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Thuja Capital: Labour minister suspends R5bn fund after allegations of impropriety
The Thuja Capital Fund project has been suspended by Minister Thulas Nxesi after a media report called the multi-billion-Rand UIF project into question.
Employment and Labour Minister Thulas Nxesi. Picture: Gallo Images / Foto24 / Deaan Vivier
In a brief statement issued on Sunday, the Minister of Employment and Labour, Thulas Nxesi announced that he had called for the suspension of the Thuja Capital Fund Project after it had been brought into question by recent media reports.
“I have since instructed [the] Director General (DG) of the Department of Employment and Labour (DEL) and UIF Commissioner to suspend this project pending [a] full report on all the matters that are raised about it in media reports and related matters,” said the minister in a statement.
Nxesi was referring to a Sunday Times article published on 30 December titled ‘Government throws R5bn at ‘unique, untested thing’.’
Accusations of impropriety
The article laid out complaints by what it calls “UIF insiders” about a push by the department’s director-general, Thobile Lamati to get a project approved that would see billions of workers’ money invested in Thuja Capital Fund. A company that these insiders say exists only on paper.
Sunday Times reports that Thuja Capital Fund has no premises, website or track record and that one of its directors, Mthunzi Mdwaba is the chair of Productivity SA – a Labour Department entity tasked with “saving jobs and upping productivity.”
The other two people listed as directors of Thuja Capital Fund are Mdwaba’s son Litha, a rapper, and Alta Roets.
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In their statement, the Ministry of Employment and Labour confirmed that Thuja Capital Fund Project a project under the department’s Labour Activation Programme (LAP), “run by Unemployment Insurance Fund (UIF) together with some partners.
Labour Activation Programme (LAP)
LAP is a programme within the Department and is funded by the Unemployment Insurance Fund (UIF).
According to government, the purpose of the programme is to skill and up-skill the unemployed youth and unemployed UIF beneficiaries in order to gain access to the labour market, and to establish their own businesses.
In 2019, the department put out a call for proposals to train unemployed people and place them in jobs under the program and Thuja is one of many private companies that responded to the call.
Pushing for Thuja
The sources cited in the article highlighted how the department’s DG pushed for the project to get the green light on multiple occasions, starting with an initial push for R2 billion to be paid to Thuja in the first quarter of 2023. He did so by writing “several letters to the department and the UIF” pushing for the agreement be concluded and payment made.
The money was supposed to be used to start the company’s operations.
“Another R2 billion will be paid in the second quarter and the remaining R1bn in the third,” reported Sunday Times.
All this in spite of the fact that Thuja’s concept had not been properly evaluated by the necessary oversight mechanisms.
In response to the accusations levelled against him, Lamati argued that he was motivated, in part, by South Africa’s glaring youth unemployment stats and the need to resolve this issue.
He also reportedly told the publication that UIF did “not have the capacity” to conduct due diligence on the “unique” proposal.
When contacted for comment on how his company works, Mdwaba told the publication that he could not explain any of it “for confidentiality reasons.”
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Compiled by Kaunda Selisho
