Minister of Justice and Constitutional Development, Thembi Simelane, says she did not have any improper relationship with a contractor appointed by the Polokwane Municipality.
Last week, allegations surfaced in the media that Simelane, while she was Mayor of Polokwane Municipality in Limpopo, received at least R575 000 in a loan from a company intimately linked to VBS bank.
“I did not have any improper relationship with the contractor appointed by the municipality. Mayors are never involved…in procurement. The work of appointment of a service provider is the responsibility of the executives in the municipality.
“[Gundo Wealth] were appointed to provide services through a procurement process and this was done through committees of council. I did not receive any improper benefits from the contractor,” she said.
The Minister appeared before Parliament’s Portfolio Committee on Justice and Constitutional Development to present clarity on allegations of impropriety on her part related to VBS Mutual Bank.
On the issue of whether or not there is a conflict of interest in her position as Minister and the National Prosecuting Authority (NPA) – which is prosecuting the VBS Mutual Bank saga – the Minister said the department plays no role in the decision-making of the NPA on who to prosecute or not.
“The office I hold 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 have dealt with the conflict of taking the loan. My understanding is that, if you ask for assistance on someone who doesn’t have a direct bearing or payment with the municipality, it is possible and I repaid it,” she said.
Simelane explained that the loan was for a business that would create wealth for herself and family after she leaves public office.
“Political positions by their very nature are short term and necessitated me to investigate a feasibility [study] of commencing such a business and a coffee shop seemed a feasible option so that I could create an employment opportunity for myself and my next of kin.
“I made this consideration…to ensure that I have an alternative when the public office life comes to an end,” she said.
The Minister said she had initially intended to partially withdraw from her retirement savings to fund the coffee shop but the “percentage of tax made the idea not feasible”.
“I asked Gundo for advice on any other idea on how best I could get finance and I was advised against the withdrawal of the retirement savings. In those discussions, Gundo then informed me and advised of a loan product that they have that I could access.
“In consideration for the options…there existed no conflict in my view is securing a loan from Gundo. I took a decision to proceed with the business,” Simelane said.
She added that the loan was repaid over three instalments.
Treasury steps in
Simelane told the committee that as the beginning of the decline of VBS Mutual Bank began to set in, National Treasury told municipalities that it was a breach of regulations to invest in mutual banks.
The Minister said she had already taken steps to ensure that the municipality withdraws from VBS, even before the directive from Treasury.
“[On] the advice of technical experts within the municipality, myself as the mayor, instituted the withdrawal of Polokwane Municipality from VBS. My attitude at the time was, if there was anything improper with regard to municipality funds, it must be stopped,” she said.
A Treasury-led investigation into municipal investments at the bank began after that – a process the Minister insists she “fully participated” in. This was followed by a report.
“That report didn’t spare me as the Executive Mayor from corrective measures. The…sanction to us was to either go to University of Pretoria or University of Witwatersrand which are the only ones that offers…a programme which is designed by National Treasury which is called Municipal Management [Programme].
“I took this corrective measure very seriously [and] commenced with my studies the following year when universities opened. I concluded this programme…after I was no longer a mayor, when I was a Deputy Minister,” she said.
Turning back to the matter between the municipality, her loan and VBS Mutual Bank, Simelane re-emphasised that she received no improper benefits.
“[I] affirm that one: there was no improper relationship. I requested for a loan, a loan was advanced.” –SAnews.gov.za
