The VBS Mutual Bank was a South African bank started as the Venda Building Society in 1982 and became a mutual bank in 1992. By 2016 the bank reportedly had around 30,000 depositors with all deposits in the bank totaling R800 million.

In a new twist in the Venda Building Society (VBS) saga, municipal officials, councillors (Mayors) and former members of the Limpopo ANC’s Provincial Executive Committee (PEC) are next in line to be arrested after depositing municipal monies into the VBS. This despite the advice from the Treasury against the practice, thus side-stepping the law.

The billions invested by local municipalities were allegedly exchanges for bribes in most cases, and money to pay facilitators. This comes in the wake of arrests last week of former executives of the now defunct bank and subsidiary companies for the looting of more than R2 billion. The money in question was mostly invested by stockvels and municipalities after being urged to do so by some members of the former PEC.

Following the forensic report titled “Limpopo Great Heist” by advocate Terry Motau, it emerged that between the period 2015 and 2018, some 20 municipalities deposited a total of around R3,5 billion with VBS and withdrew R2 billion. And when the bank closed, there were 15 of those municipalities which collectively had deposited an amount of R1,5 billion. These funds could not be recovered.

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Some of the seven accused who were arrested and appeared in court.

Mayors whose municipalities invested with the bank allegedly received several hundreds of thousands of Rands in envelopes from the commission agents and direct bribes paid to municipal officials. Though some municipal officials in Limpopo resigned before the scandal could emerge, others had to be suspended while politicians were dealt with by Lithuli house.

The municipalities that invested with VBS illegally against the advice of the Treasury were Makhado, Vhembe District, Giyani, Polokwane, Merafong District and the West Rand Local municipalities. Florence Radzilane, Vhembe District Mayor, was recalled as the mayor and the deputy secretary of the PEC, the Former Treasurer, Danny Msiza was removed from the PEC and in Giyani and Makhado, officials and mayors vacated offices. The largest share of the bank deposits came from poor municipalities in Limpopo and the North West. By the time of going to print no arrests of municipal officials had yet been made.

All seven of the eight suspects arrested (which included the bank’s top officials), in connection with the collapse of VBS were however granted R100 000 bail and have paid after appearing in the Palm Ridge regional court last week. This was after only two, the bank’s CEO, Andile Ramavhunga, and board member and former CFO of the SA Police Service Phalaphala Ramikosi, were able to pay on Thursday after appearing in court.

Others arrested were the bank’s former chair, Tshifhiwa Matodzi; treasurer Phophi Mukhodobwane; the former KPMG audit partner, who signed off on the bank’s allegedly falsified financial statements Sipho Malaba; and two former representatives of the Public Investment Corporation (PIC) on the bank’s board, Paul Magula and Ernest Nesane. VBS CFO, Paul Truter, was not in court as he is currently in Covid-19 quarantine. He will be added to the indictment this week. The matter has been postponed to the 8th of October.



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