South African Reserve Bank file photo
South African Reserve Bank file photo

An economic review of the past week

By Luyolo Mkentane Time of article published Jun 2, 2018

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JOHANNESBURG - The SA Reserve Bank (Sarb) is a step closer to finding out what went wrong at the embattled Venda-based mutual bank VBS, put under curatorship in March following a liquidity crisis.

This week the central bank announced it would establish a commission of inquiry into the bank to look at possible fraud and whether the regulator was asleep on the job in terms of its oversight.

Sarb deputy governor Kuben Naidoo, briefing MPs in Parliament, said it was the full intention of the Sarb governor Lesetja Kganyago to appoint a commission of inquiry.

“There are two sides to the story. The registrar will tell you the information we were receiving from the bank was not the truth. They were lying to us and the other side of the story, but yes you the regulator, surely you should have known this,” he said.

Naidoo said VBS lied to Sarb about a R470 million capital requirement it was obliged to have as a buffer to pay back depositors.

“They had deposits with the national payment system of about R120m and the remaining R350m should have been held as any tier one capital in a bank in government paper or in cash,” said Naidoo.

“It was only on day one of curatorship did we realise there is nothing there. There's no capital. It's gone. Every month we received the returns from this bank.”

The bank’s total retail deposit book stood at R390m.

Also making news this week was Public Investment Corporation (PIC) chief executive Dr Daniel Matjila.

His detractors want him shown the door from Africa’s largest fund manager, but his employer is having none of it. The PIC said Matjila was going nowhere and dismissed as false and malicious, persistent media reports that the chief executive was about to be suspended.

“The PIC views these unsubstantiated allegations as part of a campaign to destabilise the PIC and cause harm to the institution’s reputation,” the fund manager said in a statement.

“The PIC would like to reiterate that Dr Matjila remains the CEO of the PIC and that the PIC management team continues to carry out the corporation's investment mandate and the important responsibility of managing the assets of its public sector clients.”

On Wednesday, the National Treasury also threw its weight behind Matjila as a legal showdown between the ministry and Matjila’s detractors looms large.
In a letter to Finance Minister Nhlanhla Nene, the United Democratic Movement (UDM) demanded that Matjila be suspended immediately over allegations that he had misappropriated the PIC’s funds to his lover.

The UDM gave Nene and the PIC until Thursday to suspend Matjila and institute an independent inquiry into him.

The UDM claimed that Matjila arranged and facilitated through one of the entities funded by the PIC, Ascendis, to transmit funds to the tune of R300 000 for the benefit of a woman with whom he was romantically linked.

However, the National Treasury has repudiated the allegations against Matjila, saying the PIC was doing very well under his leadership. Matjila has survived two attempts to get rid of him at the helm of Africa’s largest fund manager.


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