Former Johannesburg mayor arrested

Former Johannesburg mayor Kabelo Gwamanda was arrested for fraud on Friday following an investigation by the Financial Sector Conduct Authority (FSCA).

The Sunday Times reported that Gwamanda, currently the MMC for community development in the city, was arrested for an alleged funeral policy scam.

The newspaper said the former mayor “operated the illegal business in 2012 and then disappeared when his clients came looking for their money”.

Gwamanda’s company, Ithemba Lama Afrika, took money from Soweto residents. However, when they wanted to claim money, it was not possible.

The Sunday Times reported that a warrant of arrest for Gwamanda was issued in May, but he travelled to Brazil at the time.

“He promised to meet the investigation officer upon his return but he failed to do so,” the Sunday Times said.

After some back and forth, Gwamanda reportedly handed himself over to the police on Friday around 08:00.

This arrest should not come as a surprise. Retired politician and diplomat Douglas Gibson provided an overview of the situation in 2023.

Gibson, who was an attorney before entering politics, highlighted that Gwamanda faced serious criminal charges of fraud related to the funeral insurance scheme.

The scheme he ran in 2011 and 2012 was not registered with the Financial Services Conduct Authority (FSCA), making it illegal.

“Many residents of Johannesburg were defrauded when there were no funds to meet their funeral claims,” he said.

Former Joburg mayor Mpho Phalatse also accused Gwamanda of scamming Johannesburg residents and ignoring the country’s financial laws of the country.

“It is alleged that Cllr Kabelo Gwamanda, through his entity iThemba Lama Afrika, scammed innocent residents into investing in a funeral/investment scheme,” she said.

“However, the investors were left hanging dry when it was time to claim their benefits,” Phalatse continued in her statement.

“It is for these reasons that the Democratic Alliance in Johannesburg will be bringing these allegations to the attention of the SAPS.”

The Democratic Alliance reported the matter to the police for further investigation, along with a victim of the scheme.

In June 2023, the FSCA confirmed that it was investigating the iThemba Lama Afrika scheme linked to former Joburg mayor Gwamanda.

“The investigation is currently ongoing, and as such, no further details can be shared at this time,” the FSCA said in a statement.

“The investigation aims to establish whether such a contravention has occurred. Once the investigation is concluded, we will inform the public of the outcome.”

Despite the fraud allegations and warrant of arrest hanging over his head, Gwamanda continued to serve as Johannesburg mayor until August 2024.

After being ousted as mayor, he was appointed as a member of the mayoral committee (MMC) for community development.

Last week, his party, Al Jama-ah, designated Gwamanda as its representative in the Government of National Unity (GNU) dispute resolution mechanism.

Sunday World quoted party leader Ganief Hendricks saying that “despite controversies around Gwamanda, he believes he is suitable for the role”.

“He has special skills. And he is a senior party member and was the mayor for 16 months,” Hendricks told the publication.

Gwamanda is also the Al Jama-ah provincial secretary in Gauteng and the Secretary of the Minority Governing Parties.