Simelane’s coffee shop — Fixer’s sole ‘loan’ in 2016 was paid with ‘corrupt’ VBS kickback cash

Post-publication update: The first version of this story reflected that Gundo was not a registered credit provider and could, therefore, not offer lawful loan services to T5 Investments. This is incorrect. A “large agreement” (over R250 000) to a company is excluded from the National Credit Act. We have deleted references to Gundo not being a credit provider as the rule is not applicable in this article. 

Thembi Simelane took the sole “loan” that corruption accused Ralliom Razwinane claimed to have issued in 2016 from his financial advisory company, Gundo Wealth Solutions’ account held at VBS Mutual Bank. 

The only other payouts marked as “loans” in the Gundo account (all made after 2016) total R23,000 and were made to three people, a joint Daily Maverick and News24 investigation has found. 

Simelane claims Gundo “loaned” her R575,600 in October 2016 to buy a coffee shop in Sandton. She was the mayor of Polokwane Municipality at the time, and Razwinane was the “commissions agent” who facilitated five unlawful investments of R349-million in VBS, starting days before he made the “loan” to Simelane. 

Razwinane received millions in kickbacks from VBS for connecting the bank and the municipality.

There was no cash other than the VBS kickbacks in the Gundo account when it bought the coffee shop for Simelane — cash that is now central to Razwinane’s prosecution.

To “loan” more than half a million rand to Simelane, Gundo dipped R400,000 deep into its overdraft at the bank. Razwinane parted with 39% of the money the Gundo account received that year. Only 11% of the account’s income was paid to other entities. The rest, plus a large portion of Gundo’s overdraft, funded regular payments to Gundo’s Nedbank and FNB accounts, or part payments towards his properties, the analysis found.

Read more: EXCLUSIVE: Justice minister took half a million rand ‘loan’ from accused VBS investment broker in 2016

A person with inside knowledge of Gundo’s business deals suggests that Simelane’s receipt of the sole “loan” Gundo made in 2016 and the amount of cash Razwinane paid towards her business is questionable, as the company was never in the money-lending business.

This casts significant doubt over Simelane’s attempts at explaining how she became a beneficiary of VBS loot. 

Razwinane is on trial for 13 counts of corruption linked to the VBS loot in his Gundo account. The kickbacks to Gundo, of which a portion eventually ended up with Simelane, are the subject of two counts of corruption.

When Simelane bought Silvana’s Coffee Shop, she had oversight of Polokwane Municipality’s R3.5-billion budget. As mayor, she was the accounting officer — she had ultimate responsibility for the municipality’s financial management and governance.

Eight years later, Simelane — now justice minister — has denied any impropriety. She said there was no conflict of interest when she used Gundo, which was contracted to her municipality, as her personal “loan” provider. She further denied any conflict of interest between her being a potential VBS suspect and the political head of the National Prosecuting Authority, which is responsible for the sprawling VBS prosecutions.

The minister is due to appear in Parliament on Friday to answer questions related to the “loan”.

Razwinane did not reply to questions sent to him by the authors of this article.

The secrets of Gundo Wealth Solutions’ VBS account