JOHANNESBURG (AP) — South Africa’s justice minister on Friday denied corruption allegations against her in a joint banking scandal that left thousands of pensioners without their life savings.
VBS Mutual Bank, which managed the savings of pensioners mainly from the northern province of Limpopo and also secured illegal investments from local municipalities, was declared bankrupt in 2018 after it emerged that more than R2 billion (US$112 million) had been stolen from the bank.
Police investigations revealed that the bank’s money was used to purchase luxury homes and vehicles, among other things. Financial gifts were also given to various individuals and organizations, including political parties.
Justice Minister Thembi Simelane was only appointed to her post in the country’s newly formed unity government in June, after the former ruling African National Congress party lost his parliamentary majority in the elections of May 29.
She is alleged to have received a “loan” to purchase a coffee house from a company accused of receiving bribes for brokering illegal investments for VBS from South African municipalities, including the Polokwane municipality where she was mayor at the time.
There have been calls from various quarters for Simelane to be dismissed from her position as Minister of Justice, where she exercises political oversight over the National Prosecution Service, which handles corruption cases related to VBS.
In response to questions in parliament, Simelane insisted that the loan she received was fair and that she had repaid it with interest. Simelane also denied that the loan was in any way connected to the municipality she headed, which invested in the bank.
She denied that there was any conflict of interest regarding the investigation into the demise of VBS and her responsibilities as minister.
“The minister does not decide who should be prosecuted or not. I have offered impartiality to the NPA (National Prosecuting Authority),” Simelane said.
President Cyril Ramaphosa, whose government promised to take strict action against corruption Since his re-election as president this year, he has worked in government and state-owned companies and has come under pressure from opposition parties and civil society groups to fire Simelane.
Last week he asked Simelane for an official response to the serious allegations against her.
Addressing the media after a state visit to China this week, which he also attended China-Africa SummitRamaphosa said the Simelane issue would not be “swept under the carpet”.
Investigations into those involved in the bank looting have already led to convictions of some of the alleged masterminds behind the plans to rob the bank.
Tshifiwa Matodzi, the bank’s former chairman, was recently sentenced to 15 years in prison after reaching a settlement with the state. He revealed the mechanization of the scheme, including money paid to the opposition political party Economic Freedom Fighters as “donations.”
The investigation into the banking crisis is still ongoing.
