Paul Magula is one of the former PIC executives that has been debarred by the FSCA. Photo: Thobile Mathonsi/African News Agency(ANA)

PRETORIA – Two former executives of the Public Investment Corporation (PIC), who served on the board of the VBS Mutual Bank, have been debarred by the Financial Sector Conduct Authority (FSCA).

This was revealed by the FSCA divisional executive for licensing and the business centre, Felicity Mabaso, during her submission to the PIC Commission of Inquiry. She said the PIC executives on the board were implicated in the VBS Bank saga, which raised a red flag and had to be debarred from VBS activities.

One of the implicated, former executive Paul Magula, who was the PIC’s executive head of risk and compliance, vehemently denied allegations that he participated in any illegal, fraudulent activities during his tenure as a VBS Mutual Bank board member. 

Magula said in his recent appearance before the PIC Commission of Inquiry that it was an undeniable fact that he was a board member at VBS Mutual Bank for some time, as a shareholder representative of the PIC, when the bank began to have problems.

“Some of the things like, fictitious deposits, fraudulent withdrawals, bribes, that are said to have happened at VBS I got to know about when I went before the Prudential Authority’s forensic investigators. I am willing and ready to subject myself and co-operate with the law enforcement agencies,” he said.

Magula was dismissed from the PIC in 2018.

The other implicated executive, Ernest Nesane, who was executive head for legal counsel, governance and compliance resigned from the PIC in July 2018, after testifying before the forensic investigation into VBS Mutual Bank. Following his evidence, the PIC was made aware of serious allegations of impropriety against him.

A debarred person may not render financial services or act as a representative or key individual of a representative, of any financial services provider, unless the person has complied with requirements for the reappointment of a debarred person as a representative or key individual of a representative, according to the Financial Advisory and Intermediary Services Act.

As company directors and PIC executives, Nesane and Magula were entrusted to ensure that VBS Mutual Bank applied the highest standards of ethics and good corporate governance.