/ 20 July 2018

VBS chair’s family trust implicated in bank’s looting

Former VBS Mutual Bank chairperson Tshifhiwa Matodzi
Former VBS Mutual Bank chairperson Tshifhiwa Matodzi

The family trust of former VBS Mutual Bank chairperson Tshifhiwa Matodzi was allegedly paid nearly R5-million from Vele Investments’ heist of money from VBS Mutual Bank.

This has emerged from the ongoing investigation by VBS curator Anoosh Rooplal into the bank’s collapse and are contained in civil claims made against VBS shareholder Vele Investments and former bank officials.

In his court action, Rooplal claims that Matodzi, who was both VBS and Vele chairperson, was the “main architect of the fraudulent scheme”.

The records of the Shimba La Ndou Family Trust, one of the many entities that received questionable payments, are attached to the court application and reveal that, on December 15 2016, a withdrawal of R4-million was made followed by another withdrawal of R712 166. On December 11 the following year, an amount of R283 799 was also withdrawn.

The trust’s account was also used to make payments to other entities and individuals linked to Matodzi. Among the payments in the records are ones for farm workers, a bond for a farm, plumbers and electricians.

Over the past few weeks reports have emerged of how VBS was looted by its directors to fund their lavish lifestyles.

READ MORE: Liquidity problems were just the start

Matodzi, who resigned in March when VBS was placed under curatorship, refused to comment. “I am not taking any questions from the media right now,” he said.

That Matodzi was also chairperson of Vele Investments formed part of the wide-scale fraud at VBS, Rooplal says. The bank’s records, also attached to the court papers, have revealed how companies were used to siphon off R1.5-billion invested by municipalities, the Public Investment Corporation (PIC) and other entities.

Vele’s bank records reveal that ANC Youth League treasurer general Reggie Nkabinde also seems to have scored. His company, Mabala Noise, received R124 000 from Vele Investments on May 29 last year.

Last week the Mail & Guardian revealed how a shelf company, Robvet, which was allegedly used as a conduit by VBS top brass, had made a R250 000 payment for a table at the ANC’s 106th birthday celebrations in East London. The ANC said that the amount had been paid through the Progressive Business Forum but the ANC had not been aware that the money was from a questionable source.

READ MORE: Further PIC bloodletting in wake of VBS looting

It is unclear from the bank statements why Nkabinde’s Mabala Noise was paid the money.

Nkabinde is one of the youth league leaders hoping to replace incumbent president Collen Maine when it goes to conference later this year.

Mabala Noise is not new to controversy. In 2016, Economic Freedom Fighters (EFF) leader Julius Malema accused Nkabinde of using the company as a front to launder money received from the department of water and sanitation. The party opened a case of money laundering at the Douglasdale police station in Fourways.

Nkabinde dismissed Malema’s claims.

Nkabinde, who refers to himself as “the governor”, did not respond to calls, text messages and emails from the M&G requesting comment and clarity on the payment.

VBS was placed under curatorship after the South African Reserve Bank became aware of liquidity problems at the mutual bank. Since then, two PIC executives who represented the state entity at the bank have also lost their jobs. Last week, one of the executives, Ernest Nesane, resigned just hours after it was revealed that his colleague, Paul Magula, with whom he served at VBS on behalf of the PIC, had been paid by Vele Investments.

According to the PIC, the two were entrusted with ensuring that the bank applied the “highest standards of ethics and good corporate 
governance” on behalf of the investor.

Magula, a former executive head of the PIC’s risk and compliance who was fired in April this year for poor performance, appeared in the bank records of Vele Investments as one of the recipients of questionable payments from the company.

Both Magula and Nesane are said to have received loans from VBS.