VBS’s missing R100-million in funeral money

A hundred-million rand owed to truck drivers seems to have disappeared into the hands of officials at VBS Mutual Bank. The money allegedly went to executives and the bank’s chairperson Tshifhiwa Matodzi; itwas spent on sustaining their lives of luxury. The vanished money was part of an allegedly nearly R1-billion “bank heist”, which resulted in insurance company Bophelo Insurance Group facing liquidation.

The R100-million was meant for policyholders of the Transport Sector Retirement Fund at Bophelo Life Insurance, a long-term insurance subsidiary of Bophelo Insurance Group.

That group was owned at the time by Vele Investments and Nzalo Insurance Services, a short-term insurance company.

The money vanished into VBS after Matodzi suggested that the company open a VBS account, where the R100-million had to be deposited as part of the Vele Investments group scheme.

The Mail & Guardian has seen the extensive document trail involved in this process.


The movement of money out of Bophelo had a knock-on effect. A former senior executive at Bophelo told the M&G that: “Bophelo Life got affected because there was a R100-million shortage, which Matodzi and Vele took.”

Now the life insurance company needs to join the queue of the bank’s creditors, or truck drivers and other workers in the transport sector won’t receive funeral cover.

VBS was placed under curatorship in March last year, after the South African Reserve Bank discovered liquidity issues with the bank, when R900-million of VBS’s reported deposits of R2.9-billion could not be confirmed. In the report on the investigation into VBS, compiled by advocate Terry Motau, Matodzi is alleged to be a “controlling mind” and the “main architect” behind the fraud scheme.

The Transport Sector Retirement Fund says it has not yet been directly affected by the missing R100-million, because of a reinsurance agreement it had with Bophelo Life Insurance. But that company is facing liquidation issues thanks to the missing money. The fund’s boss, Joe Letswalo, told the M&G that: “If Bophelo is liquidated, it will not be in a position to put in a claim against VBS or Vele, or any other institution.” He also said he “has no knowledge” of money moving from Bophelo to VBS.

The R100-million has now become an issue in a court battle: the Prudential Authority of the South African Reserve Bank wants both Bophelo and Nzalo to be liquidated because of insolvency problems. The Prudential Authority is an arm of the bank that regulates and supervises financial institutions.

The Transport Sector Retirement Fund and Lebashe Financial Services joined the liquidation process as interested parties in November last year, following the application to liquidate the company. The process has opened up a great deal of information on what really led to the R100-million going missing.

The problems startedwhen R900-million went missing, at the time Matodzi was the VBS bank chairperson. Vele Investments, a company he formed with the former VhaVenda king Toni Mphephu Ramabulana (to whom he was a financial adviser), became a majority shareholder of VBS, allegedly through fraudulent means, in 2017.

Lebashe entered the fray late last year, after giving Vele Investments a R100-million “loan”. This money, according to Lebashe in its court documents, was meant to replace the R100-million that Bophelo had lost in the VBS debacle.

The “loan” had an option of being converted into equity in Vele. But just a week before Bophelo was placed under curatorship, last November, Lebashe recalled its loan and was repaid about R60-million.

Lebashe, which has appeared in the Public Investment Corporation (PIC) commission following allegations of impropriety between the company and the PIC, became a majority shareholder of Vele after these events took place, and it ended up with 70% of Vele.

The Prudential Authority’s attempt to untangle the mess has not resolved who owes money to the Transport Sector Retirement Fund — meaning truck drivers still don’t know if they will have funeral cover. As a result, the fund is opposing the liquidation.

Matodzi, who seems to have been a major beneficiary of this debacle and the VBS collapse, has allegedly bought cars, including a Brabus-tuned Mercedes-Benz G63 (which sells for R2.5-million), a Lamborghini and a Rolls-Royce Phantom.

The court case against Bophelo Life will continue following the Transport Sector Retirement Fund’s and Lebashe’s applications against the winding up of the business.

Despite numerous attempts to contact him, Matodzi did not respond to requests for comment.

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Thanduxolo Jika
Thanduxolo Jika

Thanduxolo Jika is an investigative Journalist and Co-Author of We are going to kill each other today:The Marikana Story. The Messiah of Abantu.

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