Municipalities that invested with VBS bank suffered big blow - Busisiwe Mkhwebane
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Pretoria - Service delivery in the 14 municipalities that invested in the now collapsed VBS Mutual Bank has suffered a big blow because of “improper conduct and maladministration”.
This is according to Public Protector Busisiwe Mkhwebane, who briefed the media virtually on Wednesday where she released reports on numerous investigations by her office.
Among them was a scathing report on allegations of improper conduct and maladministration by the 14 municipalities in Limpopo, North West and Gauteng.
The report found that the municipalities in the three provinces invested about R1.6 billion with VBS, resulting in substantial losses after bank executives, politicians and municipal officials looted over R2.3bn of mostly poor people who had deposited their savings.
She said the “own-initiative” investigation came after information came to her attention from the media relating to the municipalities illegally investing public funds with the
The media reports followed the publication of a forensic report commissioned by the Prudential Authority in connection with the alleged improprieties and unlawful conduct at VBS.
The municipalities in question were Makhado, Vhembe, Collins Chabane, Elias Motsoaledi, Greater Giyani, Ephraim Mogale, Tubatse Fetakgomo and Lepelle-Nkumpi, all in Limpopo.
Also included were Madibeng, Mahikeng, Moretele, and Dr Ruth Segomotsi Mompati in the North West as well as Merafong City and West Rand in Gauteng.
The report, seen by Pretoria News, states that the investigation confirmed that the implicated municipalities did in fact irregularly invest public funds with VBS, in violation of the provisions of the Municipal Finance Management Act.
Makhado Local Municipality irregularly invested R155 million from 2016 to 2017 with VBS. The investment resulted in the loss of more than R60m.
Vhembe District Municipality irregularly invested R1 070 000 000 from 2015 to 2017. The investment resulted in the loss of more than R300m of public funds. Collins Chabane Local Municipality irregularly invested R120m on October 23, 2017. The investment resulted in the loss of more than R120m.
Greater Giyani Local Municipality irregularly invested R153 254 435.42 in 2017 which resulted in the loss of R153 254 435.42.
Mkhwebane recommended remedial action, including training of officials.