‘Dead’ former mayor Kabelo Gwamanda arrested over funeral policy scam

Once thought to be dead by his alleged victims, a former funeral policy boss got a new life as mayor of Africa’s richest city. But Kabelo Gwamanda’s alleged scam caught up with him this week when he was reportedly arrested for alleged fraud.

According to the Sunday Times, Gwamanda handed himself over to the police on Friday morning after a warrant of arrest was reportedly issued for him in May.

An alleged scam and ‘dead’ directors

The Al Jama-ah politician sold funeral policies to Soweto residents in 2011 through his company Ithemba Lama Afrika.

Those who bought policies paid monthly premiums to the company, but when they had complaints or wanted their money could not find its offices.

One frustrated client, according to the police report, did her own investigation and was told the company’s two directors committed suicide.

“Investors were under the impression that both directors had died, only to see one suspect appearing on TV as the mayor of Johannesburg.”

Investigations into Gwamanda

She opened a case against Gwamanda and an investigation by the Financial Sector Conduct Authority (FSCA) followed.

The authority last year reportedly found he had operated the business illegally and disappeared with people’s money.

The Citizen‘s search for Gwamanda’s business on a company register did not return any results.

Gwamanda’s office told News24 last year that they were unaware of any investigation or finding by the FSCA.

He told the Sunday Times his business had collapsed but he had resolved the issues with his clients.

“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 had earlier told the Sowetan the allegations were a “character assassination” and urged anyone with proof of the claims to open a case against him.

‘Won’t entertain gossip’

ANC regional secretary Sasabona Manganye had earlier batted away the allegations, saying the party did not want to “entertain gossip”.

“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,” he told News24.