NEF chief probed for corruption

2013-09-29 09:35

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Pretoria - A forensic investigation has been launched into the actions of National Empowerment Fund CEO Philisiwe Mthethwa following allegations of fraud and corruption.

According to the Sunday Times, this comes after the department of trade and industry received an anonymous tip-off. The fund came under the spotlight last month when it emerged that Mthethwa had granted Khanyi Dhlomo a loan of R34m to open Luminance, a luxury boutique in Hyde Park, Johannesburg.

Three weeks ago it emerged that the fund also approved a R9.8m loan to a company owned by Mthethwa’s brother, Nkanyiso Buthelezi. Three years on, not a cent has been repaid. Last week, it came to light that the fund wrote off R290m last year.

Mthethwa, who is married to Police Minister Nathi Mthethwa, has been the fund’s CEO since 2005. The newspaper reported that following a board meeting on Friday, Mthethwa has been put on special leave.

Role of the NEF

The National Empowerment Fund was established by the National Empowerment Fund Act No 105 of 1998 (NEF Act). According to the Fund's website, its was founded to be "a driver and thought-leader in promoting and facilitating black economic participation by providing financial and non-financial support to black empowered businesses, and by promoting a culture of savings and investment among black people."

The exact purpose of the Fund was brought into question by the Dhlomo case, with some critics, including the EFF and the SA Clothing and Textile Workers' Union, on the grounds that as she already has a successful business, Dhlomo should not have been granted a loan. The opponents of the decision say that it goes counter to the empowerment goals of the fund.

Mthethwa came out in defence of the decision, being quoted as saying that the retail sector needs transformation. According to a SAPA report she briefed parliament's trade and industry portfolio committee on the merits of the loan being granted, and various members of parliament including Trade and Industry Minister Rob Davies were quoted as saying they were satisfied that the deal was in line with the NEF's mandate.
Read more on:    nathi mtethwa  |  khanyi dhlomo

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