Nxesi fails to get gag order as case to cancel R5 billion UIF deal postponed to next year

The court case between the Department of Labour and Employment and businessman Mthunzi Mdwaba has been postponed to next year.

This is in relation to the R5 billion job creation deal between Mdwaba’s company Thuja Capital and the Unemployment Insurance Fund (UIF).

‘Unsupported lies’

Labour and Employment Minister Thulas Nxesi last month filed an urgent application with the Gauteng High Court in Pretoria, seeking to set aside the contract.

In his papers, Nxesi argued that the agreement was in breach of the Public Finance Management Act (PFMA) as it was signed without the knowledge of the National Treasury or Cabinet.

The minister also sought an interdict to stop Mdwaba from “promoting his campaign of false and unsupported lies”.

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The litigation was followed by Mdwaba accusing Nxesi and other high-ranking government officials of trying to solicit a bribe from him.

Finance Minister Enoch Godongwana and Higher Education Minister Blade Nzimande as well as African National Congress (ANC) secretary-general Fikile Mbalula have also been implicated by Mdwaba.

The Thuja Capital CEO alleged that the UIF project was expected to pay out a 10% bonus of R500 million in kickbacks to the politicians.

The three Cabinet Ministers and Mbalula have denied Mdwaba’s allegations.

Pre-hearing timetable

On Wednesday, the Gauteng High Court in Pretoria adjourned the matter until 25 January 2024 after Mdwaba’s lawyers asked for a postponement.

His legal team argued that they were not afforded enough time to respond to Nxesi’s application.

Speaking to Newzroom Afrika outside the court, Mdwaba’s attorney, Khumisi Kganare said the minister’s papers were not served to his client properly.

“The timelines that were given to all the respondents were not practical because we did not agree we had to come get a directive from the high court to say let’s work on a pre-hearing timetable that will regulate how and when answering papers are going to be filed by the respondents. There’s about eight respondents in this matter. [The timetable will state] also until when the minister will be given an opportunity to file his replying affidavit and everything else that follows like your heads of arguments,” he said.

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Kganare explained that the judge did not want to deal with the issue of urgency regarding the application.

“She said she will leave it for the next judge to determine that.”

The attorney further confirmed no interdict was issued for the minister.

“What was problematic for our client was that the minister also wanted a gag order against him so we had to also deal with that issue to say if there is a gag order then let it go two ways, meaning it must apply to all litigants involved or we have a situation where there is no gag order at all. There’s a general rule that applies to litigants when a matter is under judicial consideration that in this instance you are not allowed, as a litigant, to go public in respect of the merits of the case.

“Now we have a directive from the high court that says there’s no gag order against our client… in fact there’s no gag order against everyone involved so we expect the sub judice rule to apply to everyone,” he added.