Johannesburg – Kabelo Gwamanda, the former mayor of Johannesburg, has been arrested on charges of fraud related to an alleged funeral policy scam. The arrest, confirmed by police spokesperson Colonel Dimakatso Nevhuhulwi on Friday, follows an investigation by the Financial Sector Conduct Authority (FSCA). Gwamanda, a councillor for the Al Jama-ah party, reportedly handed himself in to authorities.
The allegations centre around Gwamanda's former business, iThemba Lama Afrika, which operated in 2012. News reports detail a scheme where residents of Soweto paid monthly premiums for funeral insurance, only to find themselves unable to locate the company's offices when seeking payouts or information. One client, according to police reports, conducted her own investigation, discovering that the company's directors were allegedly reported to have committed suicide. This client's statement highlights the shocking twist: "Investors were under the impression that both directors had died, only to see one suspect appearing on TV as the mayor of Johannesburg.”
The FSCA's investigation, concluded last year, reportedly found that Gwamanda operated the business illegally and subsequently disappeared with clients' money. A search of company registers by The Citizen yielded no results for iThemba Lama Afrika. Gwamanda's office previously denied knowledge of any FSCA investigation or findings. In a statement to the Sunday Times, Gwamanda claimed the business had collapsed but that he had resolved the issues with his clients, stating: “I had taken ownership, I had presented myself to my clients and told them, ‘This is where the business is, we have failed, so what do we do and what are your expectations from me?’ And then [the matter] was closed.” He previously dismissed the allegations in the Sowetan as a "character assassination," urging anyone with proof to open a case.
The Democratic Alliance (DA) welcomed the arrest, issuing a statement that highlighted their earlier warnings about Gwamanda. DA Johannesburg caucus leader, Belinda Kayser-Echeozonjoku, stated: "This development, while overdue, further confirms the DA's warnings about the ANC and its coalition partners' failure to provide ethical and transparent leadership for the people of Johannesburg. Since his election as mayor, serious allegations of fraud and deception hung over Gwamanda's head, allegations which the DA raised as early as May 2023. Yet, despite these warnings, the ANC chose to support him as the mayor of Johannesburg, dismissing the concerns as mere 'gossip'." Kayser-Echeozonjoku added: "For years, Gwamanda avoided accountability, even leading the city as mayor while his victims were left believing he had died, a shocking betrayal of the public's trust."
Al Jama-ah councillor Thapelo Amad declined to comment, stating that the party would release a formal media statement. Colonel Nevhuhulwi confirmed that Gwamanda's case is already before the courts. The National Prosecuting Authority has been contacted for comment.
The ANC’s response to the allegations prior to the arrest was dismissive. ANC regional secretary Sasabona Manganye stated: “We vetted the mayor, and he met the minimum basic requirements. The vetting is the basic vetting of whether he has any criminal record, if there is any pending criminal case against him, and if he is insolvent. These things qualified him on whether he could be a mayor or not… That is why we are not worried.” This statement, made before the arrest, reveals a level of confidence that now appears misplaced.
