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SOE won’t pay VBS liquidators

The hunt for the VBS missing billions has continued in the South Gauteng High Court, Johannesburg.

The hunt for the VBS missing billions has continued in the South Gauteng High Court, Johannesburg.

Published May 16, 2022

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The hunt for the VBS missing billions has continued in the South Gauteng High Court, Johannesburg, where a state-owned entity (SOE) showed up to explain its refusal to pay even a cent to the defunct bank’s liquidators.

VBS liquidator Anoosh Rooplal turned to the court to argue that the Universal Service and Access Agency of South Africa (Usaasa) owed the bank’s estate more than R102 million.

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Judge Avrille Maier-Frawley presided over the matter on Friday. The money Rooplal sought to claw back from Usaasa was used to fund the supply of digital terrestrial set-top boxes.

A private company called Leratadima Marketing Solutions, which is currently being liquidated, supplied the set-top boxes to Usaasa.

Rooplal said in court papers that VBS, which lost more than R2 billion belonging to municipalities and hundreds of Limpopo villagers, provided funding for the set-top boxes project.

He now sued the state-owned entity because “as security funding, VBS contracted with Usaasa that all payments by it to Leratadima would be made into Leratadima’s VBS account”.

Advocate Micheal Antonie, who argued Rooplal’s case, told Judge Maier-Frawley the contract was clear that all payments by Usaasa would be made by electronic transfer to revolving facility account held by VBS.

He added that VBS’s position was clearly that “we will give you the money, but it has to be paid into an account in our bank which we will control”.

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Further, it was said that, “you cannot go to any other bank. As long as there are funds outstanding, you cannot change this bank account”, Antonie submitted.

Antonie stressed that Usaasa undertook to pay the money into the VBS bank account. “Finally, Usaasa was obliged to pay those funds – any funds owed to Leratadima – into this account,” he said.

“One cannot view the payment undertaking in isolation. It must be viewed in the context of everything else that was happening around it.

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“These documents must be given a sensible and business-like meaning that does not undermine the purpose of the documents in light of the relevant circumstances.”

Advocate Chris Erasmus SC, for Usaasa, told the court Rooplal had no case whatsoever against the state-owned entity because it paid up.

“Usaasa paid Leratadima in full for all 491 000 set-top boxes (it received from Leratadima). Usaasa paid an amount of R321 677 000,” Erasmus said.

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He said approximately R175m of this money was paid into the VBS bank account of Leratadima.

In what appeared to be a concession that not all amounts were paid into VBS accounts, Erasmus said a further R102m was paid into the Absa bank account of Leratadima and then just over R100m was paid by Usaasa to the liquidators of Leratadima.

Turning his attention to the Absa account, he said: “That was the bank account nominated and agreed upon between Leratadima and Usaasa for the payment of the invoices.”

Usaasa had no obligation to pay the VBS estate, Erasmus said. “We respectfully submit that this is not a case of a respondent intent on combobulating the matter.

“In fact, it’s an organ of state who says, ‘I have paid (and) I have discharged my obligations. I need not pay again’.”

Erasmus said the court was effectively being asked to order an organ of state to “again pay R102m, which would then be a fruitless and wasteful expenditure in terms of the PFMA” .

“We respectfully submit that your Lordship should simply dismiss the application.”

Judge Maier-Frawley reserved judgment.

@BonganiNkosi87

Related Topics:

VBS Scandal

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