Former Joburg mayor Kabelo Gwamanda arrested for alleged funeral Ponzi scheme

The former executive mayor of Johannesburg, Kabelo Gwamanda, was arrested on Friday for allegedly swindling Soweto residents in a funeral insurance scam that he ran in 2011 and 2012.

The Sunday Times reported that Gwamanda — an Al Jama-ah councillor in Johannesburg — was arrested after a victim of his alleged scam opened a case at Protea Glen police station in Soweto.

A warrant of arrest was issued for him in May, reported the newspaper, but  Gwamanda was travelling in Brazil at the time and failed to meet the investigating officer on his return, as he had promised.

An investigation by the Financial Sector Conduct Authority (FSCA) last year revealed that Gwamanda disappeared in 2012 when his clients came looking for their money.

Daily Maverick previously reported that Gwamanda has defended himself against allegations of dodgy dealings linked to his company, iThemba Lama Afrika funeral scheme.

SAPS Gauteng spokesperson Colonel Dimakatso Nevhuhulwi said Gwamanda handed himself over to the police on Friday and had since appeared in court.

Daily Maverick sent a request for comment to the National Prosecuting Authority but had not received a response by the time of publication.

Read more: Goodbye Mayor Kabelo, hello new face of Eau de Incompetence

Gwamanda was elected as the executive mayor of South Africa’s largest metropole in May 2023. He held the position for 15 months, calling it quits in August 2024 after intense civil society and political pressure.

Opposition parties and civil organisations had, for months, called for Gwamanda’s head, saying that his tenure was marred by unmitigated failure and that he was not qualified to lead SA’s largest metro. (Daily Maverick’s Lerato Mutsila reported on the calls for Gwamanda’s resignation here and here.)

In May 2023, a Carte Blanche investigation uncovered that his highest level of education was Grade 10. In response, Gwamanda suggested he could be “a black version of John Steenhuisen”, who does not have a university degree.

After Gwamanda’s resignation, the ANC’s regional chairperson, Dada Morero was appointed as executive mayor of Johannesburg.

Gwamanda is currently the member of the mayoral committee (MMC) for community development.

He was recently nominated by Al Jama-ah to be its representative on the dispute-resolution committee in the 10-party Government of National Unity (GNU). On Wednesday, Gwamanda attended the first clearing-house committee meeting, which took place in a virtual sitting.

Daily Maverick’s Ferial Haffajee previously reported that Gwamanda wanted to enter national politics and was on the Al Jama-ah list of candidates for election to the National Assembly, but didn’t make it because of the party’s dismal election results.

‘Courage and cooperation’

In a statement on Sunday morning, Al Jama-ah councillor Yusuf Dalwai said the party commended Gwamanda for his “courage and cooperation” at this time.

On 18 October, Dalwai said Gwamanda, “on invitation”, from the Directorate for Priority Crime Investigation (Hawks) Commercial Crimes Division, was requested to present himself to the Protea North SAPS, which he “fully complied” with.

“The MMC was subsequently charged with fraud. He had on the same day appeared before a judge and is currently released on bail pending further investigation,” said Dalwai.

pic.twitter.com/nK6oSAXJQ1

— Al Jama-ah (@Aljama_ah) October 20, 2024

“Although the political party would like to observe and respect the sub-judice nature of the matter, we as a political party reaffirm our respect for the rule of law and judicial processes as demonstrated by MMC Gwamanda.”

However, Dalwai added that Al Jama-ah was “surprised” by the timing of law enforcement’s action against Gwamanda, amid his appointment to the GNU clearing-house committee.

‘The people of Joburg deserve better’

On Sunday, the DA in Johannesburg welcomed Gwamanda’s arrest.

“This development, while overdue, further confirms the DA’s warnings about the ANC and its coalition partners’ failure to provide ethical and transparent leadership for the people of Johannesburg,” said the DA’s Johannesburg caucus leader, Belinda Kayser-Echeozonjoku.

She said that since his election as mayor in May 2023, “serious allegations of fraud and deception” had followed Gwamanda — allegations which the DA highlighted in May last year.

Read more: Joburg’s new mayor defends allegations of dodgy dealings and lack of tertiary education

“Yet, despite these warnings, the ANC chose to support him as the mayor of Johannesburg, dismissing the concerns as mere ‘gossip’. This arrest not only vindicates the DA but exposes the reckless disregard the ANC, along with its coalition partners Al Jama-ah and the EFF, have shown toward the people of Johannesburg by allowing a deeply compromised individual to hold the city’s highest office and now as MMC for community development,” said Kayser-Echeozonjoku.

“The people of Johannesburg deserve better. They deserve a mayor they can trust, not one who swindles them out of their hard-earned money.”

“For years, Gwamanda avoided accountability, even leading the city as mayor while his victims were left believing he had died, a shocking betrayal of the public’s trust.”

The DA demanded that “the legal process be allowed to run its course without any interference”.

Kayser-Echeozonjoku said the DA would write to Mayor Morero requesting an investigation into the agreements entered into under Gwamanda’s tenure as mayor and now in his position as an MMC.

“The people of Johannesburg deserve better. They deserve a mayor they can trust, not one who swindles them out of their hard-earned money.”

The ANC in Johannesburg declined to comment.

“There is no comment from the ANC Joburg on the matter, as the matter is outside our jurisdiction, as he is not a member of the ANC nor councillor of the ANC,” said ANC regional spokesperson Masilo Serekele.

The City of Johannesburg had not responded to Daily Maverick’s request for comment by the time of publication. DM