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17 Aug 2018 00:00
This latest revelation follows earlier reports that the CSOS board had invested R8‑millionin VBS, also in January,without the required sign-off from its own board, the minister and national treasury.
An agency of the department of human settlements thought it had invested R20-million with Absa. But when it went looking for the investment, it was nowhere to be found.
Pandemonium reigned at the board of the Community Schemes Ombud Service (CSOS).
What would these officials tell the minister?
After frantic scrambling, a firm linked to the illicit commissions paid out by beleaguered VBS Mutual Bank has emerged as a middleman in yet another multimillion-rand investment carried out by a government agency (the CSOS) without the knowledge of its board or shareholder, the ministry of human settlements.
CSOS chief financial officer Themba Mabuya allegedly told a stunned board audit subcommittee this week that a sum of R20‑million, which the board had thought was invested directly in Absa bank, was invested by a third party —Gundo Wealth Solutions (GWS) —on behalf of the organisation.
“Imagine how shocked everyone was when they found out we did not even have an investment account with Absa. This means we misled the minister,” said aboard member. “How difficult is it to invest money in a bank, that we need to do it via a third party?”
GWS chief executive officer (CEO) Ralliom Razwinane said on Thursday that his company did not earn any fees from the R20‑million it invested with Absa on behalf of CSOS.
“We didn’t charge them for the Absa investment ... Our model is to build portfolios so we can build better margins on our rates. It is standard practice;you don’t necessarily have to charge clients all the time,” he said.
This latest revelation follows earlier reports that the CSOS board had invested R8‑millionin VBS, also in January, without the required sign-off from its own board, the minister and national treasury.
Last month, City Press reported that VBS curator Anoosh Rooplal said the bank had used a company called Robvet to pay bribes and commissions to individuals as a reward for large deposits, most of which came from impoverished municipalities. This appears to have been a foil for mass-scale looting by some of the bank’s executives.
GWS also received R2.3‑million from Robvet and R1.5‑million from major VBS shareholder Vele Investments between October 2017 and January 2018. Razwinane said the payments were fees for services rendered to the bank, adding that he did not know from which account they were made.
CSOS’s Mabuya confirmed the payment to the middleman: “Gundo was approved by the CEO, but you must allow us to present to the board and the minister first, then I can tell you if the investment was aboveboard.”
Last week, the Mail &Guardian reported CSOS’s board had defied Human Settlements Minister Nomaindia Mfeketo’s instruction that CSOS chief ombud Seeng Letelebe suspended and investigated for the payment. The board will this week receive a legal opinion on Mfeketo’s powers and then submit a new report to her on how it will deal with the matter.
Sabelo Skiti is an investigative journalist. Read more from Sabelo Skiti
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