Several people implicated in allegations of corruption at VBS Mutual Bank have warned they will challenge the Great Bank Heist report on VBS in court, and others implicated in apparently soliciting bribes from the bank have said it is unfair that they were not given a “hearing” during the investigations.
The explosive report by Terry Motau SC and released on Wednesday by the South African Reserve Bank (SARB) detailed how more than R1.8-billion was looted from VBS, whose depositors included stokvels and burial societies. It includes the names of 53 people or entities “of interest” who received gratuitous payments from the bank. Motau said these “were transactions that occurred without any just or legal cause”.
Former Limpopo ANC Youth League leader Kabelo Matsepe, who was named as having received a gratuitous payment, said the report was “nonsensical”, “relies on hearsay” and was littered with inconsistencies.
“We’ll be taking the report to court. The lawyers are busy with an application now … to request the court to set aside the report,” he said. He expected the application to be ready by Monday. First on the list of entities of interest was Vele Investments, ostensibly the biggest shareholder in the bank, which received almost R940-million in gratuitous payments, followed by the bank’s former chairperson, Tshifhiwa Matodzi, who received more than R325-million.
Brian Shivambu, the brother of Economic Freedom Fighters deputy president Floyd Shivambu, is among those named, allegedly having received more than R16-million from VBS.
In a statement released on Thursday, Brian Shivambu said: “Even though the VBS report mentioned my name, at no stage did the VBS Mutual Bank investigators write to me, interview me or interrogate me to explain my business relationship with Vele Investments.”
He added that, if the investigators had “bothered” to contact him, he would have “satisfactorily demonstrated” that he had had no dealings with the bank. He said he would sue “the owners of the VBS report” for defamation of character.
Motau’s report also identifies suspended Vele chairperson Maanda Manyatshe as having received a gratuitous payment of more than R11 -million.
Manyatshe told the Mail & Guardian he was “just shocked” to find his name listed in the report.
In June, it emerged that, in a confidential statement, Manyatshe had accused Vele of fraudulently acquiring its majority shares in VBS.
He said he was not interviewed during the course of the investigation and that he had spoken to his lawyer, who was preparing papers to challenge the matter in court. He added that there were a number of omissions in the report. “It is just discouraging that an institution like SARB can put on its official website a report that has not gone through proper vetting.”
Motau said those people named were within their rights to take whatever action they saw as appropriate. But, he said, the transactions were made without just or legal cause.
He said the report did not determine whether those implicated were guilty or innocent. The report was factual, detailing who testified, what they confessed to and the implications of that. “All we are saying is there is a case to be answered … and these individuals, most importantly, will be able to have a right to be heard in any event,” he said. “Let them challenge that they didn’t receive this amount and we will put up the evidence [to] say why they received it.”
The report’s revelations have drawn ANC officials, state entities and municipalities into the web of alleged fraud at VBS.
It describes Matsepe as “a politically connected fixer, who became a very well-remunerated middleman and acted as a gatekeeper between VBS and the municipalities”.
Matsepe is alleged to have been central to a scheme to solicit deposits from municipalities, with “commissions” paid to municipal officials, despite the fact that it was against the Municipal Financial Management Act and directives from the treasury for a municipality to place money with a mutual bank.
Based on testimony in the report and from records of WhatsApp conversations, Matsepe is also linked to ANC Limpopo treasurer general Dan Msiza in this “commission agent scheme”.
In what is described as the most “illuminating examples of the rampant corruption and bribery”, the report outlines a WhatsApp conversation between Matsepe and Matodzi in December last year.
Matsepe reports to Matodzi: “The mayor of Vhembe is crying she says we must give her and the speaker a Christmas because they are the ones who are making sure we keep that money for six months. We gave her 300k and she cried and said we gave juniors R1.5 million and we give her 300k.”
The report goes on to record a January WhatsApp conversation between Matsepe and Matodzi, in which Matsepe writes: “Chair please get in touch with Danny and sort out this Vhembe thing, he is seriously unhappy and disappointed on how we are treating it and him …”
“Danny” is identified in the report as Msiza.
Matsepe adds: “He feels that he has put his neck and both of the mayor on the block to protect us and we seem not to be trusting him. Please get in touch with him because I don’t want this to backfire on us.”
But Florence Radzilani, the mayor of Vhembe and the ANC’s deputy chairperson in Limpopo, has rejected the implications of the report.
“It’s unfair for the investigators to make findings based on the conversation between two individuals without giving me a hearing,” she said. “I am being tried in the court of public opinion and I take serious exception and offence on the matter.”
She said she had “never met any official from VBS bank or anyone on behalf of VBS bank to interact with me to discuss bribes”.
Msiza did not respond to questions.
The bank was placed under curatorship in April by the Reserve Bank after it experienced severe liquidity issues. Motau, who was appointed by the central bank to investigate VBS, said the bank’s “ ‘illiquidity’ was the result of the wholescale [sic]theft of the bank’s funds”.
Matodzi, who was not questioned during Motau’s investigation, is described as the “kingpin” of the fraudulent conduct of VBS business. “He, his companies and his associates have been positively identified as the main beneficiaries of the massive fraud,” the report said.
Matodzi has maintained his innocence in separate sequestration proceedings in the high court, brought by VBS curator Anoosh Rooplal against Matodzi and other former VSB executives, including former chief executive Andile Ramavhunga.
Motau referred to a brief affidavit in those proceedings in which “he vehemently proclaimed his innocence and denied that he played any role whatsoever clients against the security of the deposits they had made with the bank”. Motau said in the report: “In the light of Matodzi’s denial of all involvement, I adopted the view that it would be a waste of the investigation’s time and resources to give Matodzi a platform to plead his innocence. That he can do in another forum in due course.”
Municipalities have been among the hardest hit in the VBS scandal. As of April 30, more than R1.2-billion in municipal deposits remained in VBS, the report reveals.
Motau’s report paints a bleak picture of the future of these funds as long as they are tied to the bank. “It seems clear to me that there is no prospect of saving VBS,” he wrote.