Thembi Simelane’s unexplained cash (Part Three) — The mystery cash used to pay back R849K for VBS-linked loan

By Pauli van Wyk (Daily Maverick) and Kyle Cowan (News 24)

5 Dec 2024

Thembi Simelane’s declared income for the 2020/21 financial year – the same period her Sandton business, Silvanas Coffee Shop, ceased to make money – was about R515,000. Yet, a list of limited expenses racked up to at least double that. The lion’s share was spent on allegedly repaying R849,000 towards the VBS-linked coffee shop ‘loan’. But a due diligence report dated January 2020 found it ‘highly unlikely’ that Simelane could afford rental for a year of R9,000 per month.

Cornered by Parliament in September this year for an explanation about the Silvanas Coffee Shop “loan” she took from a criminally charged VBS fixer, then justice minister Thembi Simelane claimed her business T5 Investment Group repaid R849,000 to the lender four years later.

Simelane offered no evidence to support this claim, but was very specific about the repayment dates – 9 October 2020, 12 November 2020 and 7 January 2021 – and compiled a report to President Cyril Ramaphosa that allegedly confirmed the “loan” settlement.

Yet, documents linked to a rental application months earlier, in January 2020, found that based on her net salary from Polokwane Municipality of R38,000 a month at the time, she was “highly unlikely” to afford the rental expense of R9,000 she applied for.

Despite her modest mayoral salary and a cellphone bill that, at this stage, stood at R51,000, Simelane had about R190,000 in cash of unknown origin in her personal bank account.

So she paid the required R115,550 in rent for one of her children’s accommodation in Cape Town for a year, up front, documents we have seen show.

A joint investigation by Daily Maverick and News24 suggests that in the same financial year Simelane spent at least R1.18-million while her annual post-tax mayoral salary and other declared income was about R515,280. She registered no additional outstanding bonds, loans or relevant credit amounts and seemingly did not have a share portfolio healthy enough to support the expenses.

The pattern emerging from Simelane’s income and expenses in this financial year echoes our findings in the first and second parts of this series, focused on Simelane’s unexplained cash.

In Part One we showed that Simelane lived an unaffordable life as mayor of Polokwane when, particularly in 2018, her luxury expenses eclipsed her income by 569%.

In Part Two we highlighted how Simelane’s private and business affairs were questionably conflated, that she funded her lifestyle from her business accounts and that these were puffed up with millions of rand of opaque origin that cannot be fully linked to income generated by the coffee shop.

In this third article, we explain that Simelane’s tenure as mayor of Polokwane appears marred by her receiving and spending cash she now declines to explain. The available facts as well as independent sources at the authorities and people close to Simelane suggest her company, T5 Investments, received large unexplained payments.

When these findings and questions were put to Simelane, her spokesperson, Tsekiso Machike, said: “The minister has noted your questions which emanate from an unauthorised lifestyle audit you purport to have conducted against her.

“The minister will not be participating in anything or answering any questions that are a product of this campaign that your publications are running against her.”

Simelane declined to contextualise her mismatched income and expenses for the time she was mayor of Polokwane.

On Tuesday this week, hours after Daily Maverick and News24 first published our latest revelations, the Office of the Public Protector confirmed an investigation into Simelane’s Silvanas “loan” and Ramaphosa shuffled Simelane out of the justice department to human settlements.

Money matters 2020/21

Between March 2020 and February 2021, Simelane spent R1.18-million on a bond repayment, paid cash to her children’s accounts, a year’s advance rental payment in Cape Town and the R849,000 Silvanas “loan” repayment. Included is a R75,000 credit card balance, documents linked to her rental application show. All this from her personal company Silvanas Events business accounts.

In the same period, Simelane’s post-tax income as mayor of Polokwane was about R470,000. (Online documents from National Treasury declare that her mayoral package was R1.19-million, including salary, contributions and allowances.)

Simelane further declared R30,000 from her Golden Threads consultancy business and also received R15,280 in honorarium as president of Salga.

From Silvanas restaurant, Simelane claimed to have received zero income.

Yet, the financials of her company, Silvanas Events, registered an opening balance of R336,000 on 30 November 2020. She also had almost R190,000 in her personal bank account, documents linked to a rental application show.

Significant, considering that the R190,000 bank balance required her to save her entire mayoral salary for almost five months. When questioned about the origin of her additional income, Simelane declined to offer insight.

In the absence of additional credit, bonds or loans, circumstances and context are highly suggestive of Simelane receiving external financial help. In September this year, parliamentarians picked up on this discrepancy and asked how she could afford to pay back R849,000 in 2020 when she did not have the money to start her business, which seemed to have been running at a loss for its entire existence under Simelane’s stewardship, in 2016.

It was a prescient question.

Money matters 2019/20

In the preceding year of March 2019 to February 2020, Simelane spent at least R857,000 on her lifestyle – almost double her annual post-tax mayoral salary. (This does not include school and education fees for her children, rates and taxes, family holidays, entertainment and other expenses.)

From her private accounts, she sent R90,000 to service two bonds for property in Mokopane and Polokwane. From her T5 Investment business account, she supplemented her personal needs with another R150,000 towards accommodation rent, and R140,000 for expenses that included legal and architect fees, rates and taxes, groceries, fuel and cellphone bills.

About R500,000 more from T5 Investment, owner of Silvanas Coffee Shop, was pumped into stock, salaries and expenses for Silvanas Coffee Shop.

One of Simelane’s biggest expenses in this year was building works at the vacant stand she bought in 2018, for cash, in an upmarket gated community in Pretoria.

The multi-storey house occupies a lower floor space of about 600m2 and is kitted with a row of solar panels. Simelane declined to explain how she funded the building works.

Her mayoral income in this year may have been far more limited than her known expenses, but T5 Investment had millions in the bank.

On 5 October 2019, the company had an opening balance of R2.82-million. Analysing its additional income (R166,043) and expenses (R618,303) for the month suggests Simelane again received external financial help. She declined to offer context for the origin of T5 Investment’s wealth.

Money matters 2018/19

In the 2018/19 financial year, we gained exceptional insight into Simelane’s spending habits. She appears to have paid for, or may have received, at least R2.89-million worth of assets, luxury clothing and a holiday.

Simelane took ownership of a brand-new black Mercedes-Benz Viano worth R1.18-million. It was bought with cash and then registered in her 78-year-old mother’s name.

Her company T5 Investment also acquired a R1.2-million vacant stand in Pretoria – the same erf on which she started building works in 2019.

In just four months in the same year, she spent R250,000 on Gucci, Louis Vuitton and Christian Louboutin bags and shoes (her mayoral salary in the same four months was R156,000) and at least another R171,000 on a Disney World trip for her family.

Simelane declared zero income from “TS Restaurant”, which seems to be a reference to Silvanas Coffee Shop. In fact, while she was spending R2.89-million on luxuries, her declared income was about R510,000.

Simelane declined to answer questions about these expenses and the suggestion that she received external, undeclared financial assistance while she was mayor of Polokwane.

Lifestyle audit candidate

Daily Maverick and News24’s investigation into Simelane’s questionable financial wealth started with R575,600 cash she took from Gundo Wealth Solutions, a service provider to Polokwane Municipality, to buy Silvanas Coffee Shop in Sandton.

Simelane explained the cash was a “loan”, that it was “above board” and that she repaid all of it.

Under scrutiny, the facts appear to be more complicated.

Corruption-accused businessman Ralliom Razwinane used his company, Gundo Wealth Solutions, as a vehicle to receive unlawful kickbacks from the now defunct VBS Mutual Bank in exchange for cajoling municipalities to illegally invest in the bank, Daily Maverick and News24 revealed.

Gundo Wealth Solutions paid R575,600 to the previous owner of Silvanas Coffee shop – money that proved to be kickbacks directly traced back to VBS. Simelane’s company, T5 Investment Group, took ownership of the coffee shop. Razwinane now faces 13 charges of fraud and corruption, some directly linked to the VBS kickbacks which eventually bought Silvana’s coffee shop.

Four years later, when investigations into VBS and the fixer-municipal-scheme landed on Polokwane Municipality’s doorstep, T5 Investment ostensibly paid back the loan to Gundo Wealth Solutions. As shown in the financial analysis of 2018 to 2021 above, it is not clear what the origins of these funds could be. Silvanas Coffee Shop, on Simelane’s own version before Parliament, was not a particularly lucrative business.

Simelane maintained that there was at no stage any conflict of interest between her, the municipality, Gundo Wealth Solutions or her new job as the executive political head of the National Prosecuting Authority, tasked with prosecuting the sprawling VBS-corruption.

When Daily Maverick and News24 started excavating the facts after Simelane was appointed justice minister in 2024, she claimed there was a contract that legitimised the deal. The contract is, however, suspected to have been backdated – its veracity cannot be trusted.

The evidence unearthed so far, using only data Daily Maverick and News24 can back up with documents, suggests that Simelane is a prime candidate for a lifestyle audit by the revenue service and the Hawks.

This investigation inspired ActionSA’s Athol Trollip to lay a complaint at the Public Protector and a criminal complaint at the police, while the DA’s Glynnis Breytenbach submitted a PAIA request to force Ramaphosa to reveal Simelane’s explanatory report addressing the Silvanas debacle. The Hawks also raided Simelane’s former office at the municipality as part of an investigation, the existence of which Simelane has so far denied.

In the wake of Ramaphosa’s highly criticised reshuffle of Simelane to the Department of Human Settlements, civil society groups released a strong statement this week saying “Simelane should long have stepped down from office”.

The “connect the dots” movement, which includes the Ahmed Kathrada Foundation, Freedom Under Law, Outa, Active Citizens Movement and Defend our Democracy, lamented Ramaphosa’s move during national Anti-Corruption Week (3 to 10 December) and said he is failing to exercise political accountability by playing “musical chairs” with tainted ministers.

“Perceptions of corruption and conflicts of interest cause significant harm to public confidence in governance institutions. If the allegations against minister Simelane were deemed sufficiently serious for her to be removed from the justice portfolio, they are of sufficient seriousness for her to be removed from the Executive altogether,” the statement read.

DA MP Luyolo Mphithi also balked at Simelane now heading a R33-billion budget at human settlements, a department tasked with assisting 13 million South Africans living in informal settlements.

Mphithi said her appointment is a “recipe for disaster”. DM

Read Part One and Part Two here.

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Money matters 2020/21

Money matters 2019/20

Money matters 2018/19

Lifestyle audit candidate