The Small Enterprise Development and Finance Agency (SEDFA) has released commentary about the arrest of one of the two individuals who were arrested in Phalaborwa for allegedly defrauding the Agency of over R800 000.
IOL reported that a 58-year-old company director and a 49-year-old former business advisor from its Mopani Branch were arrested on 17 March 2026 by the Directorate for Priority Crime Investigation (Hawks).
According to the release, the arrest follows an investigation which was a collaborative effort between SEDFA and DPCI since April 2025, when the Hawks executed a search and seizure operation at the Mopani office. The Agency shares that it has been fully cooperating with law enforcement authorities in their investigation and will continue to support all efforts to ensure accountability.
The pair are expected to make their first appearance at Tzaneen Magistrate’s Court on March 19, facing charges of fraud, corruption, theft, and money laundering.
The Road So Far
The outlet further reported that Colonel Katlego Mogale, the provincial spokesperson, shared that the Hawks uncovered “sinister activities which allegedly include theft, fraud, corruption and money laundering” at the Tzaneen office. Mogale reportedly also added that the team ensured that a search and seizure warrant was applied for, duly authorised and executed on 24 April 2025, at SEDFA offices, “wherein electronic gadgets and documents were seized for further analysis while investigation continued.”
The allegations in question are:
- fraudulent funding applications,
- misrepresentation of training documentation, and
- possible money-laundering activity.
“The employee in question resigned from SEDFA in December 2025, and the matter is now fully in the hands of law enforcement authorities,” the statement says. “SEDFA maintains a zero-tolerance approach to any form of fraud, corruption, or unethical conduct.”
Responding to Fraudulent Allegations
In her statement on 18 March 2026, Ms Masefako Dikgale, chairperson of the portfolio committee on small business development, said that the accompanying arrest of a company director who allegedly benefited from a fraudulent application underscores the seriousness of the matter and the extent to which public resources may have been compromised.
Ms Dikgale said the committee views these developments as a critical step in safeguarding the integrity of institutions established to support small enterprises. “SEDFA exists to empower and uplift small businesses, particularly those owned by historically disadvantaged individuals. Any attempt to divert these resources for personal gain is a direct attack on economic transformation and inclusive growth.”
SEDFA has assured its stakeholders and the public that robust systems and controls are in place to safeguard the integrity of its processes. “The Agency remains committed to transparency, accountability, and the protection of public resources. It maintains a zero-tolerance approach to any form of fraud, corruption or unethical conduct and supports all efforts to ensure accountability.
“The Agency continues to deliver on its mandate to support small enterprises and drive inclusive economic growth across South Africa,” it concludes.
No comment has been made about the involvement of the second individual.
Further arrests have also not yet been ruled out.
SEDFA’s Role In South Africa
SEDFA is the collective formed from the Small Enterprise Development Agency (Seda), Small Enterprise Finance Agency (SEFA) and the Co-operative Banks Development Agency (CBDA)
The state-owned entity was launched in October 2024 and is responsible for providing integrated financial and non-financial support to small businesses and cooperatives. Its purpose is to drive job creation, economic growth, and empowerment of historically disadvantaged communities across South Africa.
