Kabelo Gwamanda (pictured), the former mayor of Johannesburg and current Member of the Mayoral Committee (MMC) for community development, has been placed on special leave following his arrest on Friday in connection with an alleged funeral insurance scam that he purportedly operated more than a decade ago.
The scam, which allegedly took place between 2011 and 2012 through Gwamanda’s company, Ithemba Lama Afrika, involved conning Soweto residents into paying monthly contributions for funeral policies. When policyholders attempted to claim on these policies, Gwamanda and his company had allegedly vanished.
The arrest followed the efforts of one victim who, after discovering that the company had disappeared, opened a case at the Protea Glen police station.
The victim had taken out a policy with Ithemba Lama Afrika and only realised that the business had relocated when she went to claim after a death in her family. Upon investigating further, she discovered other victims of the scheme. Many investors believed that the two directors of the company had committed suicide after they failed to return funds to policyholders. However, to her shock, she later recognised one of the supposed deceased directors – Gwamanda – on television following his appointment as Johannesburg’s mayor.
The police report revealed that Gwamanda had allegedly disappeared with clients’ money when the scheme collapsed in 2012.
The FSCA began investigating the matter in 2023 after receiving complaints about the funeral scheme and its operations. However, at the time of the investigation, the FSCA could not share further details, because the investigation was ongoing. The purpose of the inquiry was to determine whether Gwamanda’s actions contravened financial regulations.
A warrant for Gwamanda’s arrest was issued in May 2024, but he was in Brazil when the authorities sought to apprehend him. Despite assurances that he would report to the police upon his return to South Africa, Gwamanda failed to do so, leading the police to track him down. He finally handed himself over to law enforcement on 18 October and was charged with fraud. He appeared in court on the same day and was granted bail.
In a video on Gwamanda’s X page on 20 October, he discusses his arrest, responding to a question from an unidentified interviewer whose voice is heard but who is not shown.
“You know, in South Africa as a country, growing up black, it’s a possibility that none of us can avoid, regardless of the path you choose, whether you choose to serve or to engage in nefarious activities. The fact of the matter is that the relationship that South Africans have with law enforcement is a relationship that needs to be worked on very strongly, so that we understand what each of our roles are in this undertaking,” he said.
Gwamanda, an Al Jama-ah councillor, was elected as Johannesburg’s executive mayor in May 2023, a role he held for 15 months before resigning in August 2024 because of mounting pressure from civil society and opposition political parties.
His departure from the mayoral position did not end his political career, because he was subsequently appointed MMC for community development shortly thereafter.
On Tuesday, Johannesburg Mayor Dada Morero announced that Gwamanda has been placed on special leave, effective immediately, and relieved of all executive duties.
Morero, who met with Gwamanda on Tuesday morning, said the severity of his allegations demanded a proactive response to protect the integrity of the Mayor’s Office. Morero said he would appoint an acting Community Development MMC.
