Media Statement: Justice and Constitutional Development Committee Conducts ‘Aggressive Oversight’ on VBS Allegations

The Portfolio Committee on Justice and Constitutional Development today held a lengthy, thorough and frank engagement with the Justice and Constitutional Development Minister, Ms Thembi Simelane, on the allegations relating to a VBS Mutual Bank loan.

Committee Chairperson Mr Xola Nqola said members of the committee take their responsibility of holding the executive to account extremely seriously. “You could see from the engagement that members are robust, aggressive in line of questions, prepared and wanted answers. At the same time, the Minister was eloquent and did not shy away from responding to those robust questions.”

Mr Nqola said the Minister took the committee into her confidence about the loan and reiterated that it was not a kickback but rather a loan that she fully repaid. “This was a crucial matter and the committee, the country, needed clarity on it,” he said.

The Minister informed the committee that she wanted to purchase a coffee shop and intended to withdraw from her retirement savings to do so. However, when she understood the tax implications of this course of action, she realised it did not make financial sense to do so. She then approached Gundo Wealth Solutions, which indicated that it could provide a loan for the purchase. The minister explained that although she was mayor of the Polokwane Municipality at the time of the loan, Gundo Wealth Solutions was not one of the municipality’s service providers.

The committee heard that the Minister was unaware that Gundo was not a registered financial service provider. She emphasised that she took a loan from Gundo and not VBS Mutual Bank.

The Minister assured the committee that she did not have an improper relationship with Mr Ralliom Razwinane, the owner of Gundo Wealth Solutions, who has since been arrested on corruption charges relating to VBS Mutual Bank. The Minister went on to say that she did not receive any improper benefits from the loan contractor.

The Minister does not own the coffee shop anymore and told the committee that she closed it when the lease was up for renewal during the Covid-19 pandemic.

The committee also questioned her about perceptions of a conflict of interest in relation to her influence over the National Prosecuting Authority to prosecute those accused of VBS-related corruption, which has the potential to undermine public confidence in the justice system. The Minister assured committee members that she will make sure that the conflict of interest does not arise. She pointed out that the Minister does not decide who to prosecute and not to prosecute.

Mr Nqola said the committee has a responsibility to conduct “aggressive oversight” over VBS prosecutions. He highlighted that it is not illegal to enter into a loan contract with a juristic person, even if they are not a registered loan provider.

In closing, he said the committee will obtain a legal opinion from the Parliament Legal Services on whether the committee can have access to the loan agreement between the Minister and Gundo Wealth Solutions.

Distributed by APO Group on behalf of Republic of South Africa: The Parliament.