Former Johannesburg mayor and current MMC of Community Development, Kabelo Gwamanda, has found himself in the spotlight once again.

This time, it’s not for his political activities but for his alleged involvement in a Ponzi scheme dating back a decade before his political career began.

On Friday, 18 October, he was taken into custody, drawing fresh attention to allegations that have long shadowed him.

Details Surrounding the Arrest

Gwamanda’s arrest was confirmed by his political party, Al Jama-ah. According to the party, the Gauteng Provincial Hawks Commercial Crimes Division invited Gwamanda to present himself at the Protea North SAPS.

He complied, leading to his formal arrest and a charge of fraud.

Later that day, Gwamanda appeared before a judge and was granted bail, with further investigations underway.

Al Jama-ah Reacts to the Timing

Al Jama-ah expressed surprise at the timing of the arrest, noting that it coincided with Gwamanda’s recent appointment to the GNU Clearing House Committee.

It also came on the eve of a controversial street renaming, adding fuel to speculation about the motives behind the arrest.

The party stressed the importance of applying the rule of law fairly and emphasized that the case has yet to be tested in court.

Advocate Yusuf Khan Dalwai, speaking on behalf of Al Jama-ah, praised Gwamanda for his cooperation throughout the legal process, commending him for his courage during this difficult time.

The Backstory: Allegations Against Gwamanda

The accusations against Gwamanda are not new.

When he was elected mayor in 2023, Mpho Phalatse, a DA councillor, accused him of running a fraudulent Ponzi scheme.

Al Jama-ah demanded a retraction from Phalatse, but instead, she pushed forward with legal action.

In addition, the Financial Sector Conduct Authority (FSCA) launched an investigation into Gwamanda’s burial scheme, Ithemba Lama Afrika, after receiving complaints.

The FSCA clarified that the investigation itself does not imply guilt but is part of their process to determine if any financial sector laws were violated.