South Africa’s justice minister on Friday refuted corruption allegations linked to a scandal involving VBS Mutual Bank, where thousands of retirees lost their life savings.
The bank, which primarily managed the savings of retirees from Limpopo province and illegally secured investments from local municipalities, was declared bankrupt and insolvent in 2018 after the theft of over 2 billion rand ($112 million) was uncovered.
Justice Minister Thembi Simelane, who took office in June under South Africa’s newly formed government of national unity after the African National Congress lost its parliamentary majority in May, has denied involvement in the VBS Mutual Bank corruption scandal.
Police investigations revealed that funds from the bank were used to purchase luxury homes, and vehicles, and distributed as gifts to various individuals and political parties.
Justice Minister Thembi Simelane has faced accusations of receiving a “loan” to purchase a coffee shop from a company linked to kickbacks for brokering illegal investments for VBS Mutual Bank.
At the time, she was mayor of Polokwane, one of the municipalities implicated in the scandal.
Calls for her removal as justice minister have grown due to her political oversight of the National Prosecuting Authority, which is handling corruption cases related to VBS.
In response to questions in Parliament, Simelane insisted the loan was legitimate, repaid with interest, and unrelated to her municipality’s dealings with VBS.
She also dismissed any conflict of interest between her ministerial duties and the ongoing investigations into the bank’s collapse.
“The minister does not have the authority to decide who gets prosecuted,” Simelane stated, defending her impartiality in the VBS Mutual Bank scandal. “I provided impartial oversight to the NPA.”
President Cyril Ramaphosa, facing growing pressure from opposition parties and civil society to dismiss Simelane over the corruption allegations, recently asked her for an official response.
After attending the China-Africa summit, Ramaphosa assured the media that the issue would not be “swept under the carpet”.
The ongoing investigations into VBS have led to convictions, including Tshifiwa Matodzi, the bank’s former chairman, who received a 15-year sentence after revealing details of the scheme, including “donations” to the Economic Freedom Fighters party. The probe into the collapse of the bank continues.
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