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“The consultant told me that money was being withdrawn and that there was another person signing on my behalf with Ncube,” said Mangwane.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