‘VBS refused to take me seriously’

Troubled VBS Mutual Bank is caught in a R6-million fraud case in which a former client claims it ignored red flags of fraud and misrepresentation raised on her joint venture business loan account.

According to Mikateko Mangwane, a businessperson contracted by the Passenger Rail of South Africa (Prasa) for its Women in Rail project in 2015, VBS refused to investigate alleged fraudulent transactions, of which she was liable for 50%.

Last month VBS was put under curatorship after the South African Reserve Bank found the bank was experiencing liquidity problems. The curator, Anoosh Rooplal, found that R900-million of VBS’s reported deposits of R2.9-billion couldn’t be confirmed.

Mangwane said she was forced to open a case of fraud and corruption at the Alberton police station in 2017 against her former joint venture partner, Xoliso Ncube, who she alleges removed her as a signatory on their VBS account.

She alleges that Ncube replaced her as signatory with that of his mother, Patricia Mogale, who was also part of the joint venture as a director in his company.

Alberton police spokesman Captain Manare Ramotshela said the docket has been handed over to the senior prosecutor at the Palm Ridge regional court.

Mangwane said her troubles with VBS and Ncube began in March 2015 after they had applied for a R6-million revolving loan to fund the Prasa project, worth R8-million, to refurbish railways in Atteridgeville, Tshwane.

Mangwane has a board resolution, dated January 26 2015, regarding the joint venture between her company, Ugqiko Enterprise, and Ncube’s Refemo Maintenance Services, which states that she and Ncube were “duly authorised to sign all documents” in connection with the project.

Mangwane said: “I got a call in March from a [VBS] consultant who asked me if I was aware that our application for the loan had been approved and that R2-million was already available of the R6-million. But Ncube [had] said that there was no approval.

“The consultant told me that money was being withdrawn and that there was another person signing on my behalf with Ncube,” said Mangwane.

A furious Ncube did not answer Mail & Guardian questions, despite promising that his lawyers would be in touch with the newspaper.

VBS bank statements, which Mangwane has sourced, reveal that just over R3.5-million had been used between March 2015 and July 2015 on projects that were not related to the Prasa contract.

READ MORE: VBS’s billion-rand troubles laid bare

“He [Ncube] was taking money for himself and I was not getting bank statements. I raised these issues with VBS and they ignored me and would make me wait for hours at their offices without attending to my complaints,” said Mangwane.

She said she had questioned how Ncube was allowed to sign without her consent but was told by VBS executives that she had consented to this.

Mangwane later discovered a VBS company signing authority form with Ncube and Mogale’s signatures on it, giving them authority to sign on the account.

The document was later used by VBS’s executives to defend their decision not to conduct an investigation.

But Mangwane alleges there was no bank stamp to prove that the document was legitimate, and said she, as the main partner in the joint venture, had not been asked for consent.

Instead, VBS used a document from a suretyship agreement of the joint venture on handwritten pages to “legitimise” the company signing authority without her consent, she alleged.

“This was a clear case of fraud and misrepresentation but VBS executives were so arrogant about it; they were not willing to do anything. Every time I complained about Ncube they would freeze the account and then reopen it for his transactions. This was maladministration, because I was still liable for the debt,” said Mangwane.

A complaint was lodged with the ombudsman for banking services and the adjudicator, Lucia Baloyi, found that there was “no maladministration” by VBS. Baloyi said in her conclusions that the bank had acted on a written mandate by the joint venture.

Mangwane said she couldn’t afford lawyers to pursue the case with civil litigation.

In her objection to the ombudsman, Mangwane raised her unhappiness that the adjudicator had accepted a handwritten “fraudulent document” as proof that VBS was not in the wrong.

“I can’t ignore the fact that … the sole signature of Xoliso Ncube and/or Patricia Mogale was used by the bank as a legitimate document, as a result [of which] my company suffered a huge financial loss,” Mangwane told the adjudicator.

Ombudsman’s investigations manager Nerosha Maseti said the matter has not been finalised. “It is important to note that, subsequent to the original assessment report, additional information was provided and we again engaged the bank,” said Maseti. The curator’s spokesperson, Louise Brugman, merely said that the office would “continue to engage with the ombudsman”. 

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Thanduxolo Jika
Thanduxolo Jika

Thanduxolo Jika is an investigative Journalist and Co-Author of We are going to kill each other today:The Marikana Story. The Messiah of Abantu.

Related stories

Editorial: The ANC lacks consequence management

President Cyril Ramaphosa’s Nasrec promises about accountability need to be effected by the ANC, but the party seems incapable of self-policing

The case against Floyd Shivambu

The flow of money from VBS Bank would seem to suggest that the EFF’s second-in-command was an ultimate beneficiary of proceeds of a crime

Workers’ R60m ‘lost’ in banks scam

An asset manager, VBS Mutual Bank and a Namibian bank have put the retirement funds of 26 000 municipal workers in South Africa at risk

VBS and Steinhoff investigations at “advanced stage” — NPA and SIU

Crime-fighting bodies update MPs on why high-profile investigations into VBS Mutual Bank and Steinhoff have not yielded results

Shivambu hit with VBS legal bill

Brian paid back the money before liquidator could attain records to company dealings. He incurred costs, however

VBS bounty buys Floyd a Rover

The EFF leader admits he bought the vehicle but denies there was a link to the now defunct bank

Subscribers only

Covid-19 surges in the Eastern Cape

With people queuing for services, no water, lax enforcement of mask rules and plenty of partying, the virus is flourishing once again, and a quarter of the growth is in the Eastern Cape

Ace prepares ANC branches for battle

ANC secretary general Ace Magashule is ignoring party policy on corruption-charged officials and taking his battle to branch level, where his ‘slate capture’ strategy is expected to leave Ramaphosa on the ropes

More top stories

Journey through anxious Joburg

A new book has collected writing about the condition of living, yes, with a high crime rate, but also other, more pervasive existential urban stresses particular to the Global South

Football legend Maradona dies

The Argentinian icon died at his home on Wednesday, two weeks after having surgery on a blood clot in his brain

Why no vaccine at all is better than a botched...

As Covid vaccines near the manufacturing stage, a look at two polio vaccines provides valuable historical insights

Under cover of Covid, Uganda targets LGBTQ+ shelter

Pandemic rules were used to justify a violent raid on a homeless shelter in Uganda, but a group of victims is pursuing a criminal case against the perpetrators

press releases

Loading latest Press Releases…