What’s all this talk about Justice Minister Thembi Simelane and the VBS Mutual Bank scandal? 

Justice Minister Thembi Simelane is facing serious accusations that have brought her under intense scrutiny. Simelane, a senior figure in the ANC, is set to appear before the Parliamentary Portfolio Committee on Justice and Constitutional Development on Friday, following allegations of her involvement in the notorious VBS Mutual Bank scandal—the same scandal that saw around R2 billion vanish from depositors’ pockets.

So, what’s the story here? Simelane is alleged to have misused her political power to assist in fraudulent transactions linked to VBS, and there’s a question mark over whether she may have received “improper payments” herself. Let’s unpack this tangled web

VBS Scandal: A brief recap

For those who need a refresher, the VBS Mutual Bank scandal erupted in 2018, revealing a complex web of corruption and fraud. 

At its core, the scandal was a pyramid scheme involving VBS Bank and a range of politically connected figures, including EFF leader Julius Malema and his former deputy Floyd Shivambu. The scheme looted around R2 billion from various accounts, impacting small depositors, local municipalities, and even the elderly. This money was diverted into the pockets of corrupt executives, politicians, and business people.

Now, Simelane has been dragged into this web, with allegations suggesting she may have played a role in facilitating some of these shady dealings.

Read more about the VBS scandal. 

Simelane’s alleged role in the VBS scandal

Simelane’s alleged involvement centres on a “loan” of over half a million rand that she took from a company implicated in brokering unlawful investments. Back in 2016, when she was Mayor of Polokwane Municipality, Simelane accepted a “commercial loan” of R575,600 from Gundo Wealth Solutions, a company owned by Ralliom Razwinane. This same company was involved in securing R349 million worth of questionable investments into VBS Mutual Bank on behalf of the Polokwane Municipality.

Simelane says the loan was to purchase Silvanas Coffee Shop in Sandton, Johannesburg. However, the timing of this loan has raised eyebrows since it coincided with VBS paying Razwinane a total of R24.2 million in kickbacks for securing municipal investments, including from Polokwane.

Investigations, along with reports from Daily Maverick and News24, have hinted that these transactions were far from straightforward. They appear to have been tied to a scheme where kickbacks were exchanged for large deposits made by municipalities into VBS. Razwinane, the key broker, is now on trial for fraud, corruption, and money laundering related to these investments.

Despite the mounting allegations, Simelane, who served as Mayor of Polokwane until 2021 and was appointed Justice Minister in June, denies any wrongdoing. She insists there is no conflict of interest in her current role, where she oversees the National Prosecuting Authority (NPA) and law enforcement agencies that are still investigating the VBS scandal. 

Justice Minister to explain herself in parliament

The latest development? Simelane is expected to appear before Parliament’s Portfolio Committee on Justice and Constitutional Development this week to address these allegations. 

Chairperson of the Portfolio Committee, Xola Nqola, expressed serious concern over the allegations, noting that they impact the perception of South Africa’s efforts to combat corruption. “These types of allegations are damaging to the image that South Africa is trying to portray as a country ridding itself of any form of corruption,” Nqola stated.

“We thought it prudent to call the Minister speedily to a committee meeting where she can take Parliament and South Africans into confidence regarding these allegations,” said Nqola in a statement released on Monday. 

Simelane committed to appearing before Parliament during a question and answer session in the National Assembly last week, stating, “Permit me to start by making a commitment to this house on my availability with regard to the response, if any is needed by the house, or the committee or the Public Protector on the issues that are doing the rounds.”

The Justice Minister is expected to face the committee on Friday. In the meantime, President Cyril Ramaphosa has requested a “detailed report and briefing from the Minister on the matter.”

With her parliamentary appearance scheduled for this week, it seems the pressure on Simelane is only just beginning to build.