R61m sequestration order granted against VBS fixer

VBS bank. File Photo: IOL

VBS bank. File Photo: IOL

Published Nov 6, 2022


FORMER ANC Youth League leader accused of being the middleman in the looting of the now defunct VBS Mutual Bank has to pay Sars R61.5 million for tax.

This comes after businessman Kabelo Matsepe challenged a final sequestration order by the North Gauteng High Court that was granted in April after the SA Revenue Service (Sars) established that he was factually insolvent.

Judge Mandla Mbongwe granted Sars the order it sought but did not provide reasons then and Matsepe applied to the court to provide the written reasons for its ruling. Matsepe’s individual income tax and VAT (value-added tax) assessments issued between 2015 and 2018 were over R61.5m and Sars issued summons to recover the amount.

Sars also established that Matsepe was incapable of paying its debt and that he was factually insolvent. According to the revenue service, Matsepe listed four immovable and movable assets, which included a house on which he had an R5.4m mortgage bond with VBS Mutual Bank.

The property was registered in November 2017 and is valued at R4m.

Matsepe had three vehicles registered in his name which were bought between September, October and November 2017. Two of the vehicles were valued at R115 000 while another was R880 000. Sars put the value of Matsepe’s assets at R5.11m while his liabilities amounted to almost R67m including the R5.4m VBS bond and R61.5m he owed the taxman and for which the revenue service had an August 2020 default judgment.

In his written judgment dated, October 27, Judge Mbongwe said he was concerned by Matsepe’s claims in court that his company Moshate Investments, and not him, was appointed by VBS as a service provider to render marketing and capital raising services for the bank for a commission.

“I have not in my personal capacity rendered any of the said services … Accordingly, there is no rationale which justifies the applicant (Sars) to decide to issue assessments against me relating to transactions between VBS and Moshate,” he wrote in his affidavit.

But Judge Mbongwe was not convinced, saying: ”The respondent’s (Matsepe’s) assertions display oblivion of the duties and obligations the company laws impose on him as the director of the company. To perceive his company and its status as a conduit to make money and a shield against a statutory demand for payment of tax is baffling, to say the least.“

Matsepe also claimed that the services that Moshate provided to VBS, which were marketing and raising capital, were exempt from VAT.

But the judge stated that Matsepe did not object to the VAT assessments and the financial services exempted from VAT are listed in the Value-Added Tax Act and marketing and raising capital are not on the list.

Seven accused, Robert Madzonga , Kabelo Matsepe , Daniel Msiza , Ralliom Razwinane , Takunda Mucheke and Tshianeo Madadzhe they are facing 188 fraud, theft , money laundering and racketeering charges for the alleged looting of the VBS Bank. Picture: Nokuthula Mbatha\African News Agency (ANA)

Matsepe, who was found by Advocate Terry Motau SC in his 2018 report titled The Great Bank Heist to have received R35m from the looting of the financial institution, was arrested in March last year with former ANC Limpopo provincial treasurer Danny Msiza and was released on R100 000 bail by the Johannesburg Commercial Crimes Court sitting at the Palm Ridge Magistrate’s Court.

They face charges of theft, fraud, money laundering, corruption, racketeering and contravening the Prevention of Organised Crime Act and the Prevention and Combating of Corrupt Activities Act.

Attempts to contact Matsepe and his lawyer Joseph Maluleke were unsuccessful.