CAPE TOWN – SA Reserve Bank Deputy Governor Kuben Naidoo told the said on Wednesday that unaudited restated financial statements showed that VBS Mutual Bank had a negative equity position of R372 million.
Naidoo told the Standing Committee on Finance on VBS Mutual Bank that in early October 2018 the curator wrote to the Prudential Authority informing the Prudential Authority that he had compiled the restatement of the 2017 accounts on a best effort basis.
“In our previous meeting, we reported that we had asked the curator to restate the previous year’s financial statements and only on that basis could we make a firm decision on the future of the bank.
“The curator has done that and he has presented those restated financial statements to the (SA Reserve Bank). At this stage, they aren’t audited but they are what [is called] the best effort basis. We don’t think the picture will change dramatically.
“This restatement shows that the bank is insolvent to the tune of about R372 million, so there is negative equity of R372 million,” Naidoo said.
This after lead forensic investigator, Advocate Terry Motau, released a report that exposed massive fraud amounting to R1.9 billion that was looted from the bank.
Advocate Motau warned on Wednesday that recovering money lost to fraud at VBS Mutual Bank would be a long process with limited success.
"I'm not optimistic that we will recover a huge amount. If I were a betting man, I would say we would get 20 to 30 cents in the rand," Motau told Parliament's standing committee on finance.
The South African Reserve Bank has secured guarantees from National Treasury of up to R100 000 per depositor for VBS.
But Motau pointed out that this still left vulnerable depositors such as a grandmother who had deposited her savings of R150 000 with the failed bank and a community stokvel that had half a million rand in its account.