16 million reasons why the EFF defended VBS
JOHANNESBURG – With the EFF’s deputy president Floyd Shivambu’s younger brother Brian having been fingered in pocketing R16 million from the embattled VBS Mutual Bank, questions are now raised why the party so vehemently opposed the bank’s curatorship in March.
Below is the full EFF statement released on 11 March 2018:
The Economic Freedom Fighters notes that the South African Reserve Bank intends to put VBS Bank, the only black-owned bank in South Africa under curatorship. VBS is a Mutual Bank that is owned by the Public Investment Corporation (PIC) and black-owned investment company. The EFF believes that placing a bank under curatorship should always be a last resort, something to be done after exhausting different rescue measures and interventions. Opting for curatorship as the first measure undermines the bank and undermines black people’s participation in the ownership and control of financial services institutions.
The known reasons for placing VBS bank under curatorship seems to be the instruction issued by National Treasury to Municipalities, which had deposited money into the bank. Instead of allowing the bank to wind down the Municipalities’ deposits over a period of time, National Treasury issued an instruction, knowing that such an instruction will immediately collapse the bank. It is therefore wrong and unacceptable for Government to engage in activities that seek to undermine and hinder black people’s participation in the financial sector.
The EFF is aware that VBS is being victimised due to a loan it gave to Mr Jacob Zuma for a house in Nkandla. Had it been a white-owned bank that had offered Zuma a loan, they would not be subject to victimisation today. The EFF was the first to question VBS giving Zuma a loan, but we were led to believe, even by the Reserve Bank, that it was above board.
Pursuing the victimisation of a bank for this purpose is plainly wrong because VBS is the only bank which had a plan to finance properties and mortgages in rural areas. All other banks flatly refuse to finance mortgage and other properties in rural areas, therefore keeping rural areas underdeveloped as was intended under apartheid.
The EFF will write to the Reserve Bank and National Treasury to request that they should exhaust other rescue missions before they place the bank under curatorship. Placing a bank under curatorship is a reflection of poor bank supervision on the part of the Reserve Bank, and also an act that will prohibit black people’s participation in the ownership and control of financial services institutions.
When Capitec was reported to have engaged in unacceptable financial conduct, the Reserve Bank was quick to act and assure the markets and depositories because Capitec is owned by white people. This is despite the fact that key directors in Capitec had already sold their shares in anticipation of the exposal of the bank’s financial and credit misconduct. Why is the Reserve Bank quick in saving a white-owned bank, and quick in placing a black-owned bank under curatorship?
The EFF is of the view that ultimately the Nationalisation of the Reserve Bank should be expedited, and the licensing of the PostBank into a full commercial bank should be concluded soon. The Reserve Bank should then create an enabling environment for the existence and protection of black-owned banks and other financial services institutions, such as mutual banks, cooperative banks and insurance companies.
In the immediate, we call on the Minister of Finance to not grant the concurrence needed for curatorship to happen. The Minister must instruct the Reserve Bank and other shareholders, like the PIC to find a long lasting solution other than placing the bank under curatorship. It must not be easy to destroy financial services institutions that are owned by black people.