Minister of Justice Thembi Simelane is in a difficult situation. (Photo by Brenton Geach/Gallo Images via Getty Images)
Embattled Justice Minister Thembi Simelane's office confirmed on Thursday that he had been questioned by the ANC's Integrity Commission over personal loans he received from intermediaries in the VBS Mutual Bank scandal.
Ministry of Justice spokesperson Tsekiso Matike said the press conference took place as scheduled on Wednesday, but that he could not comment on the content of the discussions.
The commission's chairman, Reverend Frank Chikane, spoke on when the ANC might consider the report from the commission, when the national executive committee met next to the party's national spokesperson. Mentioned the question. He didn't respond to messages.
However, a well-placed source said it was safe to assume that Mr. Simelan was repeating the account of events he gave to parliament's Judiciary Committee on September 6.
At the press conference, she dismissed any suggestion of a conflict of interest, despite her oversight powers as justice minister of the National Prosecuting Authority (NPA), which is investigating cases arising from the bank's collapse in 2018.
These findings revealed that Gundo Wealth Solutions received large profits in return for soliciting deposits from local governments.
In terms of public financing laws, local authorities are not allowed to deposit funds with mutual banks, but the City of Polokwane deposited more than R300 million this way in 2016 and 2017.
The deposits were allegedly solicited by Lariom Razwinen, who owns Gundo Wealth Solutions, and is facing corruption charges, some of which reportedly relate specifically to the withdrawal of funds from municipalities.
The minister stressed that he had accepted the loan from Gundo Wealth Solutions and not from VBS, and that the company was not a registered service provider of the municipality and had not received a cent from it.
Mr Simelane said he had repaid R849,000 of the R575,600 loan he took out to buy a coffee shop in Sandton and was allowed to repay it over four years.
MPs said this did not answer the obvious question of why she sought personal financial advice from an entity doing business with Limpopo City, where she was mayor at the time. .
They expressed bewilderment that when she needed a loan to buy a coffee shop, she would accept an interest rate of almost 50% instead of approaching a bank for a loan.
Simelane said that despite his efforts, he was unable to obtain better terms elsewhere.
She told MPs that she repaid the loan from her family's business account to Mr Gundo's Nedbank account in three installments between October 2020 and January 2021.
She did not provide evidence of the payments to the committee, but said she did so in her report to President Cyril Ramaphosa on the matter. The presidential palace announced two weeks ago that it was considering the minister's report.
Meanwhile, ANC secretary-general Fikile Mbalula told the media that the integrity commission would recommend what should happen to the national executive committee and that the party would review Mr Simelane's events in accordance with established processes. .
“She will appear before the Integrity Commission. The Integrity Commission will receive her full account of what actually happened and then make a recommendation to the National Executive Committee on what should happen to Comrade.” That's where we are. There are checks and balances within the party,” Mbalula said earlier this month.
But senior ANC officials said the president could and should make a decision on the minister's future without waiting for the internal party process to develop.
By waiting, Ramaphosa is wasting an opportunity to take the moral high ground and restore some public confidence in the party.
“She is a minister. He has the power to appoint and dismiss members, independent of anyone in the ANC, even from a realpolitik point of view, especially at a time like this.”
The president risked giving the impression that decisions would come from his party, not him, the people said.
“And time just ticks by. We're really messing up any chance of regaining trust…If you really want public trust, you'll act quickly.”
The source said senior Limpopo party leaders were also anxious for the ANC to deal decisively with all other individuals implicated in the scandal.
Last month, former Limpopo ANC treasurer Danny Msiza and former youth league leader Kabelo Matsepe successfully applied to the High Court to have their trial separated from that of the other defendants.
VBS was robbed of more than R2 billion by bank officials who falsified its financial statements for the year ended March 2017 to make it appear that the business was solvent when it was not.
The bank collapsed the following year after its coffers were depleted by a fraudulent scheme in which funds were funneled from suspense accounts to officials and their families.
A leaked affidavit by Chiphiwa Matozi, the bank's former director, says local government officials were offered loans in exchange for persuading local governments to deposit large sums of money with the bank. He has been jailed for stealing R1.9 billion.