By Thabo Mosia
Johannesburg’s MMC for Community Development, Kabelo Gwamanda, has been placed on precautionary leave following his recent arrest on charges of fraud. City Mayor Dada Morero made the decision to relieve Gwamanda of his duties in response to the serious nature of the allegations against him. Gwamanda, a former mayor of Johannesburg, is accused of running a Ponzi scheme through his business, iThemba Lama Afrika, which operated a funeral insurance scam in Soweto.
The arrest stems from a scheme dating back to 2011-2012, in which Soweto residents were allegedly tricked into paying for funeral insurance policies. The scheme collapsed, leaving victims without their money or the promised services. One victim, who filed a formal complaint earlier this year, claimed that after paying into the policy, the company’s offices disappeared when it was time to claim the benefits. The Financial Sector Conduct Authority (FSCA) initiated an investigation into Gwamanda’s business following these reports, although no formal conclusion has been reached yet.
Mayor Morero, in his statement, expressed that it was vital to act quickly to protect the integrity of the city’s governance. He emphasized the importance of maintaining public trust and ensuring that these allegations do not impede service delivery. Gwamanda’s arrest has prompted widespread public scrutiny, and Morero has assured residents that an acting MMC will be appointed to ensure continuity in service delivery during Gwamanda’s leave.
This development follows a series of legal and public controversies surrounding Gwamanda. In May 2023, when the allegations first came to light, his party, Al Jama-ah, defended him, claiming that the accusations were part of a political smear campaign by opposition parties. However, with the arrest and subsequent investigations, public pressure mounted, forcing Morero to take decisive action.
Gwamanda has since been released on bail, but the case against him remains active. As the investigation continues, many have expressed concerns over the potential impact on the city’s administration, with political parties like the Democratic Alliance (DA) calling for swift legal proceedings and greater accountability. Some residents, still reeling from the financial losses caused by Gwamanda’s alleged scam, have voiced their desire for justice.
Despite these challenges, Gwamanda’s political allies continue to stand by him, dismissing the charges as “cheap politicking” aimed at undermining the city’s leadership. However, the city’s executive team, led by Mayor Morero, has taken a more cautious approach, opting to place Gwamanda on leave while the legal processes unfold. The FSCA’s ongoing investigation will be crucial in determining the outcome of this high-profile case.
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