South Africa’s Julius Malema faces new corruption allegations

Julius Malema, leader of South Africa’s radical Economic Freedom Fighters, is facing new accusations of corruption that could cause further political turmoil following the election that led to a coalition government between the African National Congress and the liberal Democratic Alliance.

The allegations come from Tshifhiwa Matodzi, former chair of VBS Mutual Bank, which collapsed in 2018.

Accusations that Malema and his deputy Floyd Shivambu benefited from R2bn ($110mn) stolen from the bank first emerged six years ago, when a report from the country’s central bank concluded that R16.1mn of the stolen money went to Shivambu’s younger brother Brian.

Subsequent reports by the Daily Maverick said Malema used this money, diverted through front companies, to buy designer wear at Gucci, fund lavish parties and pay for his son’s school fees at a high-end Johannesburg private school.

The latest evidence from Matodzi — who was found guilty this week on 33 counts of corruption, fraud, money laundering and racketeering, and confessed as part of a plea deal “to rectify my wrongdoing” and reduce his 495-year jail sentence to 15 years — contains new details about alleged corruption.

Matodzi provided a 263-page affidavit to the Pretoria High Court in which he detailed how VBS paid dozens of bribes to government officials to convince them to place municipal funds with the bank. Others implicated include auditors KPMG, whose banking partner at the time Sipho Malaba is already facing criminal charges in this case.

But it is Matodzi’s admissions relating to Malema, the 43-year-old firebrand who was suspended from the African National Congress in 2012, that threaten to cause the largest fallout in South Africa’s fragile politics. In May, the ANC lost its majority for the first time since the end of apartheid and formed a unity government.

Malema’s EFF, which saw its support slip to 9.5 per cent in the election, refused to form part of the unity government.

In his affidavit, Matodzi described how he met Malema and Shivambu at a penthouse in Sandton in April 2017. At the time, Malema had been publicly criticising VBS for lending money to former president Jacob Zuma to upgrade his house. Matodzi said this “was damaging VBS’s reputation”.

Ostensibly to buy the EFF’s silence, Matodzi said he offered to donate R5mn immediately to the EFF and follow that with R1mn every month thereafter. The first payment was made on June 8 2017 into the account of a company named Sgameka, owned by Shivambu’s brother, Brian.

“Myself, Julius and Floyd understood that concept of ‘donation’ to mean gratification, hence Floyd and Julius did not provide me with [the] EFF’s own banking details for these donations,” he said.

This week, Malema said there was nothing new in the allegations, with the EFF’s response contained in the “archives”. He and Shivambu have long maintained they did nothing wrong, urging accusers to “open a case”.

Sithembile Mbete, a political scientist at the University of Pretoria, said these allegations were far more serious than the ones Malema and his party had faced in the past, though they would not necessarily cause great political damage.

“In the past, the EFF has been able to ignore this, or claim they were being targeted by the media. This will be far harder to ignore. But politically, I’m not sure this alone will hurt it,” she said.

“The spectre of corruption allegations was not the primary reason why the EFF lost support in the last election. And the truth is, we have no shortage of corrupt politicians.”

If either Malema or Shivambu were indicted, the political damage might be more severe, she said.

The party itself will this week celebrate its 11th anniversary. 

ActionSA, a party run by businessman Herman Mashaba, said it would write to the police to demand an urgent investigation into Malema and Shivambu. The claims illustrate the “unethical character of these two EFF leaders”, it said.

“From the beginning when Malema was still in the ANC, his lifestyle didn’t match his income, and nobody did anything about it. If we allow this, it’ll only perpetuate the view that every politician is corrupt to the core, which must change,” Mashaba told the Financial Times.

The Democratic Alliance’s Baxolile Nodada said his party laid a complaint with the police six years ago against Malema. “This brazen theft left in its wake a trail of destruction as senior citizens lost their pensions and bank clients their savings,” he said. This case “has significant bearing on the credibility of parliament”.