Allegations of a R500 million bribery scandal have sent shockwaves through the South African cabinet. Thulas Nxesi, the Minister of Employment and Labour, has vehemently denied the accusations, stating that they are completely unsupported by any evidence.
The allegations came to light when Mthunzi Mdwaba, CEO of Thuja Capital Fund, claimed that officials acting on behalf of three Cabinet ministers had attempted to solicit a 10% kickback from an irregular R5 billion deal.
Mdwaba specifically named Minister of Finance Encoh Godongwana and Minister of Higher Education, Science and Technology, Dr Blade Nzimande, as the other implicated executives. However, Nxesi has firmly refuted these claims and has stated that the R5 billion of public funds in question will not be released to Mdwaba’s company.
Nxesi has called Mdwaba’s allegations false and defamatory, emphasizing that no evidence has been provided to support them. He believes that Mdwaba’s motive is to divert attention from the issues surrounding the R5 billion Thuja scheme.
Nxesi also revealed that Mdwaba’s attacks on him began two years ago when the government withdrew its support for Mdwaba’s candidacy for a position in the International Labour Organisation (ILO).
Nxesi explained that the government’s decision was based on information about Mdwaba’s dubious past, including being declared a delinquent director and deemed unfit to hold certain positions by the courts.
A subsequent forensic investigation into Mdwaba uncovered irregularities and a conflict of interest, as he served as both the chair of Productivity SA (an entity within Nxesi’s department) and the CEO of Thuja, which intended to do business with the department.
As a result, Mdwaba has been removed as the chair of Productivity SA, and the department has instructed lawyers to prepare an application to set aside the Thuja agreement.
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The Department of Employment and Labour, along with the Unemployment Insurance Fund (UIF), had initially planned to invest R5 billion in Thuja. In return, Thuja would invest the funds in various companies to create at least 750,000 jobs.
However, concerns were raised about the timing of the deal, as Thuja had only been registered 10 days prior to the signing of the agreement in December of the previous year. The department’s own adjudication structures had advised against proceeding with the deal, but it was still pursued.
