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South African Labour Minister Calls for Judicial Review of UIF's R5bn Investment

Published September 21, 2023
9 months ago

South Africa's Employment and Labour Minister, Thulas Nxesi, has demanded a judicial review of the Unemployment Insurance Fund's (UIF) contentious award of a R5bn investment into Thuja Capital, a company which at the time of the award only existed on paper. The actions for the review and the likely rescinding of the award come on the back of an investigation by Sunday Times into this controversial transaction.

Nxesi's office recently ratified the existence of a comprehensive 225-page forensic report detailing the proposed R5bn deal. The report contains damning findings, citing that the UIF bypassed standard procedures and protocols during the negotiation process.

The investigation follows a December 2020 report from the Sunday Times, discussing a scheme that would have benefited Mthunzi Mdwaba, Chairman of the board for Productivity South Africa and his musician son, a director at Thuja Capital.

In an initial reaction to the Sunday Times report, UIF commissioner Teboho Maruping and Thobile Lamati, the Director-General of the Department of Employment and Labour, defended the decision. They claimed that the investment aimed to influence established companies to offer more training and employment opportunities. However, this explanation didn't address the bypassing of usual processes and the risk associated with trusting an "untested concept" with such an investment.

Alongside the move to reverse the UIF funding decision, Nxesi has also requested personnel involved in the transaction to start "consequence management", a protocol to hold them liable for any discrepancies in the contract awarding process.

Nxesi's office has stated further measures drawn from the forensic investigation's recommendations that will be implemented. These changes include more comprehensive due diligence for future proposals and a new declaration system for officials on procurement and evaluation committees.

Reports claim Nxesi has shared a copy of the report with South African President Cyril Ramaphosa, which further hints at the gravity of the situation. 

This story is still developing and will be updated as further responses from Mdwaba, Lamati, and Maruping become available.

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