Parliament – The VBS Mutual Bank received more than R300 million in loans from the Public Investment Corporation (PIC) since last year, according to details of the unlisted investments of its Isabaya fund, revealed on Tuesday.
The bank, which granted President Jacob Zuma a loan to repay state funds spent on his Nkandla home, received four different loans to that total since July last year.
It currently owes about R300.427 million, according to the information given to Parliament’s standing committee on finance by the PIC and Deputy Finance Minister Mcebisi Jonas at a briefing on Tuesday.
The submission also reveals earlier loans of R6 million - extended in 2011 and 2013 - to the Venda Building Society, the name under which the bank traded in the past.
The PIC and Dyambeu Investments are the bank’s two biggest shareholders. Established in 1982, the bank struggled financially for a considerable period but managed to post a profit of R4.9 milllion in the last financial year.
It has just four branches but became widely known after granting Zuma a loan to repay R7.8 million by order of the Constitutional Court for luxuries added to his rural home during a costly and hugely controversial security upgrade.
The president transferred the sum to National Treasury in September.
Explaining last month why Zuma turned to this particular financial institution, his spokesman Bongani Ngqulunga said VBS was “one of the few financial institutions which offer home loans in respect of land owned by traditional authorities”.
The land on which Zuma’s home stands is owned by the Ingonyama Trust.
The chairman of the PIC, Daniel Matjila, said on the sidelines of the briefing: “It is not under our control who they give loans to. In terms of direct influence on the board [of the bank], we have no influence.”
The PIC made public the full list of the R44.6 billion worth of investment in unlisted entities by the Isabaya Fund following pressure from the Democratic Alliance for greater transparency.
Committee chairman Yunis Carrim said opposition parties would seek to claim credit for the disclosure but probably be disappointed by the fact that what came to light was above board.
“What has come of it? Nothing but good work. The PIC should be congratulated,” he said.
The Isabaya Fund was set up in 1999 with the aim of investing in projects that would generate social good, while yielding positive results for the PIC’s clients, which include the Government Employees Pension Fund.
The portfolio is roughly divided in half between developmental projects, which accounted for 23.5 percent of its investments and private equity, at R21 billion.
It includes a sizeable R9.7 billion worth of investment in renewable energy companies, and roughly R6 billion in affordable housing and R3 billion in agriculture respectively. About a third of the fund’s investments were in infrastructure.