Picture: Ragout from VBS website homepage
Picture: Ragout from VBS website homepage

North West municipalities to appear before Scopa over VBS Bank scandal

By Molaole Montsho Time of article published Aug 14, 2018

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Rustenburg - Four North West municipalities which invested in the VBS Mutual Bank were expected to appear before the Provincial Public Accounts Committee (Scopa) on Wednesday to account.

The Moretele Madibeng and Mahikeng local municipalities as well as Dr. Ruth Segomotsi Mompati District Municipality were expected to brief the committee on the investments they made with the VBS Bank.

In July, the Mahikeng local municipality said it had done nothing wrong to invest over R80 million with the troubled VBS Mutual Bank.

Municipal manger Thabo Mokwena said all processes were followed before the municipality invested money in VBS.

He said the municipality invested with VBS after the bank offered them a better return.

The Reserve Bank placed the bank under curatorship in March as it was facing a severe liquidity crisis and could not repay deposits as and when required.

Since VBS has been placed under curatorship, the municipalities that invested with the bank have not been able to access their funds. This money was intended for, among other things, service delivery.

Mokwena said Mahikeng used R25 million from its coffers and the other R60 million was the money national treasury paid to the municipality by a mistake. Treasury was supposed to pay Mahikeng only R60 million but R120 million was paid the the municipality.

The municipality did not return the money to treasury because treasury only made one telephone call and did not follow up with a letter, he said, adding that the municipality did not know in which bank account they should use to pay back the money to treasury as they were not provided with a bank account, Mokwena said.

African National Congress North West provincial chairperson Supra Mahumapelo had called for drastic actions to be taken against municipalities that had invested money in the VBS Mutual Bank without following legal processes.

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African News Agency (ANA)

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