The prudential authority, which regulates South Africa’s banks, has applied to court to liquidate and finally wind up VBS Mutual Bank, it said in a statement on Tuesday.
“This is as a result of the fact that VBS is hopelessly insolvent and massive frauds have been perpetrated against it,” the prudential authority said in a statement.
“As a result there is no prospect of entering into any resolution plan in respect of VBS.”
The embattled mutual bank was placed into curatorship earlier this year, after what appeared to be a liquidity crisis. It was subsequently revealed in an investigation, led by advocate Terry Motau, that the bank had lost almost R2-billion to extensive fraud and corruption.
Motau’s report into the VBS collapse has implicated several highly placed political office bearers in the alleged corruption, as well as the banks’ former management and its largest shareholder Vele Investments.
The prudential authority expects the application for the final winding-up of VBS to be set down for hearing, by the Pretoria high court, on Tuesday, November 13.