The Al Jama-ah councillor is embroiled in an insurance fraud scandal based in Soweto. Picture: Itumeleng English/ Independent Newspapers
Kabelo Gwamanda, the former Johannesburg mayor and Al Jama-ah councillor has been arrested in connection with an alleged funeral policy scam that he allegedly ran from 2011 through his company, Ithemba Lama Afrika.
It is alleged that the former mayor conned innocent Soweto residents into the scheme, where they paid monthly payments for funeral insurance.
He operated the business from 2011 and then allegedly ran away when policyholders tried to claim from the scheme.
Gwamanda is currently a Member of the Mayoral Committee (MMC) for community development in Johannesburg.
He was appointed to the position in August after he was removed as Joburg mayor after a year in office.
Gwamanda was arrested after one of his alleged victims opened a case with the Protea Glen police.
In July 2023, the Financial Sector Conduct Authority (FSCA) confirmed that it was investigating complaints received about Ithemba Lama Afrika and Gwamanda.
“The investigation is currently ongoing, and as such no further details can be shared at this time,” the FSCA said at the time.
“The purpose of the investigation is to establish whether such a contravention has occurred. Once the investigation is concluded, the Authority will inform the public of the outcome of the matter”.
The victim, who opened the case against Gwamanda in January told police that she took out a policy with Ithemba Lama Afrika, but when she came to report a death and claim her funeral policy money, she discovered to her horror that the offices had moved.
“She did her own investigation and found other victims. She was told that the two directors had committed suicide after failing to pay money back to investors,” according to the police report.
“Investors were under the impression that both directors had died, only to see one suspect appearing on TV as the mayor of Johannesburg,” the report added.
Police then issued a warrant of arrest for Gwamanda in May 2024 but he was out of the country.
Police were forced to trace Gwamanda after he failed to meet investigators when he was back in South Africa.
He finally handed himself over to police on Friday.
Gauteng police have yet to comment despite IOL fielding calls and WhatsApp text messages. This story will be updated once they have responded.
A media liasion officer for Al-Jama-ah has promised to send a statement.
Calls for him to resign as an MMC and Councillor have been made by ActionSA.
Herman Mashaba said on X, that he must not only resign as an MMC, but he must also resign as a Councillor with immediate effect.
Mashaba said that the party will be taking this matter on.
“ActionSA is going to act on this,” he said.
He must not only resign as an MMC, he must resign as a Councillor with immediate effect. @Action4SA is going to act on this. https://t.co/zEc79FnYVX
— Herman Mashaba (@HermanMashaba) October 20, 2024
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