Opening remarks by Hon Thembi Simelane. MP Minister Of Justice and Constitutional Development - Briefing to Portfolio Committee on Justice and Constitutional Development on the allegations relating to a VBS Mutual Bank loan
Good morning Honourable Members
On Monday, 26 August 2024, the Daily Maverick and News24 jointly published a report which sought to insinuate that during my tenure as the Mayor of Polokwane Local Municipality I acted improperly.
I want to thank the Committee for affording me an opportunity to deal with these insinuations with the hope of putting this matter to rest.
Honourable members,
It is a matter of public record that Polokwane Local Municipality invested money in VBS during my tenure as mayor. But what is not amplified is that on advice from technical expertise within the municipality, I as mayor instituted the withdrawal of all Polokwane Municipality investments from VBS.
My attitude at the time was that if there is anything improper with regards to municipality funds it must be stopped forthwith. It is important to note that the withdrawal took place two months before the investments could mature. All this happened way before the National Treasury ordered all municipalities to withdraw their investments from VBS.
Honourable members.
The published allegations are anchored around two questions: One: Did I have an improper relationship with a contractor appointed by the Municipality which I served as a mayor?
Two: Did I receive financial benefits from the said contractor?
I propose to focus my address and interaction with this committee on these two topics.
Let me deal with the First Question:
Did I have an improper relationship with a contractor, appointed by the Municipality?
The answer is NO, I did not have an improper relationship with a contractor appointed by the Municipality.
Honourable members, let me give context to the above assertion.
Appointment of Gundo Wealth Solutions
Gundo Wealth Solutions Limited was appointed by the Polokwane Local Municipality as a Financial Advisor, on investment decisions.
Their work entailed advising the Municipality on where and how to invest surplus funds, for a better return on investment.
This advisory work was undertaken at no financial cost to the Municipality.
The Municipality did not pay a single cent to Gundo Wealth Solutions, and the contract clearly stated that the Municipality would not pay a cent for the services rendered by Gundo Wealth Solutions.
Honourable Members,
When you investigate whether I would have had relations of any kind with Gundo Wealth Solutions, you must start with the appreciation that Gundo Wealth Solutions was not a contractor that received payments from the Municipality.
Gundo Wealth Solutions was appointed to provide services to the Municipality through a procurement process which was undertaken by the Municipal Manager.
This was done through Committees of the Municipality entrusted with overseeing procurement, it was then reported to the Municipal Council, and approved.
I was not in any manner involved in the processes which resulted in the appointment of Gundo Wealth Solutions.
Honourable members allow me to move to the Second Question:
Did I receive any improper benefits from a relationship with a contractor appointed by the Municipality during my tenure as Mayor.
The answer is NO, I did not receive any improper benefits from any contractor as insinuated in the media.
Again, let me give context Honourable Members.
When one is appointed as an office bearer in public service, it becomes difficult for one’s family members to obtain employment in public service due to perceptions of nepotism and favouritism.
This difficulty in finding employment opportunities for my immediate family members drove me to consider the possibility of setting up a business.
I investigated the feasibility of commencing such a business and a coffee shop seemed a feasible option, so that I could create employment opportunities. The coffee shop employed between 08-12 people. This consideration was also for myself in case I find myself out of office.
Initially I had intended to finance the business with a partial withdrawal of my retirement savings.
Gundo Wealth Solutions advised the municipality in many transactions involving reputable financial institutions. Because of this fact I asked Gundo Wealth Solution for advice with regards to my idea of business financing and the modalities of making a withdrawal from my retirement savings.
I was advised against a withdrawal from my retirement savings, as the amount I would get would be significantly less than the amount required for the business operations.
It is in those discussions that Gundo Wealth Solutions then informed and advised me of their business loan products.
In consideration of the option of a loan, as advised by Gundo Wealth Solutions, the information at my disposal was this:
Gundo Wealth Solutions was not a paid service provider of the Municipality but a financial advisor.
Therefore, there existed no conflict of interest, in securing a business loan from Gundo Wealth Solutions.
I took a decision to proceed with the business, and the following steps ensued:
On 26 September 2016, I obtained the finalized incorporation certificate of a company T5 Investments Group (Pty) Ltd. T5 Investment traded as Silvanas Bistro until 2019 when both Silvanas Bistro and Silvanas Events were registered in October 2019.
On 30 September 2016, I concluded written agreement for the purchase of a business of a Coffee-Shop.
On 30 September 2016, I concluded a written loan agreement with Gundo Wealth Solutions.
Following the loan agreement Gundo Wealth Solutions advanced a loan in the amount of R575 600-00 (Five Hundred and Seventy-Five Thousand Rand, Six Hundred Rand).
The capital advance was repaid, as provided for in the loan agreement, by three instalments of R283 333-00 (Two Hundred and Eighty-Three Thousand, Three Hundred and Thirty-Three Rand). The instalments were paid from my FNB account to a Gundo Wealth Solutions Nedbank account on the following dates:
09 October 2020.
12 November 2020, and
07 January 2021.
The business relationship between T5 Investments Group (Pty) Ltd and Gundo Wealth Solutions accordingly ceased by the fulfilment of the contracted obligations on 07 January 2021.
Limpopo Treasury Investigations.
Honourable members
It is prudent for me to bring to your attention that the Limpopo Provincial Treasury also instituted an investigation into all municipalities that made investments with VBS.
A forensic investigation report recommended that consequence management be considered for those who are accountable.
Paragraph 18.9.2 of that report states “It is recommended that corrective action be considered against the Executive Mayor T Nkadimeng in that she failed to comply with section 52 of the MFMA”.
Considering that Polokwane Municipality did not incur any losses and I as Mayor was pro-active enough to order a withdrawal of investments, I still did not escape censure by council.
I was registered on a two-year course at the University of Pretoria. I am happy to report that I completed and passed the course.
Conclusion.
Honourable Members
As I draw to conclusion,
I would like to really affirm that I did not have any improper relationship with an entity appointed by the Municipality during my tenure as Mayor,
I did not receive any improper benefits from Gundo Wealth Solutions.
Much has been said about a conflict of interest due to the position I now hold.
The Department of Justice and Constitutional Development plays no role in the NPA’s decisions to prosecute or to discontinue prosecutions.
On the matter of me taking a loan, allegations of conflict of interest then and now based on true and correct facts cannot be sustained.
When the President informed me that he is assigning me to this department the issue of conflict of interest crossed my mind, but it was not about this issue.
I have been at the forefront of my family’s quest for justice and closure in the disappearance and death of my sister Nokuthula and now I have to handle this Department.
I decided the country and its people come first which is what Nokuthula would have wanted.
Thank You
