The Economic Freedom Fighters’ top six leaders are concerned about rumblings in the ranks of its central command team regarding the party’s leaders, Julius Malema (C) and Floyd Shivambu (L) and their association with the looted VBS Mutual Bank. (Bloomberg via Getty Images)
The Economic Freedom Fighters top six leaders will hold an emergency meeting this week to discuss the fallout from VBS Bank kingpin Tshifhiwa Matodzi’s damning affidavit, which implicates EFF leader Julius Malema and his deputy, Floyd Shivambu, in receiving bribes totalling R16 million.
The meeting will discuss how to restore unity in the EFF’s highest decision-making body, the central command team (CCT), where tensions have risen over the party’s strategy to control the fallout over Matodzi’s disclosures regarding the VBS Mutual Bank heist. The EFF has used its former national chair and legal adviser, Dali Mpofu, to control the narrative on the matter.
Malema has allegedly told the CCT not to respond to the allegations in Matodzi’s affidavit, adding that the EFF would only admit to receiving “donations” from Matodzi through Mpofu, one source said.
“As the party’s legal adviser, the former chair Dali Mpofu has been mandated to concede to receiving the donations from the bank, but what we are not conceding to is receiving money we knew would bankrupt the bank and that is why the former chair sang in that interview. Legally, we have not done any wrong, we just accepted a donation,” the source said.
On Sunday, in an interview with Newzroom Afrika, Mpofu said the party “never denied” receiving donations from VBS, saying the money was “a loan”. He added that the party received “a donation” from the bank because “there is no political party that doesn’t receive donations”.
This is despite the party’s treasurer general, Omphile Maotwe — and Mpofu — previously rejecting claims that the EFF received money from VBS. She previously said its “only source of funding” was the R10 membership fee paid upon joining the organisation, as well as cows donated to the party to host its events, revenue from SMS campaigns and the 9% deducted from the MPs’ salaries.
“Our members make donations all the time … but we have not found such a donation [from VBS] in this case. If it was there, we wouldn’t hide it because it happens all the time.”
Throughout the unfolding of the VBS saga, Malema and Shivambu have consistently maintained their innocence, with Malema calling on the National Prosecuting Authority (NPA) in October 2022 to charge the party if there was evidence of guilt.
“There is nothing that implicates us. Why are we not being charged if these [allegations] are legitimate? Why would a company implicated in a report of corruption and fraud not be charged?” Malema said at the time.
Another source close to the party’s top six said there was fear that the VBS scandal could tear the party apart because the CCT members were “conflicted” about what had happened at the bank.
“The main concern is that should the NPA break commissar Shivambu, it will lead to the demise of the EFF, because he was recently found guilty by parliament for not disclosing R180 000 in “clean” money from his brother to buy a high-end Range Rover Sport in 2018. That is the main concern; this means that he will drag the CIC [commander-in-chief Malema] and the secretary general down with him,” the source said.
Last year, parliament’s ethics committee found that Shivambu failed to disclose a R180 000 transfer to his account in August 2017.
In 2019, his brother Brian Shivambu, known as a beneficiary of VBS Mutual Bank, was instructed by the Johannesburg high court to repay R1.78 million to the bank’s liquidators.
The court order followed an application by Anoosh Rooplal, the liquidator, seeking to recover R2.7 million from a R4 million loan granted to Sgameka Projects, registered under the name of Brian Shivambu, in late 2017.
According to Rooplal’s court filings, Brian Shivambu had defaulted on servicing the loan, accumulating arrears exceeding R2.7 million. Since the commencement of the court proceedings, about R1 million had been repaid.
Malema was not found guilty by parliament’s ethics committee.
One CCT member said: “Morally speaking, what happened at the bank was very wrong. If the party leaders are found to be at fault, it could mean the demise of the party. The CCT is loyal to the party, but we acknowledge there are suspicions surrounding VBS. Now, it’s about aligning yourself with the right leadership and ensuring survival.”
A senior member of the EFF said the VBS allegations was one of the reasons for Shivambu being rejected by KwaZulu-Natal party members early this year and would continue to affect his chances of coming back as a member of the top six.
The EFF is preparing for its third national elective conference, which is scheduled for December.
“It is clear that the outcome of the VBS scandal will blow negatively for Shivambu, who is seen to be the weakest link in this matter. It is expected that [secretary general Marshall] Dlamini will rise and contest the position,” the member said.
“If the NPA does not succeed in prosecuting him [Shivambu], he will still have more than his reputation to lose. The VBS will sink him, because more evidence links him more than the other two leaders,” he said.
EFF spokesperson Leigh-Ann Mathys said there is no change to the EFF’s stance of innocence, adding that those who had questions must refer to the “endless archives” for answers and pay attention to “those actually pinned in the VBS scandal”.
The ANC’s acting national spokesperson, Zuko Godlimpi, said if the NPA or the courts decide to subpoena the party based on the affidavit deposed by Matodzi, the ANC will oblige.
He added that if the NPA also decided to charge ANC members whom Matodzi mentioned in his affidavit, the step-aside rule would apply to the individuals arrested.
Godlimpi said the ANC’s step-aside rule was “clear” that whoever is charged in a matter must step aside, but that the party could not act on the basis of a leaked affidavit.
“There’s nothing that says the NPA is going to charge anybody. The NPA will decide what it makes of the veracity of the claims that are made in the affidavit,” he said.
“An individual deposes an affidavit to the police; that’s not evidence. It’s a discussion that the person is having with the NPA. Once the NPA satisfies itself with the claims being made, it will take a course of action that will then inform what the ANC can or cannot do.”
Godlimpi said if the party is called upon by any law enforcement agency to provide any evidence, the ANC is “always willing to do so.”
The step-aside rule has been viewed by some in the organisation as selective, claiming it has been used to target only those who are viewed to be in the “radical economic transformation” faction or who are viewed as sympathisers of former president Jacob Zuma.
Several arrests related to the VBS scandal have been made, including Limpopo ANC heavyweight and business person Danny Msiza.
Zuma allies in the ANC affected by the rule include Msiza, former secretary general Ace Magashule, eThekwini regional chair Zandile Gumede and Mpumalanga treasurer Mandla Msibi.
Despite being charged with corruption, which meant the step-aside rule would immediately be applied by the party, former minister Zizi Kodwa still retained his position in parliament, with some saying this was because he is an ally of President Cyril Ramaphosa.
Godlimpi said the ANC sympathised fully with the victims of the looting of VBS.
“It is unfortunate that what was an exemplary institution of rural people putting together their funds was abused as it was by people,” he said.
“The ANC still insists on the same point that they must be brought to book, the monies must be recovered and the rural poor must be compensated as much as possible.”
The ANC has previously called for any members in its ranks who were involved in the VBS scandal to face the full might of the law.
NPA spokesperson Lumka Mahanjana said the pre-trial hearing of the remaining VBS accused would begin on 22 July, with the state looking to finalise the matter.
The NPA secured as state witnesses Matodzi and the VBS bank’s erstwhile chief financial officer, Phillip Truter, who was released in April after serving nearly four years of his seven-year sentence after he pleaded guilty in October 2020.
The other accused are the bank’s former chief executive Andile Ramavhunga; former VBS treasurer Phophi Mukhodobwane; former KPMG employee Sipho Malaba; former financial officer of the South African Police Service and VBS non-executive director Lieutenant General Avhashoni Ramikosi; as well as Ernest Nesane and Paul Magula, who represent the Public Investment Corporation as non-executive directors on the board.
Liquidators are also gunning for KPMG in a Johannesburg high court lawsuit of more than R863 million, which liquidators said was owed to the bank because the firm signed off a March 2017 financial statement that ratified “a fraudulent scheme being perpetrated upon [VBS] between 17 July 2017 and 10 March 2018”.