Court sets aside controversial R5 billion UIF contract

 ·19 Apr 2024

The Pretoria High Court has set aside a controversial R5 billion contract awarded by the Unemployment Insurance Fund (UIF) to Thuja Capital.

Additionally, the court ordered Thuja’s owner, Mthunzi Mdwaba, to refrain from making “defamatory remarks” (corruption allegations) against the Minister of Employment and Labour, Thulas Nxesi.

Invalid contract

The court ruled that the multi-billion-rand contract, which promised to create over 25,000 jobs, was “invalid” and set aside.

The contract would have given the UIF a 19% stake in Thuja’s investments for R5 billion from its coffers.

This would have included a R1 billion investment into an unnamed bank and insurance company, with the remaining R4 billion being split between R2.5 billion for unemployed individuals in South Africa to start businesses and R1.5 billion for providing loans to businesses.

However, an investigation by Times Live discovered that the Department of Employment and Labour and UIF planned to invest in the Thuja Capital Fund despite the company having no premises, website, or track record.

Corruption allegations

Mdwaba was also “interdicted from publicly uttering any statement to the effect that the [Labour and Employment Minister Thulas Nxesi] had been corrupt or extortionate when prohibiting the implementation of the contract,” said the court.

Mdwaba had previously said that three Cabinet ministers, including Nxesi, Enoch Godongwana, and Blade Nzimande, approached him and demanded “gateway fees” (bribes) of R500 million – which would be 10% of the R5 billion UIF deal.

All three ministers have denied these allegations.

This was Mdwaba’s second defamation case loss. In January, Godongwana won his defamation case against Thuja’s owner for his public comments accusing the finance minister of soliciting a R500 million bribe.

Mdwaba has since slammed the rulings, saying that he intends to appeal this decision and will “go to the highest court in the land to make sure that we demonstrate that we will not be bullied and intimidated by anybody.”


Read: Doubts over government’s R24 billion unemployment programme

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