Africapacity must comply with the Mutual Banks Act before buying VBS
CAPE TOWN – The SA Reserve Bank on Thursday said that the authorisation to conduct the business of a bank/mutual bank (banking licence) was not transferable, putting a damper on investment holding company Africapacity’s ambitions to acquire VBS Mutual Bank.
Africapacity Investment Holding, a private company was incorporated in South Africa in 2009, expressed interest to acquire VBS, which was placed under liquidation in November 2018, for R2 billion, according to reports.
In a statement on Thursday, the Reserve Bank said it was aware of the assertions made by Africapacity of its intention to buy VBS Mutual Bank or part thereof. “The authorisation to conduct the business of a bank/mutual bank (banking licence) is not transferable and requires a formal new application for such authority to be submitted to the regulatory authorities.
“All or part of a bank/mutual bank’s assets (which do not include the banking licence) may be acquired with the prior approval of the regulatory authorities.”
VBS is, therefore, under the control of the duly appointed provisional liquidator, Anoosh Rooplal, according to the statement by the Reserve Bank. “Any proposals relating to the proposed acquisition of the assets of VBS should be directed to Mr Rooplal.”
The central bank said should Africapacity wish to acquire the assets of VBS, it would need to comply with the requirements of the Mutual Banks Act. “Although Africapacity has written to the SARB and the Minister of Finance stating its intention to buy VBS, it has not formally applied for a banking licence.”
VBS was placed into liquidation by the High Court of South Africa on 13 November 2018 and its banking activities and licence suspended.
Advocate Terry Motau, the forensic investigator who looked into the rot at VBS, concluded that the rot in the bank ran too deep to salvage.
Motau in his final report said an amount of R1.8bn was gratuitously received from VBS by about 53 entities over the period 1 March 2015 to 17 June 2018.
KPMG’s lead auditor in the VBS scam, Sipho Malaba, was cited as having played an active role in covering up the fraud and a handsome R34 million handshake for his efforts.
KPMG said the publication of the report of the Reserve Bank‘s forensic investigation into the affairs of VBS and said the report included serious findings concerning the conduct of a former KPMG partner.
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