R15m bonus to VBS chief executive questioned
The court battle to sequestrate executives accused of looting VBS Mutual Bank is under way, with a R15million bonus to its chief executive Andile Ramavhunga coming under scrutiny.
Michael Antonie, senior counsel for curator Anoosh Rooplal, wanted the South Gauteng High Court to rule that the payment was one of fraudulent transactions from coffers of the collapsed bank.
In his affidavit, Rooplal said the instruction to pay out this R15m to Ramavhunga was made to an employee on the same day that a “fictitiously generated deposit” of R350m was created in the bank account of Vele Investments, VBS’s main shareholder.
But Ramavhunga denied that the payment to him was fraudulent. He submitted under oath that it was a legitimate fee due to him for helping Vele acquire Mvunonala Holdings for R300m.
Ramavhunga said he was entitled to R6m for introducing Robert Madzonga, Vele’s chief executive, to Bongani Mhlanga, and a further R9m once the deal went through.
Ramavhunga was one of five VBS executives who Rooplal - who was appointed curator by Reserve Bank governor Lesetja Kganyago - wanted sequestrated for orchestrating a “fraudulent scheme of epic proportions” at VBS, and allegedly made off with R1.5billion after allegedly raiding depositors’ money.
Provisional sequestration orders were granted against Tshifiwa Matodzi, Philip Truter and Phophi Mukhodobwane yesterday.
During argument before Judge Moroa Tsoka, Antonie said it was simply not probable for Ramavhunga to be paid so much money for just facilitating the deal.
“It’s commercially irra- tional,” Antonie said. “On his version, all he had to do was introduce Mhlanga to Matodzi and he’s entitled to R6m?
“That's just nonsense. It’s bizarre to the extreme,” said Antonie, adding it was clear that the payment was not out of a genuine banker- client relationship.
“Ramavhunga as chief executive of the bank is dealing with its biggest shareholder, ostensibly in the form of Vele Investments, and he’s also dealing with his biggest client in the form of Vele,” Antonie told the court.
“Now, he would have us believe that it is commercially rational that the chief executive of a bank would say to its biggest shareholder and its biggest client, ‘I want to make money out of this transaction in my personal capacity’.
"'You are going to have to pay me 5% of R300m, if you want me to introduce you to Mhlanga’.
“It’s absurd. If this was a genuine banker-client relationship, no CEO would ever do that,” Antonie said.
“On multiple levels, this explanation of Ramavhunga is simply not sustainable, and your lordship can rightly reject it at this stage.”
But Adrian Kruger, senior counsel for Ramavhunga, insisted to the court the R15m paid to his client was above board.
He added that, contrary to what the court believed, Ramavhunga was not involved in Vele.
“My client was not a director at Vele at the time. He has never been a director of Vele. He was director and chief executive of the bank.
“There was no prejudice to the bank through this transaction,” said Kruger, who also told court that the agreement to pay Ramavhunga was concluded verbally.
But this submission shocked the judge. “An oral agreement dealing with so much money? And this is a chartered accountant, the chief executive of a bank?” Judge Tsoka asked.
The SA Institute of Chartered Accountants announced last week that it was investigating Ramavhunga’s conduct.
Arguments for his sequestration have been concluded.@BonganiNkosi87