A joint Daily Maverick and News24 investigation revealed how Justice Minister Thembi Simelane took a loan of more than half a million rand from a company that brokered unlawful investments of R349-million into VBS Mutual Bank. (Photo: Brenton Geach / Gallo Images) President Cyril Ramaphosa reconfigured his Government of National Unity (GNU) Cabinet on Tuesday night, announcing that Thembi Simelane would take over as minister of human settlements.
In a statement on Tuesday evening, Presidency spokesperson Vincent Magwenya said Simelane would be replaced by Mmamoloko Kubayi as minister of justice and constitutional development.
The move, Magwenya said, “was to ensure the effectiveness of [the] Cabinet in delivering to its mandate and in accordance with section 91(2) of the Constitution”.
Simelane has increasingly come under fire after a Daily Maverick and News24 investigation in August revealed that in 2016, Simelane received a “loan” from a company that had brokered investments with VBS Mutual Bank.
Read more: Thembi Simelane’s date with destiny will ripple through GNU, EFF, MK and the entire justice system
Simelane used a “commercial loan” of R575,600 from Gundo Wealth Solutions, owned by Ralliom Razwinane, to purchase a coffee shop in Sandton.
Simelane was the mayor of Polokwane Municipality in 2016, when she received the loan and when the municipality unlawfully invested R349-million in VBS, which was brokered by Razwinane. (Razwinane is on trial for fraud, corruption and money laundering for his role as a commission agent connecting municipalities, including Polokwane Municipality, with VBS.)
Read more: Revealed: Simelane’s VBS-linked coffee shop ‘loan agreement’ likely backdated
When VBS was put under administration in March 2018, forensic investigators found it had rewarded Razwinane with kickbacks totalling R24.2-million for being a commissioning agent for various municipalities and state entities through corrupt transactions and contraventions of the Municipal Finance Management Act.
On Tuesday, Daily Maverick and News24 revealed that Simelane lived an extravagant lifestyle in 2018, while she was still mayor of Polokwane, when she spent 569% more than her known annual income. This was less than two years after Simelane had taken the R575,600 “loan” from Gundo Wealth Solutions to pay for a coffee shop in Sandton.
Mounting pressure
Following the allegations contained in Daily Maverick and News24’s exposé, Ramaphosa requested a detailed report and meeting with Simelane in August, over her dealings with VBS Mutual Bank. The President has been under mounting pressure to act against Simelane after the allegations came to light.
Demands for Simelane to respond to the allegations came in thick and fast from all quarters. As justice minister, Simelane oversaw the National Prosecuting Authority (NPA), which is investigating and prosecuting those involved in the looting and collapse of VBS.
The DA and ActionSA repeatedly labelled Simelane’s position as justice minister a conflict of interest and called for her to account before Parliament. The EFF said Simelane must resign in the face of the revelations that she received more than half a million rand from an organisation that brokered unlawful investments with VBS.
Appearing before Parliament’s justice committee in September, however, Simelane was adamant that there was nothing untoward about the private loan of R575,600 she received from VBS.
On Tuesday night, DA MP and spokesperson on justice and constitutional development, advocate Glynnis Breytenbach, said Ramaphosa’s redeployment of Simelane was “short-sighted and disrespectful” to South Africa.
“While the President has finally addressed the untenable conflict of interest of having a minister of justice accused of corruption, his decision to simply move her somewhere else does not address the underlying issue — she stands accused of corruption and is subject to investigations. Human Settlements is a vital department for providing housing to South Africans. It must be led by a credible individual.
“The indecisiveness of the President, who has explicitly committed to fighting corruption, is especially shocking and quite blatantly insincere,” said Breytenbach.
In his light Cabinet reshuffle, Ramaphosa also appointed Phumzile Mgcina, who was serving as the deputy minister for labour and employment, as the deputy minister of mineral and petroleum resources. Judith Nemadzinga-Tshabalala was appointed as the deputy minister of employment and labour. DM