Simelane borrowed at high VBS rates, bypassing cheaper banks, MPs hear

Thembi Simelane compares her loan from Gundo Wealth Investments to borrowing from a friend or family member.

Simelane, the minister of justice, stood in front of members of Parliament (MPs) on Friday morning to give an account of her dealings with Gundo Wealth Solutions, a company that received illicit VBS Bank money.

Democratic Alliance MP Damien Klopper was not having Simelane’s assertion, saying borrowing money from a family member is very different to borrowing money from a government service provider.

Simelane received a R575,600 loan from Gundo Wealth Solutions, owned by Ralliom Razwinane, in 2016 while she was mayor of the Polokwane municipality, as first reported by Daily Maverick. Razwinane is currently on trial for fraud, corruption and money laundering over VBS-related crimes.

At the time, Gundo was the municipality’s service provider, in the thick of brokering a supposed investment deal with VBS. Polokwane municipality unlawfully invested R349 million in the bank. 

Asked by MPs why she ostensibly applied for an expensive, mashonisa-like loan with Gundo, which she claims she paid back with 47.5% interest, instead of approaching a traditional bank with lower interest rates, Simelane said she thought Gundo Wealth Solutions was a registered financial service provider.

She claims to have repaid the loan with R849 000 in 2002, four years after she received it, although she did not provide MPs with proof of this payment, or a loan agreement with Gundo.

Simelane, however, added that the loan contract and proof of repayment is in the report President Cyril Ramaphosa requested last week.

During her appearance in Parliament, the Department of Justice and Constitutional Development released a statement saying Simelane had indicated that the proof of payment exists.

“She has repaid the capital investment in three instalments from her personal FNB account, including over R250 000 in interest. The minister has assured the portfolio committee of the existence of proof of payment,” statement reads.

I did not deal with VBS, only Gundo, says Simelane

Simelane also sought to distance herself from the looting of VBS and the financial harm inflicted on depositors.

“I loaned from Gundo, not from VBS. My contract was with Gundo, not VBS,” Simelane told MPs.

She, however, sympathised with the depositors, most of whom are pensioners in Venda.

“I regret the harm it has caused the people of Venda in particular,” Simelane said.