MAHIKENG - The Mahikeng local municipality in the North West did nothing wrong to invest over R80 million the troubled VBS Mutual Bank, municipal manager Thabo Mokwena said on Wednesday.

"I must put this under clear perspective, we invested money we started with R10 million with VBS, when we had cash flow problems the CFO [chief executive officer] wrote a letter [to VBS], that out of our R10 million we need at least R6 million, they immediately returned our money..." he said.

Mokwena initially told reporters in Mahikeng that the municipality only invested R25 million and it was incorrect that the municipality invested R85 million.

"It is false it is misplaced, it is fabricated --  a person needs to be charged for saying that."

Mahikeng municipal manager Thabo Mokwena say the municipality did not contravene any law to invest in the VBS Mutual Bank. MEDIA: Molaole Montsho/ANA

He turned around stating that the total money invested was R85 million. The municipality used R25 million from its coffers and R60 million was the money National Treasury paid to the municipality by a mistake.

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

Mokwena maintained all processes were followed before the municipality invested money in VBS.

He said the municipality started to invest with VBS in 2007 after the bank offered them a better return.

On Tuesday, Mokwena through his lawyer stopped the council from tabling an item in the council meeting relating to the VBS investment.

Head of legal in the municipality Benjamin Pelele said it was premature to table the item as investigations on municipalities that had invested with VBS were not yet completed. 

African National Congress (ANC) North West provincial chairperson Supra Mahumapelo on Sunday, called for drastic actions to be taken against municipalities that had invested money in the VBS Mutual Bank.

"There must be drastic action taken in line with policy against any municipality that had invested taxpayers money without adhering to policy prescripts and law..." 

African News Agency (ANA)