Justice Minister Simelane Grapples with VBS Allegations Amidst Parliamentary Scrutiny

The inquiry concerning Justice and Constitutional Development Minister Thembi Simelane and her alleged connections with the collapsed VBS Mutual Bank continues to unravel in the limelight of South African politics. Amidst growing demands for her resignation to facilitate a rigorous investigation, Simelane’s appearance before Parliament raised more questions than answers, intensifying the spotlight on her past dealings and current position.

During her recent testimony to the Justice Portfolio Committee, Minister Simelane was confronted with her links to Gundo Wealth Solutions, the company implicated in the channelling of governmental investments into the ill-fated bank. These investments, amounting to approximately R2-billion and made by various Limpopo, North West, and Gauteng municipalities, have become the center of scrutiny following VBS's 2019 collapse. Findings from a forensic investigation led by Advocate Terry Motau on behalf of the Reserve Bank laid out the precarious nature of these actions.

The epicenter of the controversy is Simelane's role when she served as the mayor of Polokwane Municipality. In her explanation, she credited a municipal manager's advice for the timely withdrawal of Polokwane's R349-million investment before the bank's downfall. However, the convincing integrity of this narrative is weighed against Simelane’s personal financial interactions with Gundo.

Simelane’s disclosure about acquiring a R575-million loan from Gundo to diversify her income streams — a loan she claimed to have repaid with interest — raised suspicions, primarily due to the peculiar timeline of repayments. The interval between the loan agreement in 2016 and the commencement of payments in late 2020, coupled with the high interest rate, sparked queries regarding the preferential nature of the terms granted to her.

Furthermore, Simelane's explanation concerning her company's financial operations, a late-registered T5, and its initial funding channeled through another company owned by her brother, added layers of complexity to her situation. MPs pressed her on the due diligence regarding Gundo's authorization as a financial service provider, to which Simelane provided an equivocal response, bordering on the edges of regulatory ignorance and informal loan practices.

Amidst the inquisition, a serious debate emerged around the principle of Simelane's influence over law enforcement bodies like the National Prosecuting Authority (NPA) and her professed non-interference with entities tasked with prosecuting VBS-associated corruption. MPs, including Kabelo Kgobisa-Ngqaba and Busisiwe Mkhwebane, asked for assurances that Simelane would refrain from exerting influence over the NPA, particularly concerning the VBS matters and her sister's criminal case.

As the examination unfolds, Parliament’s next move revolves around obtaining a legal perspective on whether it possesses the authority to summon the controversial loan agreement between Simelane and Gundo. The minister's standing, professional past, and ability to impartially execute her duties remain under intense scrutiny, echoing broader concerns about ethics and accountability within South African governance.