Five years down the line, VBS victims continue to count their losses

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Published Jan 3, 2024


Burial societies; stokvels; individuals, particularly the elderly; and municipalities continue to count their losses five years after the brazen looting of nearly R2.3 billion of the hard-earned money they had invested in VBS Mutual Bank.

The scandal, which could arguably be branded “The Great Bank Heist”, was exposed in 2018 by advocate Terry Motau, who was appointed to investigate it. He penned a report afterwards that blew the lid off the scandal.

The bank, meant to benefit black people who were looking to borrow money to buy houses, was started in 1982 by the Venda homeland government. Its sole mandate was to help deserving residents of Venda buy houses.

However, the bank was not widely known except for a few who took advantage of it.

That all changed in 2016, when the bank loaned R7 million to former president Jacob Zuma after the controversy around his Nkandla homestead’s multimillion-rand refurbishments.

In 2017, the bank started making headlines after some of the bank’s clients approached the media to say that the money they had invested in the banks was unavailable.

It was a downward spiral from there as more as more VBS clients discovered, to their shock, that their money had been stolen.

Municipalities in Limpopo, North West and Gauteng had irregularly invested a combined amount of more than R1.6 billion. The money had presumably vanished into thin air.

More than 50 people were implicated in the scandal. Some of the ruling ANC heavyweights were arrested, among them the then-Limpopo ANC treasurer, Danny Msiza. He has been facing a court case and was forced to step aside from the ruling party’s activities, disqualifying him from contesting in his party’s elections.

Msiza and scores of others are facing more than 100 charges for their alleged roles in the heist. They include the former VBS chairperson Calvin Tshifhiwa Matodzi, bank executives, politicians, municipal officials and managers.

Some of the eight people charged in connection with the looting of VBS Mutual Bank, during their appearance in Palm Ridge Regional Court in Alberto, Johannesburg. Picture: Reuters

In the 206-page indictment, the National Prosecuting Authority alleged that Msiza was the central figure between VBS and the municipalities that had illegally invested money, in contravention of the Municipal Finance Management Act.

Msiza, Matodzi, former ANCYL Limpopo leader Kabelo Matsepe, Rallion Razinnane, Takunda Edgar Michele, Tshianeo Madadze, Andile Malusi, Ramavhunga Mulimisi, Solomon Maphosa, Simpho Malabar, Phalaphala Ramikosi, Thifhelimbilu Nesane, Paul Manila and Robert Madzonga are out on bail of between R50 000 and R100 000 each, after being charged with the 180 counts, among them racketeering and corruption.

The court case is expected to continue in 2024.

Charlotte Ngobeni, a former senior official of the Collins Chabane Municipality, in Limpopo, has been charged separately. She allegedly accepted kickbacks for signing off on R120 million of municipal funds to be invested in VBS.

Mushoni Tshifhango, from Limpopo’s Thulamela Municipality, was fired by the ANC in June, for his role in the VBS saga.

Former VBS chief financial officer Philip Truter, is expected to be a star witness when the trial starts, after he took a plea bargain in exchange for information in 2020. He was sentenced to seven years in jail.

The South African Reserve Bank placed VBS under curatorship and a forensic investigation was instituted to establish exactly what had gone wrong wrong.

Susan Mudau, 41, of Thohoyandou had initially told Independent media that her life had been turned upside down since she recommended that her burial society invest R160 000 in VBS five years ago.

Mudau, who comes from Sibasa near Thohoyandou in Limpopo, said she had persuaded her joint burial society, consisting of vegetable traders plying their trade at a market in Sibasa, to invest their savings in VBS because she had learnt that it was a lucrative investment. The society had invested R160 000,

She said her ordeal started when they had their first death in March 2018, and three signatory members had gone to withdraw R8 000 from the bank. A senior bank official had told them that the money was not available because the bank did not have any money.

She said: “The rest of the members blame me for this. They say I knew when I convinced them that it would happen. Some of them have not spoken to me ever since, and I had to quit my trading stall to go to the bank to attempt to get the money back for the past three years.”

They were able to prove that they had invested in the VBS bank and were granted R100 000 by Nedbank.

She told Independent Media that despite getting some of the money back, she had been unable to convince the society to re-admit her as a member. She had been surviving by selling fruit in her neighbourhood to put food on the table for her and her four children.

In March 2018, then-minister of finance Nhlanhla Nene placed VBS under curatorship. That meant that management and the board were relieved of their powers and a curator took over the bank’s affairs.

Through the curatorship, the SA Reserve Bank was given the legal means to create the necessary mechanisms to implement a resolution plan to stabilise and restore a bank.

Pretoria News