Thembi Simelane's unexplained cash (Part Two) — The business ...

Newly appointed human settlements minister Thembi Simelane’s businesses bled cash in the 2019 and 2020 financial years — much of it going towards her personal bills — and yet seems to have generated mismatched or little income.

The business account used to run her Sandton coffee shop, T5 Investment Group, had an opening balance of R2.89-million in October 2019 — cash that Simelane, then the mayor of Polokwane, used to keep the business afloat and maintain her lifestyle.

In the wake of Daily Maverick and News24’s revelations on Tuesday, highlighting that Simelane’s 2018 expenses eclipsed her income more than five times over when she was mayor of Polokwane, President Cyril Ramaphosa announced late on Tuesday that Simelane, who had been justice minister since July, had been shifted to the human settlements portfolio, while Mmamoloko Kubayi would take over the reins at justice.

Ramaphosa’s terse statement did not indicate why he had made the move, beyond saying it was to ensure the “effectiveness of Cabinet”. For more than three months Ramaphosa had come under intense pressure to act on his Simelane headache.

“I thought you would be happy,” said her spokesperson, Tsekiso Machike on Tuesday night when asked if Simelane was satisfied with the move. She is travelling in The Netherlands on official duties.

This article focuses on snapshots of the 2019 and 2020 bank statements we obtained of Simelane’s businesses as well as known income and expenses of the 2019/20 financial year.

Simelane refused to explain the origin of the cash held in T5’s bank account, while it is clear the coffee shop was operating at a loss.

Simelane, who was until Tuesday night justice minister and executive political head of the National Prosecuting Authority, declined to contextualise the red flags in her finances and lifestyle.

Replying to a list of findings and questions in a seven-page document from Daily Maverick and News24, Machike said: “The minister has noted your questions which emanate from an unauthorised lifestyle audit you purport to have conducted against her. The minister will not be participating in anything or answering any questions that are a product of this campaign that your publications are running against her.”

Simelane did not address the origin of her wealth.

Public Protector initiates investigation into Silvanas ‘loan’

On Monday, the Office of the Public Protector (PP) confirmed it was investigating a complaint by ActionSA MP Athol Trollip of “improper conduct” regarding the questionable “loan” Simelane took from VBS fixer Ralliom Razwinane’s company Gundo Wealth Solutions in 2016 to buy Silvanas Coffee Shop in Sandton.

The PP said a formal notice had been issued to Simelane and President Cyril Ramaphosa confirming the investigation would require their response.

Trollip, a member of Parliament’s justice and constitutional development committee, criticised Ramaphosa’s sideways shuffle of Simelane to Human Settlements, saying corruption allegations had “rendered [Simelane’s] continued leadership of the justice department wholly untenable. If the minister was deemed no longer fit to serve as minister of justice due to allegations of potential corruption and questionable sources of wealth beyond her declared earnings, then surely the President cannot now expect us to believe that she is perfectly suited to lead a critically important portfolio like Human Settlements, overseeing billions of rands.”

Simelane’s company T5 Investment Group

Indications are that Simelane had been living beyond her means since at least 2018.

When we probed the origin of her wealth, sources close to Simelane and in various units in the government’s justice cluster have, independently of each other, repeatedly indicated that much of her lifestyle was funded by her company T5 Investment Group.

When we zoomed into the genesis and finances of T5 Investment, it seemed that the same pattern of expenses eclipsing verifiable income emerged.

Bank statements from T5 Investment Group dated 5 October to 5 November 2019 show a total of R166,043.90 was deposited into the business account.

During the same period, the business spent R618,303 — almost four times more than it received.

About 23% of the expenses in this month appeared to be for Simelane’s personal needs. These included “legal fees”, architect fees for her newly built home in Pretoria, rates and taxes for properties she owns in Pretoria and Polokwane, a small payment to the luxury goods shop Luxity and what appears to be payments for personal groceries. Simelane did not comment when these findings were put to her.

More than 49% of the expenses in this period were used to buy stock and pay rentals, salaries and tax for the business.

It is unclear if this was a singular occurrence, but additional documents and sources suggest the overspending may have been habitual. For several months Simelane rented equipment from the previous coffee shop owner while the business funds covered rent for her children’s accommodation, holidays to Disney World and luxury handbags, shoes and jewellery.

Yet, the opening balance of T5 Investment on 5 October was R2.82-million — income that is not likely to have been generated by the coffee shop alone, based on an analysis of the business income during the time period available.

Simelane did not respond to questions about the origin of these funds in T5 Investment, or why she conflated her business accounts and private life.

T5 Investment Group’s income in October 2019

About R83,000, half of T5 Investment’s income from 5 October to 5 November, was from speedpoint sales at the coffee shop. Another R67,000 was from five cash deposits at ATMs in Sandton.

As a rule, the authorities and banks take a dim view of cash being deposited into bank accounts. In the absence of an explanation from Simelane, and because no cash sales at the coffee shop are registered in the bank statements, it is possible that these cash deposits were part of the business’s legitimate earnings.

In addition, an advocates group in the area sent an EFT payment, apparently for a function hosted by Silvanas.

T5 Investment Group’s expenses in October 2019

T5 Investment seemingly spent more than R140,000 on Simelane’s needs during this month, our financial analysis suggests.

This conflation of personal and business interests is questionable — not only from a tax perspective, but also because of the financial principle that personal and business expenses, under legal circumstances, are best kept separate.

The bank statements show Simelane spent more than R33,000 on rates and taxes for her properties and the architect she instructed to draft plans for her envisioned Pretoria residence.

A year before building work started, T5 Investment acquired an empty erf in Pretoria for R1.2-million — in cash. Simelane did not explain the origin of these funds either.

Another R77,000 were marked as “legal fees Nkadimeng”, Simelane’s former married surname, and R13,453 was used to pay her Vodacom cellphone bill. (Simelane received a monthly cellphone benefit of about R3,000 from Polokwane Municipality, but documentation we have seen and an independent source suggest she regularly ran up her monthly Vodacom bill to around R18,000 and even R52,000 at times.)

A small payment to Luxity, fuel and what seem to be small payments for groceries at Pick n Pay and Spar account for another R17,000.

Simelane did not confirm or deny these listed expenses when questioned about them.

These personal expenses are almost a quarter of the company’s monthly expenditure and account for 85% of the company’s income in this period.

On Monday, Simelane arrived at The Hague in The Netherlands sporting what appeared to be a Louis Vuitton Soho backpack, worth approximately R30,000. She was speaking at the 23rd Session of the International Criminal Court Assembly of States Parties.

On Tuesday, Daily Maverick and News24 revealed that eight invoices show Simelane spent R250,000 in four months in 2018 on luxury bags and shoes from Luxity. At the time, her yearly salary and declared income was half a million rand.

The bag Simelane wore in The Hague was not one of the items detailed on the invoices. A source claimed Simelane habitually bought from Luxity for more than a year, and that she is “extremely careful not to show these in the office” but it is rather during “foreign trips that the luxury clothes get used”.

Simelane herself admitted to turning to “shopping therapy” when under stress.

T5 Investment seemed to have spent at least R300,000 to keep the company afloat.

Simelane paid a total of R71,434 towards 10 staff members’ salaries. These ranged from R3,460 to R26,000 per employee.

Another expense of R75,588 was chalked up to tax. (We consulted a chartered accountant who said an inference over how much income the company received cannot be made based on the limited information we had, but did suggest that this payment may include UIF on behalf of the Silvanas employees.)

Stock was another big-ticket item. Buying mostly from T & F Meat Market in Midrand and Makro, T5 Investment appeared to have spent at least R74,000 on fresh produce.

Another R50,000 was paid towards rental fees, gas and a Telkom line.

To have these sorts of overheads with the limited income T5 Investment has recorded and cash in the bank of R2.82-million seems highly questionable.

Simelane’s now deregistered company Silvanas Events

Silvanas Events is a company Simelane registered in 2019. In the intervening time, the company became dormant and then ran into a deregistration process in 2021, which was made final in early 2024.

This means that Simelane did not comply with the requirements to file annual returns, declare beneficial ownership or pay the Companies and Intellectual Property Commission fees. The company technically ceased to exist. In May this year, while she was a deputy minister, it seems she initiated a process to reinstate the company, suggesting she wishes to trade anew with Silvanas Events.

A bank statement dated 30 November to 31 December 2020 is suggestive of why the company became dormant. The income in this period was zero. Cash in the bank was R336,146 and expenses were calculated to be R81,779.

Again, the expenses appear to support Simelane’s lifestyle. During this month, Silvanas Events paid R39,000 to two of Simelane’s children, bought a MacBook for R22,500, paid for a R5,000 online course and accommodation at a Swaziland hotel and bought lunch at the Ranch Hotel in Polokwane.

Simelane sidestepped a series of questions over the origin of the funds in Silvanas Events.

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As with Simelane’s expenses in the 2018 year, her company expenses are suggestive of more cash than can be accounted for. DM

The third report in this series evaluates indications that Simelane and her companies are prime candidates for a lifestyle audit by the Hawks.

Read Part One here.