Co-operative Governance and Traditional Affairs Minister Zweli Mkhize. File picture: ANA/Jonisayi Maromo
Durban - Co-operative Governance and Traditional Affairs Minister Zweli Mkhize has denied claims that he influenced municipalities into investing millions in the embattled VBS mutual bank, which hit a liquidity crisis earlier this year.

A total of 15 municipalities had invested a total of R1.5 billion with the controversial bank before it was placed under curatorship in March.

Last month, the South African Reserve Bank told Parliament that the municipalities were unlikely to recover these funds.

The municipalities had invested in the bank despite an instruction by the Treasury last year that municipalities were forbidden from investing in mutual banks, according to the Municipal Finance Management Act.

The act states that a municipality may not open a bank account with an institution not registered in terms of the Banks Act.

Mkhize said he learnt of these transactions only when the story was reported in the media.

He was responding to claims made by United Democratic Movement leader Bantu Holomisa during a television interview in which he said Luthuli House, the ANC headquarters, had targeted some municipalities for looting.

“The question is: Who gave the authority to the municipalities to go and invest in that bank, because they have no Treasury authority?” Holomisa told eNCA during an interview. He said evidence pointed to a “certain individual” at Luthuli House, in reference to Mkhize.

But Mkhize rubbished these claims, saying in a statement that when he was treasurer-general of the ANC, he engaged with many businesses, but it all was above board, as his role was to engage those businesses on ANC policies.

“The insinuation that when I engaged with business it was with an unscrupulous intention of doing them a favour or using undue influence for them to secure work, contracts or deals with government departments, municipalities or state-owned entities is false, unfounded and demeaning,” Mkhize said.

Mkhize added he was invited to VBS Bank in 2016, and at no stage did the bank ask him for any favour.

Mkhize challenged Holomisa to assist the agencies investigating the matter if he has information.

In response to this, Holomisa tweeted that he had already submitted a report to President Cyril Ramaphosa, asking that some of the allegations be probed.

Mkhize said the ANC’s fundraising activities were formal and public. “If any other funds were exchanged with VBS in the name of the ANC while I was still treasurer-general of the organisation, I am quite keen for this to be disclosed in full so we can expose such scams publicly.”

ANC spokesperson Pule Mabe said the statement by Mkhize was comprehensive and had put into context the ANC’s dealings with business.

“The former treasurer-general has issued his statement which was publicised widely, and really gives context to the different engagements and what his role would have been there. It is important that various institutions doing (investigative) work are given the necessary space to conduct their investigation so that work happens without any hindrance or influence from other parties. These things are necessary to assert good governance,” he said.

Mkhize said he was deeply concerned about the R1.5bn, and, as co-operative governance and traditional affairs minister, he supported investigations into the matter by the Reserve Bank, the Auditor-General as well as the police.

“We are determined to get to the bottom of this because the loss of R1.5bn of municipal funds is a serious loss that negatively impacts on service delivery.”

The Mercury