The Hawks executed a search and seizure warrant on Thembi Simelane’s former personal assistant based at Polokwane Municipality last week to secure possible evidence of corruption linked to the municipality’s R349 million investment with VBS Mutual Bank in 2016 and 2017.
Justice minister Thembi Simelane, the mayor of the municipality between 2014 and 2021, became an ultimate beneficiary of VBS-loot when she received a dubious R575 600 “loan” from a VBS fixer to buy a coffee shop in Sandton.
This transaction forms part of the Hawks investigation.
Daily Maverick and News24 have seen a copy of the warrant dated 29 August 2024, including a copy of the affidavit filed by Colonel Anton White of the Hawks in Limpopo in support of the warrant.
The warrant reveals that a case regarding the R349 million Polokwane Municipality invested with VBS between 2016 and 2017 was registered in November 2019. Investigations focused on a possible violation of the Municipal Financial Management Act, possible corruption, and possible money laundering in contravention of the Prevention of Corrupt Activities Act.
Read more in Daily Maverick: VBS scandal archive
So far, VBS fixer Ralliom Razwinane, owner of Gundo Wealth Solutions which paid for Simelane’s coffee shop has been arrested. He stands trial on 13 counts of corruption as part of the main criminal case around the R2-billion theft that collapsed the bank in early 2018. He was charged with two offences specifically linked to commissions paid to his company, Gundo Wealth Solutions by VBS in exchange for securing investments from the Polokwane Municipality.
Prosecutors have labelled the Polokwane kickback payments corrupt, according to an indictment handed up to the high court.
The warrant was obtained in secret to prevent possible suspects from being alerted to the investigation. In the meantime, it leaked and now circulates in political circles in Polokwane.
The Hawks, officially known as the Directorate for Priority Crime Investigation, quietly visited the municipal officers on Burger Street on Friday, 30 August 2024 according to two sources with direct knowledge of events at the municipality on the day.
The warrant demanded that the former personal assistant hand over cellphones, a laptop or laptops, documents and passwords to their private email accounts.
“It has been established through investigations and analyses of computers previously seized from the municipality, that emails were sent to …relating to VBS. By virtue of [their] post, [they] will be in possession of said emails and documents relating to VBS. From the same devices it was found that WhatsApp messages were sent to [their] cellphone,” White stated in motivation for the warrant.
In his affidavit in support of the warrant, White reveals that WhatsApp texts were sent to the personal assistant “relating to VBS, Gundo and Razwinane”. He argued that the personal assistant was central to “the flow of communication between municipal officials, Gundo and Razwinane”.
The personal assistant is not being named as it appears they are not a target of the criminal investigation but were merely the functionary whom the Hawks believe has access to the information they need.
Hawks spokesperson Brigadier Thandi Mbambo was asked on Wednesday to confirm the execution of the warrant but had yet to respond at the time of publication.
The nature of the documents sought by the Hawks places not only Gundo’s interactions with the municipality under the microscope but will also lead to evidence around the coffee shop transaction and possible communication between Razwinane and Simelane.
The search and seizure application was initiated three days after Daily Maverick and News 24 revealed the existence of Simelane’s suspect ‘loan’ from Gundo to purchase the coffee shop located at Fredman Towers in Sandton, Johannesburg.
A joint investigation by the publications based on banking records, unpublished forensic reports, the VBS indictment and sources revealed that the ‘loan’ was paid from Gundo’s own VBS account to Ricovert, the company that sold the business to Simelane.
https://www.dailymaverick.co.za/article/2024-09-06-simelanes-coffee-shop-fixers-sole-loan-in-2016-was-paid-with-corrupt-vbs-kickback-cash/
It is unclear why Gundo paid the money directly to Ricovert, and this is among several questions the journalists asked Simelane, which she failed to answer.
Simelane’s version of taking out a “commercial loan” from Gundo is questionable for a number of reasons:
- She received the sole loan issued by Razwinane that year.
- Gundo was also a service provider to Polokwane Municipality while Simelane was the mayor.
- The “loan” was then paid out in two transactions days after the municipality made two large investments in VBS totalling R130-million, with more to come.
Analysis of bank records shows there was no cash other than VBS-loot in the Gundo account when Simelane received the R575 600 benefit.
It means she directly benefitted from the crimes committed at VBS. The conflict of interest of her position as mayor taking out a “loan” from her municipality’s service provider seems glaring, but Simelane denied that there is any.
She also denied any conflict between her oversight of the National Prosecuting Authority, which is responsible for bringing a raft of VBS cases to criminal trials, and her own links to VBS.
Razwinane, a politically connected financial advisor was paid about R24-million in kickbacks by VBS through Gundo’s various bank accounts in exchange for securing investments from municipalities in the bank. At least R1,7-million in kickbacks are linked to the Polokwane transactions.
The delay in pursuing the Polokwane investigation, sources with direct knowledge of the thinking of law enforcement officials said, was due to the large number of cases around VBS that required extensive investigation.
According to a letter obtained by Daily Maverick and News 24, White had requested detailed documentation from the municipality on 3 June 2020, when Simelane was still mayor.
While the investments were unlawful, Polokwane did not lose money as many other municipalities did as it had withdrawn all its investments prior to the bank’s collapse in 2018.
Simelane previously failed to fully answer questions from Daily Maverick and News 24 seeking to establish how she had come to discuss a possible loan with Razwinane, whose company had signed a three-year contract with the municipality to provide investment brokerage services.
In September 2016, the money started flowing to VBS from Polokwane. On 14 and 17 October, just as VBS was paying Gundo commissions for securing the Polokwane investments, the coffee shop transaction was completed.
Simelane, who has denied impropriety said the transaction was above board and that she had repaid the loan in full. Questions about the possibly unlawful process of obtaining the “loan”, and whether it was a “loan” at all, remain unanswered. When pressed by journalists to provide proof of the repayment, she failed to deliver.
Simelane is due to appear before Parliament’s portfolio committee on Justice and Constitutional Development this morning (on Friday morning) to answer questions from MPs about the loan.
President Cyril Ramaphosa further requested from Simelane a report on the allegations and the transaction, while her ANC party’s integrity commission will also look at the matter.
Opposition parties Action SA and the Democratic Alliance have called for Simelane to be suspended while investigations continue in addition to filing complaints with the Public Protector.
As justice minister, Simelane has oversight of the National Prosecuting Authority that has overseen a sprawling investigation into the theft of VBS depositor’s money as well as numerous instances of corruption linked to politicians and other municipal officials.
She has maintained that she is not conflicted as a result of her interaction with Gundo and Razwinane.
Razwinane did not answer questions put to him. DM