/ 10 October 2018

New report backs criminal charges against VBS ‘captors’

A significant number of municipalities that deposited funds with VBS tended to be relatively rural.
A significant number of municipalities that deposited funds with VBS tended to be relatively rural.

Embattled VBS Mutual Bank fraudulently paid close to R2-billion to over 50 people between 2015 and 2018.

This is according to a report into the affairs of the bank conducted by Terry Motau SC. The report was submitted to the South African Reserve Bank (SARB) on October 5.

The report, titled The Great Bank Heist, reveals that R1 894 923 674 was “gratuitously” paid to 53 people over a period of just over three years.

Among the alleged major beneficiaries of these payments are the bank’s former chairperson, Tshifhiwa Matodzi, the bank’s “majority” shareholder, Vele Investments, and former Limpopo ANC Youth League leader Kabelo Matsepe.

The report recommends those identified as having benefited from fraudulent conduct at the VBS be criminally charged and held liable in civil proceedings.

VBS was placed under curatorship in March this year against the backdrop of a serious liquidity crisis. The initial findings of the curator revealed significant financial losses in VBS, which prompted the decision to institute the forensic investigation. VBS is at the centre of a massive and ongoing fraud saga.

The primary objectives of the investigation were to establish whether VBS’s business was conducted with the intent to defraud the bank’s depositors and creditors, whether VBS’s conduct involved any questionable business practices and whether there had been any irregular conduct by VBS shareholders, directors, executive management, staff and stakeholders.

The SARB stipulates that the evidence contained in the report “is not a reflection of either the guilt or innocence of any party as not all parties have been given an opportunity to respond to the evidence” and that it may assist law enforcement authorities in its investigation into VBS.

In the report, Motau found that those who “captured” the bank — enabling them “to embark upon wide-scale looting and pillaging of the monies placed on deposit at VBS” — did so through large payments to “the various perpetrators of the scheme of looting as a reward for their participation”.

Motau contends that the captors of VBS manipulated its banking systems by creating “enormous fictitious deposits” in favour of Vele Investments in addition to obliterating overdrawn banking facilities enjoyed by Vele and its associates running to hundreds of millions of rands.

Bank statements that formed part of a liquidation application brought against Vele, by VBS curator Anoosh Rooplal and reported on by Mail & Guardian in July 2018, exposed Vele Investments as being the vehicle that allowed for looting of more than R1.5-billion from the bank.

Among the alleged captors of VBS is Matodzi. According to the report, there is “overwhelming evidence” that Matodzi is “the kingpin in the fraudulent and theftuous conduct of VBS’ business”. 

Matodzi was also the chairperson of Vele Investments at the time the alleged looting took place.

READ MORE: VBS chair’s family trust implicated in bank’s looting

The report reveals that Matodzi personally received R325 896 831 in questionable payments from VBS.

“Indeed, it emerges very clearly that VBS and Vele have been operated as a single criminal enterprise, with Matodzi firmly at the helm,” the report states.

Matodzi has steadfastly maintained his innocence.

Another person identified as being the recipient of large payments from the bank is Kabelo Matsepe, who, according to the report “became a very well remunerated middleman and acted as a gatekeeper between VBS and the municipalities”.

According to the report Matsepe received R35 400 105 in questionable payments from VBS.

In July an M&G report detailed how a company owned by Matsepe, Moshate Investment Group, was paid R8.4‑million between July and November 2017, through an entity named Robvet.

Robvet is a shelf company which was allegedly used as a conduit by individuals — including senior executives at VBS — to make fraudulent payments. At the time Matsepe denied some of the transactions, claiming they had never reflected in his account.

Matsepe said: “I did work with those people but I think they also used my company’s name but changed bank account details where they deposited money. I have looked through my bank statements and some of the amounts, I am hearing them for the first time from you as the media. I have never received such big amounts of money.” According to the court papers Matodzi is listed as a previous director of Robvet.

READ MORE: ANC bash caught up in VBS web

Motau contends that it is imperative that those who have been identified as participating and benefitting from “this criminal enterprise” be charged and prosecuted.

He concludes the report with a bleak picture of the future of VBS.

“It seems clear to me that there is no prospect of saving VBS. It is corrupt and rotten to thecore. Indeed, there is hardly a person in its employ in any position of authority who is not, in some way or other, complicit,” Motau states.

Read the full report below:

VBS Mutual Bank — The Great Bank Heist by Mail and Guardian on Scribd