Johannesburg - It is the end of the road for VBS Mutual Bank after the High Court in Pretoria ordered its final liquidation in a court application which lasted less than 10 minutes.
The Presiding Judge JW Louw issued the order of liquidation after the parties including the Reserve Bank’s Prudential Authority and the Mahikeng Local Municipality had a prior agreement on the nature of the draft order sought.
The court ruling in favour of Prudential Authority and the Mahikeng Local Municipality followed an urgent court application initially sought by Prudential Authority on October 29.
Judge Louw instructed the immediate implementation of the liquidation order. No parties opposed the application despite media reports to the contrary.
Prudential Authority’s chief executive officer (CEO) Kuben Naidoo lodged an urgent application in the high court asking the court to urgently liquidate VBS as it “is hopelessly insolvent, both factually and commercially”.
Naidoo in his liquidation application included “The Great Bank Heist” report compiled by Advocate Terry Motau SC. The report detailed the massive scale of fraud and corruption which took place since 2015 and allegedly masterminded by some of the shareholders and senior officials of the bank. They looted almost R2 billion and the majority of the funds were deposited by several municipalities in Limpopo, North West and Gauteng.
“The report of the investigator, which has been made publicly available, reveals that there was widescale looting and pillaging of monies on deposits with VBS. The 2017 audited financial statements of VBS were fraudulently and materially misstated,” Naidoo said.
He said there were fraudulent misrepresentations made in the monthly returns which VBS was obliged to submit to the Reserve Bank.
“The liabilities of VBS exceeded its assets by approximately R180 million and it was hopelessly insolvent as at 31 March 2017. By the time VBS was placed under curatorship in March 2018, the financial position was far worse,” Naidoo said.
He insisted that the principal beneficiary of the looting of VBS was its majority shareholder Vele Investments.
Naidoo said there was a fraudulent manipulation of VBS’ financial records and deliberate action was taken by executives of VBS “to cover up the massive cash hole in the bank”.
He said the manipulation of VBS’ operating system known EMID was done with ease by the protagonists of the extensive frauds thereby resulting in VBS’ largest asset not being recorded in the operating system.