‘Great bank heist’ – $200m looted
A probe into the failure of VBS Mutual Bank found that at least 53 people and companies may have benefited from the looting of 1.9 billion rand (NZ$200 million) from the South African lender before its collapse.
Investigator Terry Motau, appointed by the central bank to lead the inquiry, is calling for arrests to be made – and for tax authorities to swoop down on those identified in his 139-page report, titled The Great Bank Heist. He also recommends that VBS be wound up, and that an auditor’s liability claim be brought against the company’s auditor, KPMG South Africa.
‘‘There is no prospect of saving VBS,’’ Motau said in the report, which was posted on the central bank’s website yesterday. ‘‘It is corrupt and rotten to the core. Indeed, there is hardly a person in its employ in any position of authority who is not, in some way or other, complicit.’’
Although the collapse of VBS did not destabilise the country’s financial system, it exposes wrongdoing by politically connected individuals who went on spending sprees, buying luxury cars and chartering helicopter flights with the savings of almost 23,000 retail depositors. Motau’s report detailed a bank that issued payments to individuals in exchange for massive deposits from state entities and municipalities, which now risk losing the money they parked with VBS even though most retail deposits are safe.
Before being taken over by an administrator in March, the bank caught public attention in 2016 when it gave former President Jacob Zuma a mortgage, enabling him to settle a Constitutional Court order to repay taxpayers some of the money spent upgrading his private residence.
According to the report, Andile Ramavhunga, former chief executive officer of VBS, said he oversaw the payment of 1.5 million rand to what he called the Dudu Myeni Foundation in order to secure a 1 billion rand deposit from a state-owned rail agency.
No foundation with this name existed. But the name may have been a reference to Zuma’s own foundation, which is chaired by South African businesswoman Duduzile Cynthia Myeni, Motau alleged. Myeni was ousted as chairwoman of South African Airways last year, having served on the board of the unprofitable airline in various capacities since 2009.
WhatsApp messages showed that SAA and state-owned ports and freight-rail operator Terry Motau, investigator Transnet SOC Ltd. were among Ramavhunga’s targets for deposits. Investigators also heard testimony claiming that VBS sought 2 billion rand of funding from the Public Investment Corp., Motau said. Ramavhunga ‘‘steadfastly denied that he was in any way involved in any unlawful conduct,’’ his report showed.
There were many examples of loans extended by the bank where ‘‘few, if any, monthly installments were honoured,’’ the report said.
‘‘There are also very large overdraft facilities where no amounts were ever paid into the accounts and the facility limits simply increased to permit the escalating outflows.’’
The Free State Development Corp. was the third-largest beneficiary of the plundering, having received 104 million rand.
– Washington Post
‘‘It (VBS Mutual Bank) is corrupt and rotten to the core. Indeed, there is hardly a person in its employ in any position of authority who is not, in some way or other, complicit.’’