Court orders liquidation of VBS

Beleaguered VBS Mutual Bank was liquidated on Tuesday following a court order by the high court in Pretoria.

The bank’s business will now be wound up.

At the end of October, the prudential authority — which regulates South African banks — applied to liquidate VBS. The application, the prudential authority said at the time, was because VBS was “hopelessly insolvent and massive frauds have been perpetrated against it.”

READ MORE: Final death knell for VBS, as liquidation application launched

The South African Reserve Bank placed VBS under curatorship in March this year after the mutual bank had experienced what had then appeared to be a liquidity crisis.

When a bank is placed under curatorship, it is typically expected to be salvaged. According to Jannie Rossouw, the head of the School of Economic and Business Sciences at the University of the Witwatersrand, once the registrar is of the view that the bank is insolvent, it is “legally obliged to apply to the court for liquidation.”

The reason VBS is being liquidated is to allow people to recover the money they had deposited in the bank. This is made provision for under insolvency laws and the Companies Act. Rossouw, added that the liquidation of VBS “will mean that the recommendations of the investigator into the affairs of VBS can be followed.”

EXPLAINER: Lessons from the collapse of VBS

Last month, Terry Motau SC released his explosive investigation titled The Great Bank Heist which explained how almost R2-billion was looted from the bank. Motau’s report — which was commissioned by the Reserve Bank — implicated several highly placed political office bearers in the alleged corruption.

Since the bank’s collapse, the Mail & Guardian’s investigative team has reported how the Economic Freedom Fighters’ Floyd Shivambu’s brother, Brian, was connected to the bank and how former North West premier Supra Mahumapelo “vigorously encouraged” North West municipalities to invest with the bank.

READ MORE: Juju’s cousin also linked to VBS

Motau’s report noted that as of April 30, municipal deposits in the bank totalled R1.2-billion.

The collapse of the bank has not only affected the deposits that municipalities had with VBS, it has also cast into doubt whether private individuals will be able to recover their deposits from VBS such as the R370-million deposit by Bophelo Beneficiary Fund and Bophelo Benefit Services which caters for the widows and orphans of former mineworkers.

Advertisting

ANC and the state step back from taking action against...

Despite alleged abuses of power and people’s trust, the ANC appears to have abandoned plans to reform the controversial Ingonyama Trust Board

Mkhwebane moves to halt ‘grossly unfair’ impeachment process

Mkhwebane moves to halt ‘grossly unfair’ impeachment process

Chaos theory: How Jürgen Klopp has harnessed the unpredictable

The Liverpool manager has his side playing unstoppable football but it’s the attention to detail off the field that has bred the success

Miners speak out against Sibanye

Not a year into buying Lonmin, Sibanye is accused of mistreating the mineworkers who were injured eight years ago during the Marikana massacre. But the platinum giant says it is a miscommunication. Athandiwe Saba and Paul Botes visit Marikana to find out the truth
Advertising

Press Releases

Wellcome Trust award goes to UKZN mental health champion

Dr Andr? J van Rensburg, a senior researcher in UKZN's Centre for Rural Health, received the Wellcome Trust Discretionary Award.

MTN gears up to deliver improved customer service

On 28 January, the first batch of MTN contract customers will be migrated onto the new customer service platform.

Request for expression of interest on analysis of quality and outcome indicators for regional and district hospitals in Lesotho

Introduction The Ministry of Health of Lesotho with the support of the World Bank funded Nutrition and Health Systems Strengthening...

MiX Telematics enhances in-vehicle video camera solution

The company has launched the gold MiX Vision Bureau Service, which includes driver-coaching tools to ensure risky driver behaviour can be addressed proactively and efficiently.

Boosting safety for cargo and drivers

The use of a telematics system for fleet vehicles has proved to be an important tool in helping to drive down costs and improve efficiency, says MiX Telematics Africa.

Silencing the guns and firearms amnesty

Silencing the guns and firearms amnesty

Gender-based violence is an affront to our humanity

Gender-based violence is an affront to our humanity

UK-Africa investment summit 2020: Think Africa Invest SA

UK-Africa investment summit 2020: Think Africa Invest SA