demanding that he retract the “false, malicious, and defamatory statements” within seven days. So did higher education, science, and innovation minister Blade Nzimande, while ANC secretary general Fikile Mbalula took things a step further and pressed criminal charges.

Mdwaba told the public broadcaster yesterday that no apology would be forthcoming from his side, and he was ready to defend his case in court.

Faced with the baptism of fire, Moemi sought to calm the waters on Friday when he sat down for the Sunday World Engage interview. 

The Act prescribes processes

He said it was best to wait for the outcome of the department’s process to be reviewed and set aside the Thuja-UIF agreement.

“Our viewpoint is that the Public Finance Management Act exists as a law, and it prescribes the process that should be followed when matters of this nature have to be undertaken.” 

“That is what we are saying; this is what has now opened our eyes. We need to put it before the court of law. And we believe that process would be fair in the context that once we file our papers, the parties that are implicated in the report would have to…respond to what is in the court process”.

Moemi said at this stage he could neither refute nor confirm what has been put in the public domain, “but what we know between ourselves and which we seek a court of law to confirm is whether indeed the process that was followed is the correct one. And we are strongly of the opinion that it is not”.

Among the issues under dispute in the Thuja project, which was intended to create more than 750,000 jobs, is whether the company Thuja Holdings was hastily registered to score a quick buck. Mdwaba said in interviews this week that Thuja Capital was registered in 2019 when the proposal was first conceptualised. 

He said that it subsequently became a legal impediment for Thuja Capital to enter into a deal with the UIF, making it necessary for Thuja Holdings to be registered in December last year, just a few weeks before the agreement with the UIF was inked.

Mdwaba’s threats of legal action

Moemi said the statement Nxesi issued earlier in the week refuting the bribe allegations against him was sufficient.

“This attack has been directed at the ministry, and they issued a statement. The minister refutes that there is no such thing, and he highlights a number of issues”. 

Nxesi said in a statement on Wednesday that he acted immediately to stop any payment, even in the face of Mdwaba’s threats of legal action, thus safeguarding public funds.

“I then called for a forensic investigation, which pointed to irregularities, including a conflict of interest: Mdwaba was both Chair of Productivity SA (an entity of the Department of Employment and Labour) and CEO of Thuja. We therefore instructed lawyers to prepare an application to set aside the Thuja agreement, and Mdwaba was removed as Chairperson of Productivity SA”.

Moemi said his role was to assure the public that while there was a dispute, the public funds were still safe and secure.

“It is a good guarantee to give to the members of the public to know that the dispute may grind, but the money remains safe. We will be guided by what the courts have to say on the matter”.

He said allegations that he was brought into the job because he would be pliant in comparison to his predecessor, Thobile Lamati, were misplaced. 

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