Thembi Simelane denies ‘improper relationship’ with VBS fixer

Embattled Justice Minister Thembi Simelane has denied that she benefitted from the Venda Building Society (VBS) mutual bank.

On Friday, Simelane appeared before Parliament’s Portfolio Committee on Justice to account for allegations that she funnelled millions into the now-defunct VBS bank when she was the mayor of Polokwane in 2016.

Watch: Thembi Simelane appears before Justice Portfolio Committee to give answers on the ‘coffee shop loan’

‘Commercial loan’

Simelane presented her report and statement to members of parliament.

She allegedly took a R575,600 “commercial loan” from Gundo Wealth Solutions, a company that brokered unlawful investments of R349 million by the Polokwane Municipality into the now-defunct VBS Mutual Bank.

Gundo Wealth Solutions is owned by Ralliom Razwinane.

Simelane used the “loan” to buy a coffee shop in two transactions in October 2016. The payments appear linked to kickbacks received in exchange for large deposits by Polokwane Municipality into VBS.

ALSO READ: Thembi Simelane ‘may not survive’ VBS allegations – analyst

‘I did not have an improper relationship’

During the briefing, Simelane denied having an improper relationship with Gundo Wealth Solutions hired by the Polokwane municipality.

Simelane said Gundo was not a service provider of the municipality.

“It is a matter of public record that Polokwane municipality invested money into VBS bank during my tenure. No money was paid by Polokwane Municipality to Gundo Wealth Solutions. I did not have an improper relationship with a contractor employed by the municipality.”

She said councillors are not involved in making investments on behalf of the municipality.

“Polokwane’s officials were involved in making the investment with VBS. All contracts that the Municipal Manager made must be reported to council.”

Conflict of interest

Simelane said she repaid the coffee shop loan.

“I would like to affirm that there was no improper relationship, I requested for a loan, a loan was advanced.,” she said.

“Much has been said about the conflict of interest to the position I now hold. The Department of Justice and Constitutional Development plays no roles in decision-making by the NPA (National Prosecuting Authority) on who to prosecute or not,” Simelane said.

Loan repaid

Simelane added the office she holds, does not have a direct relationship in “instructing or convincing”  the NPA on how to act on their mandate.

“On the matter of taking the loan, I’ve dealt with the allegations of conflict and my understanding was that if you ask for assistance on someone who does not have a direct bearing or payment from the municipality, it is possible and I repaid it back.

“When the president informed me that he is assigning me to this department, the issue of conflict of interest that crossed my mind was not this issue. It was an issue that I am on behalf of my family been sitting in court on the case on behalf of my sister that the NPA has placed charges on allegations of murder. That’s what crossed my mind,” Simelane said.

‘My contract was with Gundo’

Simelane said her understanding was that Gundo was a registered financial service provider.

“I loaned from Gundo, not from VBS. My contract was with Gundo, not VBS.”

Simelane said the contracts and proof of payment are in her report to President Cyril Ramaphosa

ALSO READ: Thembi Simelane VBS matter will ‘not be swept under the carpet’ – Ramaphosa

Hawks search and seizure

Meanwhile, the Hawks executed a search and seizure warrant on Simelane’s former personal assistant, based at the Polokwane municipality, last week to secure possible evidence of corruption linked to the municipality’s R349 million investment with VBS Mutual Bank in 2016 and 2017.

A copy of the warrant, dated 29 August 2024, and a copy of the affidavit filed by Colonel Anton White of the Hawks in Limpopo in support of the warrant reveals that a case relating to the R349 million the Polokwane municipality invested with VBS between 2016 and 2017 was registered in November 2019 according to Daily Maverick.

The investigations focused on a possible violation of the Municipal Financial Management Act, possible corruption and possible money laundering in alleged contravention of the Prevention of Corrupt Activities Act.

Razwinane, the owner of Gundo Wealth Solutions which paid for the coffee shop “loan” has been arrested.

He stands trial on 13 counts of corruption as part of the main criminal case around the R2 billion theft that collapsed the bank in early 2018.

Razwinane was charged with two offences linked to commissions paid to his company, Gundo Wealth Solutions, by VBS in exchange for securing investments from the Polokwane municipality.

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