Justice Minister Thembi Simelane addressed Parliament on Friday, denying any wrong-doing regarding the controversial VBS scandal and a loan she had taken to buy a coffee shop.
Taking the stand before the Justice Portfolio Committee in Parliament, Simelane said she would be dealing with issue of whether she acted improperly or could have made better decisions during her tenure as executive mayor of Polokwane Municipality.
During her opening remarks, Simelane said it was public knowledge that Polokwane municipality invested money in VBS during her tenure as executive mayor.
“But what is not amplified, that on the advice of technical experts within the municipality, myself as the mayor, instituted the withdrawal of Polokwane Municipality from VBS.
“My attitude at the time was, if there was anything improper with regard to municipality funds, it must be stopped.”
She said this withdrawal was done two months before National Treasury instructed all municipalities who were investing in VBS to withdraw their investments.
Simelane said the published allegations are centred around two questions; whether she had an improper relationship with the appointed contractor while she served as mayor, and whether she received financial benefits from the same contractor.
Simelane said she did not have any improper relationship with the contractor appointed by the municipality.
In providing context, Simelane said mayors are never involved in procurement.
“So the work of the appointment of a service provider is the responsibility of executives in the municipality.”
She said in this case, an advert was placed and a supply chain process was done and Gundo Wealth Solutions was appointed as the investment manager, financial adviser to the municipality for a period of three years.
“This advisory work was taken at no financial cost to the municipality, meaning it was not a tender.
“It was an unsolicited bid where you work at the commission you are receiving. There was no money paid from Polokwane Municipality to Gundo.”
She said the next question was whether she had relations of any kind with Gundo Wealth Solutions.
“Did I receive any improper benefits? I did not receive any improper benefits from the contractor as indicated.”
The allegedly corrupt investment brokerage was owned by Ralliom Razwinane, who is currently on trial for fraud, corruption, and money laundering related to his role in facilitating connections and dodgy investments between several municipalities and the VBS Mutual Bank.
In providing context, she said when one is appointed in public service, in which she spent 15 years, political position are by nature “short term”.
“I wanted to invest in a coffee shop. I wanted to create employment opportunities for myself and my next-of-kin,” she said.
Simelane said the coffee shop employed between eight to 12 people.
She said she initially wanted to withdraw from her pension fund, but decided against it due to tax implications.
Simelane said her pension at the time was worth around R800,000.
She said this is when Gundo advised her about a loan product that they have that she could access.
“I took a decision to proceed with the business.”
In September 2016, Simelane said she concluded with the registration and went on to purchase the coffee shop from Ricovert.
She said R575,600 was paid to Ricovert by Gundo Wealth Solutions which was paid in three instalments.
“T5 and Golden Threads carried the establishment of the coffee shop.”
She said in October 2019, Silvana’s Coffee Shop was operational and running above board.
She said she paid over R800,000 in 2020 with an interest rate of 11% to Gundo Wealth Solutions for the loan.
Simelane said there was no improper relationship, she requested for a loan and a loan was advanced.
“Much has been been said about the conflict of interest with the position I now hold.
“The Department of Justice plays no role in the decision making by the NPA in who to prosecute.
“The office I hold does not have a direct relationship in instructing or convincing the NPA on how to act on their mandate.
“On the matter of taking the loan, I have dealt with allegations of conflict, my understanding, if you ask for assistance for someone who doesn’t have a direct bearing, it is possible and I repaid it back.
“When the president told me he was assigning me to this department, the issue of conflict of interest crossed my mind, it was not this issue.
“It was a issue that I am sitting in court on a case of my sister, in which the NPA has placed murder charges.”
This relates to Simelane’s sister, Nokuthula, who was murdered in 1983 in an alleged apartheid political killing.
She said she discussed it with President Cyril Ramaphosa and both came to a conclusion that it is a matter that is already sitting in court and she had no say in it, as it was a matter that will be concluded in the courts.
“I decided to accept the position to put the people of South Africa first,” she said.
Simelane said she was always willing to cooperate.
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