Thembi Simelane, Minister of Justice and Constitutional Development, has given a briefing to the Justice Portfolio committee about the accusations made against her in relation to the VBS Mutual Bank.
She appeared before the portfolio committee on Friday in Cape Town. This was in response to claims that, while serving as Polokwane mayor, she profited from the bank heist at VBS Mutual.
According to a recent Daily Maverick report, Simelane allegedly received R575, 600 from Gundo Wealth Solutions in 2016. This was when she was still the mayor of Polokwane.
Under her mayoral tenure, the municipality had invested around R350-million in the now-defunct mutual bank.
Bought coffee shop with loan
Simelane, now the Minister of Justice and Constitutional Development, is said to have used the loan to buy a coffee shop. The coffee shop is in Sandton, Johannesburg, in two transactions in October 2016.
Before the committee on Friday, Simelane refuted any accusations of misconduct. She said she wanted the coffee business to work because it is hard to get a job outside of public service. And even because nepotism makes it hard to help family members.
“Political positions by their nature are short-term. So that necessitated that I investigate a feasible possibility of opening such a business. And a coffee shop seemed like a feasible option so that I could create employment for myself and my next of kins,” she said.
She revealed that the coffee shop employed between eight to 12 people due to the work that would be required.
Loan company brokered unlawful VBS investments
The minister said she was approached by Gundo Wealth Solutions, a company that brokered unlawful VBS investments, about a loan.
“In consideration for the options loan, Gundo was not a service provider. And there existed no conflict in my view, from accessing a loan from Gundo. I took a decision to proceed with the business and the following steps ensued,” she added.
In September 2016, she said, she concluded the registration of T5. This was coming from a previous company that owned the coffee shop.
“Following that loan agreement, R575, 600 was paid to the previous owners by Gundo Wealth Solutions.”
Simelane is also required to provide President Cyril Ramaphosa with a report on the subject. In relation to the accusations, she will also appear before the ANC’s integrity committee.
“I have nothing to hide. That is why I am here to give explanations. The coffee shop exists. It is no longer owned by me. I do not know the owner.”
Mkhwebane explains minister’s predicament
Former public protector Busisiwe Mkhwebane said she understands the explanation that Simelane could not access commercial banks and resorted to a mashonisa (loan shark).
“This shows the reality of our background as black people. In a sense that we might ask all the questions about the loan, the loan agreement, why approach the person? And you have explained that you have tried other commercial banks. But unfortunately you ended up going to the so-called mashonisa.
“But again, if you are [redlisted] and do not have any source of income, that is the reality of us as black people. Because we do not have that privilege of accessing the [financial] resources,” she added.
