President Cyril Ramaphosa
President Cyril Ramaphosa’s office on Wednesday confirmed receipt of a report by justice minister Thembi Simelane on the controversial loan she took from a company implicated in the VBS Mutual Bank scandal and said he was applying his mind to the matter.
In doing so, Ramaphosa would bear in mind the need for the “highest levels of integrity within the national executive”, his spokesman Vincent Magwenya told a routine media briefing in Cape Town.
“The president appreciates the importance of the justice ministry in the leadership of the justice, security and crime prevention cluster and the successful functioning of the cluster,” Magwenya said.
“He will consider all the facts of the matter before making any determination.”
Simelane on Friday told the portfolio committee on justice she had given Ramaphosa a full account of her decision to borrow R575 000 from Gundo Wealth Solutions while she was the mayor of Polokwane.
The same company had solicited deposits of millions of rands from the Polokwane municipality on behalf of VBS, despite public finance rules barring municipalities from placing money with mutual banks.
The minister told MPs that she used the money to buy a coffee shop in Sandton as a source of income and employment for her extended family, and had repaid the loan in full, in three instalments from October 2020 to January 2021.
She paid 50% interest, she said. This prompted incredulous questions as to why she had not only seen fit to take money from a company that was doing business with the municipality but charged unfavourable rates.
Simelane replied that the Polokwane municipality had not paid Gundo for serving as a middleman and that she had not been able to secure better terms from banks and financial service providers.
“I attempted a loan,” Simelane said. “The costs were as exorbitant as this cost. It was at that level,” she said, before adding that apart from First National Bank she also approached Old Mutual.
“It was not affordable for me at the time and I wanted the venture.”
She has since sold the coffee shop.
Simelane did not provide the portfolio committee with proof of the loan agreement and repayment but said she would consider doing so.
VBS collapsed in 2018 after its coffers were depleted by a fraudulent scheme in which money flowed from suspense accounts to bank officials and their family members.
According to a leaked affidavit by Tshifhiwa Matodzi, the former board chair of the bank, local government officials were offered loans in return for persuading municipalities to deposit vast sums with the bank. He has been jailed for the theft of R1.9 billion.
Simelane has insisted that Polokwane — unlike other Limpopo municipalities — lost no money because she had ensured that all deposits were withdrawn.
The minister told MPs she saw no conflict of interest in the fact that in her present portfolio she has political oversight over the National Prosecuting Authority, which is pursuing charges against those implicated in the demise of the bank.
She briefly served as minister of cooperative governance after the May elections.
“The department of constitutional development and justice plays no role in the decision-making by the NPA on who to prosecute or not.”
The Mail & Guardian
mg.co.za
