By Thabo Mosia
Minister of Justice and Constitutional Development, Thembi Simelane, has denied claims that she benefited improperly from a loan linked to the now-defunct VBS Mutual Bank. Speaking before Parliament’s Portfolio Committee on Justice and Constitutional Development, Simelane addressed the allegations that surfaced last week regarding a loan she received during her tenure as Mayor of Polokwane Municipality in Limpopo. It is alleged that Simelane secured a loan of R575,600 from Gundo Wealth Solutions, a company closely tied to VBS Mutual Bank.
Simelane firmly stated, “I did not have any improper relationship with the contractor appointed by the municipality. Mayors are never involved in procurement processes. The work of appointing service providers is the responsibility of the executives in the municipality.” She further clarified that Gundo Wealth had been appointed through legitimate council committee processes and that she did not receive any improper benefits from the company.
Addressing Allegations of Impropriety
Simelane explained that the loan in question was taken to finance a business venture—a coffee shop—as a potential income stream after leaving public office. She explained that her initial plan was to withdraw funds from her retirement savings, but high tax implications made that option impractical. After seeking financial advice from Gundo Wealth, she was introduced to a loan product, which she accepted and later repaid in full over three instalments .
Simelane also rejected any conflict of interest regarding her current role as Minister of Justice and her oversight of the National Prosecuting Authority (NPA), which is handling the investigation into the VBS Mutual Bank scandal. She reiterated, “The office I hold does not have a direct relationship in instructing or influencing the NPA on who to prosecute or not.” Simelane assured the committee that the loan had no bearing on her duties, stressing her full cooperation with Treasury investigations .
Steps Taken as Mayor
Simelane also highlighted her proactive role as mayor during the early stages of VBS’s decline. She told the committee that she had acted on the advice of technical experts within the Polokwane Municipality and initiated the withdrawal of the municipality’s investments from VBS even before National Treasury’s directive came into effect. She insisted that, as mayor, she fully participated in the Treasury-led investigations into municipal investments in VBS .
Broader Implications
Despite her clarifications, Simelane continues to face scrutiny, with opposition parties and some civil society organisations calling for her resignation. President Cyril Ramaphosa has also requested a formal report from the Minister regarding the allegations. However, Simelane remains firm in her stance, maintaining that there was no wrongdoing on her part and that she had always acted with integrity during her tenure as mayor .
The VBS Mutual Bank scandal continues to reverberate across South Africa, as investigations into the looting of more than R2 billion from the bank unfold, leading to several arrests and convictions of those involved. Simelane’s case remains a focal point in the broader inquiry into corruption linked to VBS and municipal investments .
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