Nxesi files urgent court application to set aside R5bn UIF contract

Labour minister Thulas Nxesi says he has taken a decision to have the R5bn agreement concluded between the Unemployment Insurance Fund (UIF) and CEO of Thuja Capital Fund Mthunzi Mdwaba be set aside. 

“Today, acting as the executive authority of the department of labour, I signed my affidavit and we  are filing a court application to set this agreement aside.” 

The agreement in question was for, among others, funding of job creation, allegedly assisting the UIF in creating employment 

Briefing the media on Thursday, Nxesi said he heard of this agreement through the media in January. He then established that approvals by the UIF governance processes were not obtained. He then gave instructions for the suspension of the implementation of the programme and for any contemplated payments to Thuja to be stopped.

"Mr Mdwaba’s allegations of seeking bribes against myself, and others, are false and unsupported by any actual evidence. Let me be clear: I categorically deny these recent allegations of corruption,” Nxesi said. 

Nxesi said the more recent allegation is that he would approve the implementation of the agreement to pay R5bn to Thuja in return for a corrupt fee of 10% of the contract amount, which is R500m.  

"How would I be able to siphon off money from a deal I have already stopped,” Nxesi asked. 

He said Mdwaba will now have to prove these  allegations in court. 

Nxesi said the decision to have the agreement set aside was because it was concluded in breach of the Public Finance Management Act, which provides that before a public entity concludes some transactions, the accounting authority must inform the relevant treasury of the transaction and submit particulars of that transaction to the cabinet member responsible for that department in parliament. This was never done.

In his affidavit before court, Nxesi said he has challenged Mdwaba to present his evidence in support of his allegations that he had demanded any payment of a corrupt fee in relation to the agreement. 

“If he cannot produce that evidence, I have asked the court for an interdict to stop him from promoting his campaign of false and unsupported lies.” 

Nxesi said as the department was preparing papers in relation to the R5bn agreement, further allegations were made that he and former labour department director general Thobile Lamati colluded in illegally siphoning off R3bn from the UIF's programme designed to ensure that unemployed UIF beneficiaries were reintegrated into the labour market. 

"On the last issue of R3bn, I am happy that this will be investigated by law enforcement agencies to establish the processes followed and the roles of all parties concerned,” Nxesi said. 

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