The Polokwane municipality in Limpopo has distanced itself from its former executive mayor, Thembi Simelane amid allegations that she received “unlawful” funds from the Venda Banking Society (VBS).
The Daily Maverick reported this week that Simelane allegedly received R575, 600 from Gundo Wealth Solutions in 2016 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.
Municipality invested funds, later withdrew them
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.
However, the municipality this week said it is not linked to the erstwhile mayor’s controversial loan that has sparked public outcry.
The municipality has acknowledged that it had previously invested money in the collapsed mutual bank. However, the funds were later withdrawn entirely without incurring any loss.
The funds were withdrawn after the municipality discovered some compliance issues. It found that the investment was not in accordance with Municipal Finance Management Act.
Municipal spokesperson Thipa Selala said: “We can confirm that the municipality once invested money in the account of VBS. But we later withdrew all the money because we realised that it was in contravention with the MFMA. We can also confirm that the municipality did not incur any loss when the bank collapsed.”
Ralliom Razwinane owned Gundo Wealth Solutions. This is the company that had a contract with the municipality to provide investment broking services. He is on trial for fraud.
Kickbacks to broker
In October 2016, VBS allegedly paid R1.66-million in kickbacks to Razwinane and Gundo Wealth Solutions. This was in exchange for two deposits totalling R130-million from the Polokwane Municipality.
They were made shortly after Gundo signed a three-year contract to provide investment brokerage services to the municipality.
In turn, Razwinane allegedly paid R575,600, almost 35% of his kickbacks, to a company called Ricovert. The latter was the then owner of Silvanas Coffee Shop on the ground floor of Fredman Towers in Sandton.
The ANC in Limpopo said they are not denying whether the allegations against Simelane were true or otherwise.
The party’s provincial spokesperson, Jimmy Machaka, confirmed the VBS connection. He said that Polokwane was one of the municipalities in the province which invested their funds with the collapsed bank.
ANC says tainted deployees will face law processes
Machaka said they have heard through media reports that one of their former provincial deployees is embroiled in the VBS matter.
“The ANC’s attitude on the VBS saga remains the same. Anyone who has participated in the collapse of VBS must face the full might of the law. We have reiterated our stance that the law must take its course. [As a party] we are not going to any court to defend anyone on this matter.”
Machaka said the ANC will not institute any disciplinary actions against Simelane until she is officially charged.
“Our policy as the ANC says a deployee can voluntarily step aside if they are criminally charged. So far, all we hear are just allegations, and there is nothing we can do about these rumours,” Machaka said.
Since reports of the controversial loan became public, opposition parties have been demanding action. They have been agitating for the immediate removal of Simelane from her ministerial position.
