Get more Mail & Guardian
Subscribe or Login

Millions lost and now more VBS liquidations



Two companies linked to disgraced former KPMG partner Sipho Malaba face permanent closure after they failed to repay more than R28-million in loans, vehicle finance and mortgages granted to them by the now defunct VBS Mutual Bank.

The two companies, Egrove Holdings and Betanologix, are the subjects of a court application to place them under final wind-up. The application was launched by VBS liquidator Anoosh Rooplal in the Johannesburg high court late last month.

This is after both companies failed to respond to several demands for full and final payment of R21-million for two overdraft facilities, R490 000 for a car loan and R8.8-million for a home loan that were in arrears.

Both companies have the wife of dismissed former KPMG partner Sipho Malaba — Jacqueline — listed as director.

Malaba was fired by KPMG after he was found to have purposefully overlooked a R1-billion cash shortage at the now defunct VBS bank at the time he was its external auditor.

The forensic investigation report into the crash of VBS, penned by senior counsel Terry Motau, uncovered the R28-million in gratuities paid to Malaba — through the two companies — to buy his silence regarding the true state of the bank.

The bank housed deposits of numerous societies and stokvels belonging to mostly rural and poor people in Limpopo. It also had R1.5-billion from equally poor municipalities across the country and several other state-owned entities.

The deposits by the municipalities and state organs were found to have been illegally made and often saw several middlemen, including politicians and bankers, rewarded handsomely for bringing in the cash.

Motau’s report also noted that billions were then looted from the bank by connected politicians and executives through payments, loans and mortgages.

VBS was finally liquidated in 2018, following an application by the South African Reserve Bank that had earlier placed it under curatorship.

A statement issued by the bank at the time said: “Whilst VBS is currently under curatorship pursuant to a decision taken by the minister of finance on 10 March 2018, the Prudential Authority is of the view that curatorship must now be terminated and VBS must be placed in final winding-up.”

It added that: “VBS is hopelessly insolvent as a result of the massive frauds [that] have been perpetrated against it”.

The Mail & Guardian has previously reported that Malaba, one of two KPMG executives who resigned from the audit firm in the wake of the VBS debacle, did not disclose to KPMG that they held the loans with VBS.

Malaba was KPMG’s lead auditor on the account, while his colleague Dumi Tshuma, also a senior executive, worked alongside him.

The two denied any wrongdoing and instituted a R30-million damages lawsuit against KPMG. Malaba had also indicated that he intended to take Motau’s report on review.

This week, the liquidator, Rooplal, also applied for the court to order that former president Jacob Zuma pay back a R7.8-million loan given to him by the bank in 2016.

Rooplal also wants the court to grant an order allowing him to attach Zuma’s Nkandla homestead. The outstanding payment is for a loan Zuma took out to repay the government’s unauthorised upgrades to his property.

In his application to wind-up the Egrove Holdings and Betanologix, Rooplal reveals they were each granted R3-million in overdraft facilities in 2016, and these were increased to R11.1-million and R8.6-million by December 2017.

Egrove was also granted a R455 500 loan to purchase a Mercedes-Benz CLA 200, as well as R7.3-million bond to purchase a property in Maroeladal, Fourways, in March and August 2016, respectively.

The latter two loans were serviced until November 2017, Rooplal said, and to date Egrove has failed to remedy this breach of contract, prompting several notices of demand this year.

The companies acknowledged the debt in letters by attorney Hlubi Radebe of MI Radebe Attorneys in March, but failed to respond to requests for detailed payment plans.

In the founding affidavit accompanying his application, Rooplal said: “The applicant is creditor of Egrove and has the necessary locus standi in terms of section 9 of the Insolvency Act to institute this application and apply for the relief sought.”

He added that: “Egrove is deemed to be, and is in fact, unable to pay its debts, and Egrove has admitted the indebtedness and its inability to pay the debt.”

Radebe on Thursday said both Egrove and Betanologix “went into voluntary liquidation with the master of the high court in Johannesburg”.

Winding up involves ending all business, and includes liquidation. Liquidation involves the selling of company assets to pay creditors, and then closing the company.

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Sabelo Skiti

Sabelo Skiti is an investigative journalist.

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.

Related stories


If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here


Subscribers only

Fears of violence persist a year after the murder of...

The court battle to stop coal mining in rural KwaZulu-Natal has heightened the sense of danger among environmental activists

Data shows EFF has lower negative sentiment online among voters...

The EFF has a stronger online presence than the ANC and Democratic Alliance

More top stories

Libyan town clings to memory of Gaddafi, 10 years on

Rebels killed Muammar Gaddafi in his hometown of Sirte on 20 October 2011, months into the Nato-backed rebellion that ended his four-decade rule

Fishing subsidies in the W. Cape: ‘Illegal fishing is our...

Fishers claim they are forced into illegal trawling because subsidies only benefit big vessels

Kenya’s beach boys fall into sex tourism, trafficking

In the face of their families’ poverty, young men, persuaded by the prospect of wealth or education, travel to Europe with their older female sponsors only to be trafficked for sex

press releases

Loading latest Press Releases…