Companies / 16 July 2018, 09:50am / Kabelo Khumalo
JOHANNESBURG - The fallout over the demise of VBS Mutual Bank deepened on Saturday as the Public Investment Corporation (PIC) launched a forensic investigation into its investment in the troubled bank and dismissed its head for legal counsel, governance and compliance, Ernest Nesane.
Nesane’s ouster from Africa’s largest fund manager managing R2.1trillion on behalf of chiefly government workers marked another step in the unfolding scandal that includes a complex web of auditors, politicians and the bank’s executives.
The fund manager earlier this year sacked its head of risk management Paul Magula for poor performance over the VBS matter. Both Nesane and Magula were PIC-delegated directors on the VBS board.
Deon Botha, head of corporate affairs at the PIC, said the body had resolved to appoint a forensic investigation to probe all transactions in relation to its investment in VBS.
“The PIC is concerned about the evidence that has been put before the VBS inquiry to date, which points to impropriety on the side of these two former PIC executives,” Botha said.
“The scope of the investigation, including its terms of reference and the time lines, will be made known once the forensic investigator has been appointed. The findings of the PIC’s forensic investigation into VBS will be presented to the PIC board.” The PIC is the second biggest shareholder in VBS, holding 25percent of the company’s equity.
The curator of VBS Mutual Bank, SizweNtsalubaGobodo represented by Anoosh Rooplal last week claimed that an unnamed PIC executive allegedly received a R5million bribe to facilitate payment of R350m towards VBS.
Botha said if proof emerged that any of its employees received such a bribe, the company would immediately institute disciplinary proceedings and report the matter to law enforcement authorities.
“According to the PIC’s investment records, a revolving credit facility amounting to R350m for VBS was approved in 2015 by the Priority Sector, Small and Medium Enterprise Fund Investment Panel, a sub-committee of the PIC’s Investment Committee. This was almost two years before the alleged bribe, cited in the curator’s affidavit, would have been paid to an unnamed PIC executive."
Rooplal this month instituted an urgent application in the High Court against Vele Investments for its liquidation. In addition, applications were brought against a further five individuals, being Tshifhiwa Calvin Matodzi, former chairperson of VBS Mutual Bank; Andile Attwell Ramavhunga, former chief executive of VBS Mutual Bank; Philippus Nicholas Truter, former chief financial officer of VBS Mutual Bank; Phopi Londolani Mukhodobwane, general head of treasury and capital management; and Robert Madzonga, former chief operating officer of VBS Mutual Bank, for the sequestration of their estates.
The South African Reserve Bank has instituted a forensic investigation led by advocate Terry Motau into possible fraud and malfeasance at VBS.
The investigation is expected to be completed by late August or early September. Rooplal has used the initial findings of the investigation to launch urgent applications to take steps to recover monies owed to VBS.
In the opinion of the curator, the 2017 financial statements of VBS did not present an accurate account of the mutual bank’s financial position and are thus being restated.
The bank’s external auditors KPMG earlier this year parted ways with the head of its largest business unit, financial services auditor Sipho Malaba, over the unfolding scandal. Malaba was the lead audit partner on VBS. Another partner at the firm, Dumi Tshuma, also left under a cloud.