By Lehlohonolo Lehana.
The Justice & Constitutional development minister Thembi Simelane says she will give a full and detailed report on allegations around her links to VBS Mutual Bank.
Simelane spoke in Parliament on Wednesday.
During Wednesday’s parliamentary session, MPs called on Simelane to resign given that she is at the helm of state security agencies charged with prosecuting corruption, which remains a scourge in SA.
Simelane took a loan of R575 600 from Gundo Wealth Solutions, a brokerage investment company that facilitated investments between municipalities and now defunct VBS Mutual Bank.
She used the “loan” to buy a coffee shop in two transactions in 2016.
At the time, Simelane was the mayor of Polokwane when the municipality unlawfully invested R349 million into VBS, which was brokered by Razwinane’s Gundo.
In October 2016, VBS paid R1.66-million in kickbacks to Razwinane and Gundo Wealth Solutions 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 paid R575,600, almost 35% of his kickbacks, to a company called Ricovert, the then owner of Silvanas Coffee Shop on the ground floor of Fredman Towers in Sandton.
Simelane has confirmed the Ricovert transaction was to aid her purchase of the business. She characterised the deal as a legitimate “commercial loan” which was “fully repaid”.
“The transaction was completely above board,” she said.
Forensic investigations found VBS paid a kickback, worth R24.2 million, to Razwinane for brokering investments from various municipalities and state entities through allegedly corrupt transactions and breaches of the Municipal Finance Management Act.
He is currently on trial for fraud, corruption and money laundering for his role as a commissions agent connecting municipalities, including the Polokwane Municipality, with VBS.
President Cyril Ramaphosa has requested a detailed briefing from Simelane over her involvement in the VBS scandal.
Civil society organisations have also added their voice to calls for Simelane to urgently clarify corruption allegations that linked her to the VBS scandal.
Freedom Under Law (FUL), Ahmed Kathrada Foundation, Judges Matter and Defend Our Democracy have expressed concerns about the explosive revelation that Simelane was connected to unlawful investments in VBS Mutual Bank.
The commission agent scheme run by VBS management was identified as an illegal method used to bribe municipal officials to make “massive deposits” into the bank, the extensive Motau and Werksmans probe into the implosion of VBS found in 2018. Motau’s report, The Great Bank Heist, set out the findings in detail.