The man who was at the centre of an R80-million deposit scandal in the defunct VBS Mutual Bank is facing a multimillion-rand lawsuit from his former business partner.
Ralliom Razwinane, the owner of Gundos Wealth Solutions (GWS), was found in a forensic report to have been the adviser in a deal that saw the controversy-stricken Community Schemes Ombudsman Services (CSOS) deposit its R80-million investment into VBS Bank’s current account at FNB.
Now his business partner in GWS, Elias Diale, has taken him to court alleging that he transferred their company’s money from the business account into his personal account.
He also wants the high court in Johannesburg to instruct Razwinane to ensure that he is appointed as a fellow director in the company and for Razwinane to open up the company’s books to reveal how much profit the company has made.
The Mail & Guardian understands Diale funded GWS, at a time when Razwinane was on the verge of filing for bankruptcy, in return for a stake in the company.
When contacted this week Diale confirmed the court action, but refused to comment further.
“The matter is sub judice and accordingly I do not wish to compromise that process where we are proceeding as plaintiff against Ralliom Razwinane and the company Gundo Wealth Solutions (Pty) Ltd,” he said.
Razwinane refused to comment.
VBS was liquidated last November following a high court application by the prudential authority, the regulator of banks in South Africa.
A subsequent investigation, by advocate Terry Motau SC, revealed that almost R2-billion was looted from the bank. Motau’s report — The Great Bank Heist — was commissioned by the Reserve Bank and implicated several highly placed political office-bearers in the alleged corruption.
Besides hundreds of millions deposited by private citizens and burial societies from rural Limpopo province, the bulk of VBS’s deposits came from local municipalities in Gauteng, North West and Limpopo, as well as several state-owned entities, such as the CSOS.
In October the Free State Development Corporation (FDC), another of Razwinane’s clients that placed monies with him to invest in VBS, announced it would conduct a forensic investigation into how R100-million of its money was deposited or invested in the mutual bank.
This was after it was fingered by Motau for having received R104-million of the money that was looted from VBS.
After the release of Motau’s forensic report, which highlighted the payment, FDC executive for core operations Grace Shaba said the payment was a return on investment.
“[The FDC] is particularly concerned about the fact that [it] is mentioned as one of the parties, which may be involved in the looting of the VBS Mutual Bank, by receiving an amount of R104 130 932,” Shaba said at the time.
She could not be reached for further comment this week.
In August the M&G reported that Razwinane invested some R80-million from the CSOS that could later not be recovered. He was reported to have received payments worth more than R24-million “without any just or legal cause” from VBS. At the time he said the monies were commission earned from the mutual bank for bringing investment their way.
Two forensic investigation reports into the lost CSOS monies and the VBS investment, made damning findings, including that: Razwinane’s company, which invested R80-million and R20-million of CSOS’s monies, was allegedly not registered with the Financial Sector Conduct Authority; the CSOS, which made the investment without following proper processes and without treasury’s permission, attempted to mislead Minister of Human Settlements Nomaindia Mfeketo when she demanded answers on the report; the R20-million invested in Absa was actually invested in a GWS account and not in the CSOS’s name; and CSOS and VBS officials created fictitious statements and deposit slips that showed the money was deposited into a VBS investment account when it was actually deposited into the bank’s corporate current account.
The investigations were commissioned by the CSOS board and its government shareholder, the department of human settlements. They recommended Razwinane be criminally charged for his conduct, which allegedly amounted to fraud and attempted theft.
Razwinane has consistently insisted he is innocent and that he merely introduced the two parties after the CSOS had engaged him for advice on how best to invest R100-million in surplus funds.