Justice Minister Thembi Simelane recently drew a comparison between her loan from Gundo Wealth Investments and borrowing money from a friend or family member.
Simelane appeared before Parliament on Friday to discuss her financial dealings with Gundo Wealth Solutions, a firm that has been implicated in receiving illicit funds from VBS Bank.
The Loan Controversy
Simelane took a R575,600 loan from Gundo Wealth Solutions in 2016 while serving as the mayor of Polokwane.
The company, owned by Ralliom Razwinane, is currently facing serious charges, including fraud, corruption, and money laundering related to the VBS Bank scandal.
At that time, Gundo was engaged with the municipality in managing a questionable investment deal with VBS, which saw Polokwane unlawfully invest R349 million in the bank.
Parliament’s Response
During her parliamentary appearance, Democratic Alliance MP Damien Klopper challenged Simelane’s analogy, arguing that borrowing from a family member is quite different from dealing with a service provider linked to government funds.
Simelane claimed she repaid the loan with 47.5% interest, but did not provide MPs with documentation or a loan agreement to verify her claims.
Simelane’s Defense
Simelane maintained that she believed Gundo Wealth Solutions was a legitimate financial service provider.
She asserted that she had repaid the loan with a total of R849,000 by 2002, but admitted she did not have immediate proof of this payment or a loan agreement.
She mentioned that these documents are included in a report requested by President Cyril Ramaphosa last week.
Department of Justice Statement
In response, the Department of Justice and Constitutional Development released a statement affirming Simelane’s claims.
They noted that Simelane had repaid the principal in three installments, along with over R250,000 in interest.
The statement confirmed that proof of payment exists and has been provided.
Distancing from VBS
Simelane also made a point of clarifying her separation from the VBS Bank scandal.
She emphasized that her contract was solely with Gundo Wealth Solutions, not with VBS.
While she expressed regret for the negative impact on VBS depositors, particularly pensioners in Venda, she sought to distance herself from any direct involvement in the bank’s downfall.
What’s Next?
With these clarifications and defenses, the next steps will likely involve further scrutiny and verification of Simelane’s claims, as well as continued investigation into the broader implications of the VBS scandal and its impact on all involved parties.
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