President Cyril Ramaphosa. Photo: Dwayne Senior/Getty Images
President Cyril Ramaphosa on Wednesday signalled concern about the allegations linking justice minister Thembi Simelane to the VBS scandal and asked her for a full report on it.
“President Cyril Ramaphosa has noted with concern media reports containing allegations of corruption against the minister of justice and constitutional development,” the presidency said in a statement.
“The president has requested a detailed report and briefing from the minister on the matter.”
This comes after reports that the municipality made unlawful investments in VBS Mutual Bank in 2016, during Simelane’s tenure as mayor of Polokwane.
A forensic report by advocate Terry Motau found that VBS, historically a small lender and a depositor for retailers and stokvels, had embarked on a campaign to attract substantial deposits from municipalities through a system of paying “commissions”.
“This, in many instances, included the payment of bribes to various public officials who were in a position to influence the making of such deposits,” he wrote in 2018, the year the bank collapsed, in the report commissioned by the South African Reserve Bank.
Simelane has confirmed that she received a loan of R575 000 from the company that brokered the municipality’s investment into the bank, Gundo Wealth Solutions, which was owned by Ralliom Razwinane. He has been accused of receiving kickbacks from the bank for brokering investments from municipalities.
In hot water: Thembi Simelane has come under scrutiny for taking a loan from a company embroiled in the scandal that triggered VBS Bank’s collapse. (Photo by Sharon Seretlo/Gallo Images via Getty Images)
The minister said it was a commercial loan that she had used to buy a coffee shop and had since repaid it in full.
But the information has caused unease within government circles and prompted calls for Simelane to provide more information.
Democracy advocacy group Freedom Under Law noted that the minister has not provided proof of the loan agreement or settlement.
“Further questions arise too — even if there was a loan which was settled in full, the facts in the public domain raise serious questions about whether it was appropriate for the minister to have entered into such a loan in the first place, considering the apparent connection to unlawful deposits into VBS bank by the same municipality in which she was mayor,” it said.
It stressed that Simelane carried political responsibility for key law enforcement agencies, including the National Prosecuting Authority, at the forefront of the state’s fight against corruption.
These are also involved in investigating and prosecuting the collapse of VBS bank itself.
“South Africa has, on far too many occasions in recent years, suffered the effects of compromised individuals having a negative impact on the justice sector, and from the ravages of corruption,” Freedom Under Law said.
“We therefore call for the minister to account fully for her involvement in the incident. It would be untenable for such serious allegations against a minister in such an important portfolio to remain unanswered.”
ActionSA’s Athol Trollip said, given Simelane’s influence over the National Prosecuting Authority, the public protector must determine whether her involvement in the transaction is a conflict of interest or if it violates ethical codes.
“I am of the view that the integrity of our justice system is at stake if the person tasked with upholding the law is potentially compromised by involvement in unlawful transactions linked to one of the most egregious corruption scandals that stole from the most vulnerable.”
“Consequently, I am raising this issue as it demands immediate and thorough investigations to preserve the credibility and impartiality of our justice system,” he said.
The Democratic Alliance has also said that the minister must answer the allegations before the justice parliamentary portfolio.
“At the very least, the minister needs to be brought before parliament to account for what measures she intends to put in place to manage the glaring conflict of interest between herself as minister of justice and constitutional development and her role involving the [National Prosecuting Authority], which must surely be investigating the minister and this transaction,” it said.
The Economic Freedom Fighters is calling for Simelane’s immediate resignation as justice minister, adding that she cannot be trusted with the responsibility of overseeing justice in South Africa.