Ramaphosa calls meeting with Justice Minister to explain ‘loan’ from accused VBS investment broker

27 Aug 2024

The Presidency has broken its silence on new Justice Minister Thembi Simelane, requesting that she account over reports that she received more than half a million rand from an organisation that brokered unlawful investments with VBS Mutual Bank.

President Cyril Ramaphosa has requested a detailed report and briefing from Justice Minister Thembi Simelane regarding her dealings with VBS Mutual Bank, the Presidency said on Wednesday morning.

In a statement by the Presidency, Ramaphosa “noted with concern the media reports containing allegations of corruption against” Simelane.

On Monday, a Daily Maverick and News24 investigation revealed that in 2016, Simelane received a “loan” from a company that brokered investments with VBS Mutual Bank.

Simelane used a “commercial loan” of R575,600 from Gundo Wealth Solutions, owned by Ralliom Razwinane, to purchase a coffee shop in Sandton. Simelane was the mayor of Polokwane Municipality in 2016, when she received the loan, and when the municipality unlawfully invested R349-million in VBS, which was brokered by Razwinane.

When VBS was put under administration in March 2018, forensic investigations found it had rewarded Razwinane with kickbacks totalling R24.2-million for being a commissioning agent for various municipalities and state entities through corrupt transactions and contraventions of the Municipal Finance Management Act.

Razwinane is on trial for fraud, corruption and money laundering for his role as a commission agent connecting municipalities, including Polokwane Municipality, with VBS.

Simelane was the mayor of Polokwane between 2014 and 2021 and was appointed as justice minister in June 2024. As minister of justice, Simelane oversees the National Prosecuting Authority (NPA), which is investigating and prosecuting those involved in the looting and collapse of VBS.

On Tuesday, the EFF became the latest political party to issue a statement on Simelane, with demands for her to answer to the allegations coming in thick and fast from all quarters.

EFF called on Simelane to resign in the face of the revelations that she received more than half a million rand from an organisation that brokered unlawful investments with VBS Mutual Bank.

Ironically, both EFF leader Julius Malema and his former right-hand man Floyd Shivumbu (who has since defected to Jacob Zuma’s uMkhonto Wesizwe party) have been exposed by Daily Maverick for their involvement in the looting of VBS Mutual Bank.

Last month, the publication of an affidavit from the former chairperson of VBS, Tshifhiwa Matodzi, detailed how Malema and Shivambu were allegedly paid off not to use the EFF’s political muscle against the bank.

In a statement on Tuesday, the EFF said the scandal involving Simelane, “is not just a tale of financial mismanagement, it is a stark example of the rot within the ANC’s leadership.

“The EFF demands that Simelane step down immediately as justice minister. Her resignation is the only appropriate course of action to preserve the integrity of our justice system and to allow for an independent and impartial investigation into her actions.

“Furthermore, we call on law enforcement agencies to act swiftly in holding her accountable, ensuring that she faces the full consequences of her betrayal of public trust.”

The EFF said that Malema had alerted the public to Simelane’s “shocking abuse of power” during a Progressive Caucus press conference on 18 July.

At the press conference, Malema said, “Polokwane Municipality put money in VBS — none of you has asked the question: Who was the mayor when Polokwane was putting money in VBS?”

Conflict of interest

ActionSA announced on Monday that it had filed a complaint against Simelane with the Public Protector. In a statement, the party said it had approached the Public Protector to “urgently initiate an investigation into this matter and to probe the potential violation of the Executive Members’ Ethics Act.

“Worryingly, the question we need answered is whether South Africa’s justice minister is possibly the recipient and beneficiary of illicit VBS cash, as the available information suggests.

“Consequently, it is a matter of grave concern that Minister Simelane, who now oversees the Department of Justice and who wields significant influence over the NPA, is the very person responsible for the institution tasked with prosecuting corruption, potentially including this very matter,” said ActionSA’s parliamentary caucus leader, Athol Trollip.

Trollip said the party believed this was a “clear case of an obvious conflict of interest”.

Government of National Unity (GNU) partners the DA and Good on Monday issued statements about Simelane.

The DA’s justice spokesperson, Glynnis Breytenbach, said the allegations detailed in Daily Maverick and News24’s report “raise serious questions about the minister’s integrity and her ability to fulfil the critical role of upholding justice in South Africa”.

Breytenbach said the DA had filed a request to the chairperson of Parliament’s portfolio committee on justice and constitutional development for Simelane to appear before the committee to answer to the allegations.

“At the very least, the minister needs to be brought before Parliament to account for what measures she intends to put in place to manage the glaring conflict of interest between herself as minister of justice and constitutional development and her role involving the NPA, which must surely be investigating the minister and this transaction,” said Breytenbach.

Good’s secretary-general Brett Herron, called on President Cyril Ramaphosa to “urgently act” against Simelane, saying it was “completely untenable to have the minister of justice, responsible for protecting the rule of law, embroiled in the ongoing VBS fraud and corruption scandal”.

“The President has no choice but to act in the best [interests] of the country and in the interests of an untainted criminal justice process relating to all who are implicated in the VBS crimes.

“Unfortunately, that means that Simelane cannot remain the minister responsible for a justice system that may well have to investigate and prosecute her if the allegations sustain a prima facie case. Equally, she cannot remain at the helm if a decision not to prosecute is the ultimate outcome and is to have unimpeachable credibility,” said Herron.

‘Fully and transparently’

In a statement on Tuesday, the civil society organisations Freedom Under Law, the Ahmed Kathrada Foundation, Judges Matter and Defend Our Democracy, called on Simelane to “account fully for her involvement” with VBS.

“It is crucial that the minister responds fully and transparently to these allegations. Perceptions of corruption and conflicts of interest cause significant harm to public confidence in governance institutions and the rule of law,” read the statement.

Read more: Thembi Simelane’s date with destiny will ripple through GNU, EFF, MK and the entire justice system

“The minister carries political responsibility for key law enforcement agencies which not only are at the forefront of the fight against corruption, but are also involved in investigating and prosecuting the collapse of VBS Bank itself; a critical entity in the allegations against her. She will also take up her position on the Judicial Service Commission at its next sitting in early October. There can thus be no question marks over the minister’s probity and ethics,” it continued.

The organisations said it would be “untenable for such serious allegations against a minister in such an important portfolio to remain unanswered”.

Daily Maverick asked for comment from South Africa’s official opposition, the uMkhonto Wesizwe party, and the ANC, but had not received a response by the time of publication. Requests were also made to the Ministry of Justice and the Presidency, but no response had been received by the time of publication. DM

This article was updated at 12.07pm, 28 August 2024, to include a response from the presidency

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‘Fully and transparently’