The Justice and Constitutional Development Minister Thembi Simelane said she has fully repaid the loan she received from Gundo Wealth Services when she was still the Executive Mayor of the Polokwane Local Municipality in Limpopo in 2012.
This after it emerged that she borrowed R575 000 from the company, which brokered a R349 million investment deal between the municipality and the now defunct VBS Mutual Bank in 2016 and 2017.
Simelane was speaking during her appearance before the department’s Portfolio Committee to answer questions regarding the matter.
“I made the first payment on that day, on the 9th of October 2020.
And again, on the 12 of November and the final one, totalling around R849 000 with an interest calculated at about 11.2 or so percent at the time.
So, an access of about R250 000 was the interest that was paid to Gundo,” said Simelane.
The minister said she borrowed the money to buy a coffee shop in Sandton, “to create employment opportunities for myself and my next-of-kin.”
It has since emerged that Gundo was not a registered financial service provider, but Simelane said she and the municipality were not aware at that time when they conducted business transactions with the company.
The minister said the municipality decided to withdraw the investment from VBS, once allegations of fraud and corruption emerged at the bank.
“Considering that the Polokwane Municipality didn’t incur any losses, and I as a mayor was proactive enough to order the withdrawal of investment even before the national treasury wrote to us.
The council’s money was paid back with interest into the municipal account,” explained Simelane.
Despite this, the minister said her deal with Gundo was not let off the hook by the municipality, as it recommended that she undergo remedial action.
“The report didn’t spare me as the executive mayor from corrective measures.
It recommended that corrective action be considered against me, in that I failed to comply with section 52 of the municipal financial management act,” said Simelane.
In addition, the minister apologized for accepting a loan from VBS.
“I regret the cause, the harm it has caused the people of Venda in particular.
Mostly the beneficiaries of the bank and the depositors were coming from Venda.
I’m not saying it’s an action where if I look back in hindsight, I don’t think one should have done things differently.
No, hindsight is a bad side, one would have done things differently.
But I had no knowledge of the mechanics of the bank inside,” apologised Simelane.
The minister said the loan was declared to the municipality during her tenure, when she joined parliament, and the contracts and proof of payment is in her report that she sent to President Cyril Ramaphosa.
This however didn’t go well with most of the opposition members of parliament, who requested that she step aside or resign from her position, citing conflict of interest.
Simelane sought to clarify that she is not involved in prosecutorial decisions made by the National Prosecuting Authority (NPA).
“The Department of Justice and Constitutional Development plays no role in decision making by the NPA on whom to prosecute or not.
The office I hold does not have a direct relationship in instructing or convincing NPA how to act on their mandate,” explained Simelane.
The minister is scheduled to meet Ramaphosa on a date to be announced to provide further details on the issue.
