Employment and Labour Minister Thulas Nxesi has initiated legal action to set aside the contentious R5-billion Unemployment Insurance Fund (UIF) and Thuja Capital’s job-creation deal.
The contract has been engulfed in a storm of controversy, with businessman and Thuja Holdings CEO Mthunzi Mdwaba accusing high-profile figures including Nxesi of trying to solicit R500-million in bribes for the project to be approved.
The other figures implicated include ANC secretary-general Fikile Mbalula, who has since opened a criminal case against the businessman; Higher Education Minister Blade Nzimande; and Finance Minister Enoch Godongwana.
But the leaked N Gawula Incorporated forensic report that allegedly exposed irregularities in the finalisation of the Thuja deal — which those implicated have demanded — will not form part of the court record.
This is despite Nxesi boldly claiming that the forensic report, which was his smoking gun, would be included in court papers, only to be corrected by his acting director-general Alec Moemi that the document remains under wraps.
The deal
The UIF agreement to fund a job-creation initiative run by Thuja Holdings has been scrutinised for its alleged rapid approval including the fact that former director-general Thobile Lamati overruled the objections of some of his subordinates.
Reports suggest that some senior Department of Employment and Labour officials were determined to push the deal through despite it being untested, which Mdwaba disputed.
Also, Thuja Holdings was established just 10 days before the agreement, but according to Mdwaba, this was forced by the fact that Thuja Capital, a subsidiary of Thuja Holdings, could not legally enter into a contract with the UIF.
Nxesi said on Thursday in a media briefing that the agreement, which was signed in December 2022, was done without the knowledge of Godongwana’s co-approval as finance minister.
The minister vehemently denied the corruption allegations, questioning why Mdwaba waited nearly a year to bring them forward and challenging him to prove them in a court of law.
“I categorically deny the recent allegations of corruption; you must ask why Mdwaba waited nearly a year to come up with these allegations. Mdwaba will now have to prove these allegations in a court of law,” said the minister.
Nxesi emphasised that the key issue is the legality and validity of the Thuja deal and whether due processes were followed.
He claims that the agreement was concluded in breach of the Public Finance Management Act, so he filed an urgent court application to set it aside.
He has challenged Mdwaba to provide evidence supporting his claim.
The minister said he has also requested the president to issue a proclamation for an investigation by law-enforcement agencies, highlighting Mdwaba’s failure to approach such authorities with his allegations.
“If he cannot provide that evidence, I have asked the court for an interdict to stop him from promoting his campaign of false and unsupported lies.
“I have also requested for the president to issue a specific proclamation to have this agreement investigated by the law-enforcement agencies, seeing that Mr Mdwaba has not approached the law-enforcement authorities to report the alleged crime because he is content with making unsupported allegations against me.”
Attempting to save face, Nxesi suggested that Mdwaba is pushing a personal vendetta against him because of his previously failed attempts to ascend to a high position in the International Labour Organisation (ILO).
“The source of Mdwaba’s bitterness towards me personally dates back to his failed attempt to secure the position of director-general of the ILO.
“When government withdrew its support for his candidacy after it emerged that he failed to disclose that a South African court had declared him to be a delinquent director of companies.
“The government was also made aware of a court judgment in the Western Cape, which has found that Mdwaba is a law breaker, was not an honest witness, and lacked the elementary attributes of good leadership for a position he held at the University of the Western Cape as chairperson of the council,” he said.
He added: “There is nothing that can undermine the integrity of our democracy and the system of constitutional governance more than forged allegations that a group of cabinet ministers has in a corrupt scheme, deliberately conspired to frustrate the implementation of a viable job-creation project by demanding the payment of corrupt fees from the private service provider. These allegations will now be tested in court.”
