South Africa - Pretoria - 11 March 2019 - Paul Magula before the commission of inquiry into allegations of impropriety regarding the public investment corporation held in Pretoria. Picture: Thobile Mathonsi/African News Agency(ANA)

PRETORIA – Former executive head of risk at the Public Investment Corporation (PIC) Paul Magula confessed to Terry Motau SC’s forensic investigators that he received about R7.6 million from VBS Mutual Bank for personal gain.

This was revealed at the PIC Commission of Inquiry led by Judge Lex Mpati by a deputy governor of the South African Reserve Bank, Kuben Naidoo, who said the money was paid into front companies owned by Magula.

Magula is one of two former executives of the PIC who served on the board of the VBS Mutual Bank that was debarred by the Financial Sector Conduct Authority.

In his submission to the commission, Magula denied any wrongdoing with regard to the VBS looting: “I have never participated in any illegal, fraudulent activities during my tenure as a VBS board member. Some of the things like fictitious deposits, fraudulent withdrawals, bribes… that are said to have happened at the VBS I got to know about when I went before the prudent authority’s (Reserve Bank’s) forensic investigators." 

Naidoo told the commission that monthly payments of R300 000 all took place on the same date of each month, that Vele Investments made to related parties including Magula’s front companies.

He said Magula and the other related parties admitted that there was no lawful cause for these payments. He said Magula and Nesane said these payments were made to them to buy their silence.

He said Magula, after first giving a great deal of false evidence in this regard, eventually found himself restrained to retract his prior evidence and to seek immunity against self-incrimination. 

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.