Justice Minister Thembi Simelane repaid her loan from Gundo Wealth Solutions in three tranches of R283 333 and paid it off with interest.
These revelations are contained in a report she submitted to President Cyril Ramaphosa two weeks ago and seen by Sunday World.
In the report, Simelane also informed Ramaphosa that she repaid the loan with R274 399 interest.
The minister confirmed to the president that she had taken a R575 600 loan from Gundo Wealth Solutions to buy a coffee shop and paid it back in full. She told Ramaphosa that her first repayment was on October 9, 2020, the second instalment was on November 12, 2020, and the last payment was on January 7, 2021.
Simelane’s spokesperson, Tsekiso Machike confirmed to Sunday World on Friday that the minister did send a report to Ramaphosa but he refused to give more details.
“The minister is on record that she has taken an oath, and therefore she cannot mislead
parliament and the president about the repayment of the loan she received from Gundo Wealth Solutions.
“It must also be noted that the minister never received any money from VBS Mutual Bank or its subsidiaries,” Machike said.
He refused to answer further questions, stating that the matter was in the offices of the
president and parliament.
However, Sunday World can reveal that in the submission, Simelane told Ramaphosa that reports that she “obtained gratuitous payments for the purchase of a coffee shop” from a service provider were untrue.
She informed the president that Polokwane Municipality did invest R349-million into VBS Mutual Bank, which was paid in four tranches.
“The municipality also made significant other investments with other institutions, such as Standard Bank, Sanlam, Nedbank, Liberty, Absa, and Investec, to name but a few.
“The municipality subsequently reviewed its investments and withdrew all its
investments from VBS Mutual Bank, together with interest on investment, and
did not lose a single cent, following its collapse,” Simelane told Ramaphosa.
Simelane also admitted that the municipality appointed Gundo Wealth Solutions as an investment manager under strict conditions that they “wouldn’t be paid an administration fee nor any other fees for the advisory services”.
“Gundo Wealth Solutions was not a typical contractor of the municipality, in the strict sense of the word, in that municipality did not pay Gundo Wealth Solutions for services rendered,” Simelane stated in her report.
The minister said she had seen a business opportunity to own a coffee shop and established a company, T5 Investment Group, in July 2016, as a “special purpose vehicle for understanding the business of a coffee shop”.
Simelane said she first intended to take money out of her retirement savings and invest it in the coffee shop business, but someone advised her against it because of the “levies, surcharges, taxation, and penalties that would arise on withdrawal of the retirement savings”.
Simelane stated that she then approached Gundo Wealth Solutions for a loan of R575 600, which her company, T5 Investments Group, finalised and signed on September 30, 2016. Simelane informed the president that she repaid her loan to Gundo Wealth Solutions in full and also submitted the proof of her loan repayment to the
president.
“T5 Investments Group repaid Gundo Wealth Solutions an amount of R849 999, of which R575 600 was the capital amount outstanding and an amount of R274 399 was interest on the loaned amount,” the minister said.
Simelane refuted any conflict of interest, stating that the municipality made its initial investment with VBS Mutual Bank “without my involvement” on October 12, 2016, following the signing of her loan agreement with Gundo Wealth Solutions on September 30 of the same year.
“Therefore, there existed no conflict of interest in securing a business loan from Gundo Wealth Solutions.”
She said her relationship with Gundo Wealth Solutions ended on January 7, 2021, when she paid her last instalment.
Simelane, addressing concern that the matter could compromise her as justice minister, added that her department “plays no role in the NPA’s decisions to prosecute or to discontinue prosecutions”.
“The law enforcement agencies responsible for investigating all crimes, including crimes related to VBS, are not subject to the executive control of the Department of Justice and
Constitutional Development,” she said.
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