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Probe finds R1.9bn looted from VBS Mutual Bank

An investigation into VBS Mutual Bank found that at least 53 people and companies may have benefited from the looting.

A probe into the failure of VBS Mutual Bank found that at least 53 people and companies may have benefited from the looting of R1.9 billion ($130 million) from the South African lender before its collapse.

Investigator Terry Motau, who was appointed by the central bank to lead the inquiry, is calling for arrests to be made and for tax authorities to swoop on those identified in his 139-page report, titled “The Great Bank Heist.” He also recommends that VBS be wound up and an auditor’s liability claim be brought against the company’s accountants, KPMG South Africa.

“There is no prospect of saving VBS,” Motau said in the report, which was posted on the central bank’s website on Wednesday. “It is corrupt and rotten to the core. Indeed, there is hardly a person in its employ in any position of authority who is not, in some way or other, complicit.”

While VBS’s collapse didn’t destabilise the country’s financial system, it exposes wrongdoing by politically connected individuals who went on spending sprees buying luxury cars and charting helicopter flights with the savings of almost 23 000 retail depositors. Motau’s report detailed a bank that issued payments to individuals in exchange for massive deposits from state entities and municipalities, which are at risk of losing the money they parked with VBS even though most retail deposits are safe.

Zuma link

Before being taken over by an administrator in March, the bank caught public attention in 2016 when it gave former President Jacob Zuma a mortgage to settle a Constitutional Court order to repay taxpayers some of the money spent upgrading his private residence.

According to the report, Andile Ramavhunga, former chief executive officer of VBS, said he oversaw the payment of R1.5 million to what he called the Dudu Myeni Foundation in order to secure a R1 billion deposit from a state-owned rail agency.

No foundation with this name existed and it may have been a reference to Zuma’s own foundation, which is chaired by Myeni, Motau alleged. Myeni, was ousted as chairwoman of South African Airways last year, having served on the board of the unprofitable airline in various capacities since 2009.

WhatsApp messages showed that SAA and state-owned ports and freight-rail operator Transnet were among Ramavhunga’s targets for deposits. Investigators also heard testimony claiming that VBS sought R2 billion of funding from the Public Investment Corp., Motau said. Ramavhunga “steadfastly denied that he was in any way involved in any unlawful conduct,” his report showed.

There were many examples of loans extended by the bank where “few, if any, monthly instalments were honoured,” the report said. “There are also very large overdraft facilities where no amounts were ever paid into the accounts and the facility limits simply increased to permit the escalating outflows.”

The Free State Development Corp. was the third-largest beneficiary of the plundering, having received R104 million. The institution in 2014 took over a controversial diary farm project linked to Zuma’s friends, the Gupta brothers, who have been accused of influencing key government decisions during the ex-president’s tenure, and ANC secretary general Ace Magashule. Zuma, the family and Magashule deny any wrongdoing.

‘Gratuitous payments’

Among the biggest recipients of “gratuitous payments” from VBS was Brian Shivambu, which several local news services including TimesLIVE and Daily Maverick identified as the brother of Floyd Shivambu, the deputy president of the opposition Economic Freedom Fighters. He received R16 million, according to the report.

The EFF, which had called for VBS to be defended from being taken over by regulators at the time of its curatorship, in a statement on Wednesday said “all who are responsible and illegally benefited from the fraud must be criminally prosecuted,” without directly referring to Shivambu. EFF national spokesman Mbuyiseni Ndlozi rejected calls to his mobile phone. EFF Secretary General Godrich Gardee referred queries to Ndlozi when contacted by phone.

The scandal has claimed two of the directors that the PIC, which manages R2.1 trillion on behalf of South African government employees, seconded to VBS’s board, the money manager said in a statement on Wednesday night. Paul Magula, the PIC’s head of risk management, was dismissed in April, while Ernest Nesane, its executive head of legal counsel, governance and compliance, resigned two days after testifying before Motau’s panel, the PIC said.

South Africa’s Financial Sector Conduct Authority has granted the PIC’s application to have the individuals debarred and the money manager will also bring criminal charges against them, it said. Both had confessed to Motau to receiving unlawful payments, the report said.

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Arrest them all!! Nothing like jail time to humble this regime!

Agreed.
I would be REALLY interested ti hear how many, if any, repayments former president Hehe! Has made..

At what stage does the ANC actually put up its hands and acknowledge that it is corrupt from top to bottom and that it is responsible for this very sad state of affairs?

No inward investment should take place until issues like this have been addressed and corruption rooted out with those responsible paying a very heavy price.

Never ever it is not their fault, WMC is the cause and van Riebeeck.

Don’t forget the ‘third force”.

and the EFF…corrupt plans they have….please print all the names

Surely the time has come for some prosecutions and long goal terms to all the looters. Where is Gerrie?

We read these stories every day and NOTHING happens…
So whats the point in writing them?
It’s all a charade.
Going through the motions.
Being outraged.
Discussing it at the weekend braai.
Shaking our heads.
And then moving on with our lives knowing that nothing is going to happen…except taxes will go up
And when someone is arrested the tax payer spends years helping defend these people. After all they can afford the best lawyers.

If I were a journalist I would start to wonder why I am writing all these stories. Is it just to depress us?

“We read these stories every day and NOTHING happens…”

Sadly things like financial fraud takes second place in the SA news cycle behind stories about someone calling their employees monkeys.

“The management of VBS are the best examples of black excellence”. The EFF said it when they accused the Reserve Bank of being racist for acting against VBS.

What does it say about the EFF when they protect criminals who steal from poor people? But then again, that is typical of all socialists.

Apparently they had a vested interest…. It appears Floyd’s brother was on the receiving end of some of VBS depositor’s cash to the tune of R 16 mill

He also appears to work for the EFF

There you go! That explains National Socialist (NAZI)remarks by the EFF. They are opportunistic looters trying to hide their tracks. What does it say about the intelligence of their supporters?

There are definite parallels between the Nazis and the EFF apart from the populist rhetoric.

The Nazis were also in favour of nationalising farmland and large corporations and only abandoned this policy once in power.

There is the obvious demonization of a particular group.

The charismatic leader, the symbols, the disruptive behaviour in Parliament, the image of being young and dynamic, dependence on the protest vote.

Also the idea that they want to attain power in a lawful way, with the underlying threat of violence.

Decolonization = Aryanisation

The political system enables the looters. The voters are basically stealing from themselves when they have blind faith in the empty promises of criminals.

“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.” ― Frédéric Bastiat

When reading this article, the music/lyrics of Dr ALBAN’s song “CASH MONEY” (1990’s) plays in my head.

I will now search for the same song on You Tube, so that I can relive the same feeling our famed ANC connected elite must’ve enjoyed back in the day 😉

can not wait for Johnny Cash’s song “End of the line” to play …become reality.

And yet again, NOTHING happens ….. except of course a possible R100m commission of enquiry.

Its time to bring the charges expeditiously, get a preservation order from the courts and secure all and any assets that can be found and put the tracer on all those transferred to relatives, friends, and out of the country. The state must bring the case forward, charge the culprits and reduce risks for appeals on the basis of technicalities, and send those found guilty behind ‘slot en grendel’ where they can spent the rest of their retirement amongst our finest five-star prisions. Politician or no politician… vat hulle Flaffie!

IF THIS COUNTRY DOES NOT JAIL THESE PEOPLE, THE INTERNATIONAL COMMUNITY WILL PROVE ONCE AGAIN THAT SOUTH AFRICA’S CRIMINAL JUSTICE SYSTEM IS FECKLESS AND THE LOOTING WILL CONTINUE!! The problem is most of these people are ANC. So, they will decimate their political appointee’s

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