No VBS funds went to party or Shivambu EFF
The EFF and its deputy president, Floyd Shivambu, are sticking to their guns and deny they have benefited from the looting of VBS Mutual Bank.
A forensic report commissioned by the SA Reserve Bank, published last week, found that Shivambu’s brother Brian had received R16m in “gratuitous payments” from VBS, which formed part of a nearly R2bn alleged looting of the bank, leading to its near-collapse.
It has since been alleged that both Floyd Shivambu and the EFF — vocal critics of the Bank’s handling of the VBS matter – benefited from some of this money via Brian Shivambu, with the EFF deputy president reportedly receiving as much as R10m.
The Bank placed VBS under curatorship in March after withdrawals by municipalities, which are legally barred from depositing money with mutual banks, caused a cash crunch. At the end of April, deposits from 14 municipalities totalled R1.2bn
— money they are unlikely to recover from the bank.
At a media briefing on Tuesday, the party’s firebrand leader Julius Malema was adamant that his party did not receive any money from VBS and has called on those with proof showing otherwise to come forward. “We have never received any money … in the EFF. We have not received any donation, that is from preliminary investigations we have done,” he said.
The party has also continued its attack on the Bank’s handling of the matter and the way the forensic investigation was carried out.
Floyd Shivambu said the VBS report did not say anything about “money movements” of Brian; it merely said there were “gratuitous payments” made to him. Shivambu said the allegation that he had received VBS money from his brother was “pure insanity” and “madness”.
Brian Shivambu too has denied any wrongdoing and has indicated that he will approach the courts over the matter. He maintains his company, Sgameka Projects, was appointed in 2017 to “provide professional consulting services to Vele Investments in their mining and insurance businesses”, and was paid for these services through a VBS bank account.
Vele is the majority shareholder of VBS.
Malema said Floyd Shivambu had taken the EFF into his confidence on the matter and that the party had “no reason to doubt him. He is not mentioned in the report. The EFF has not been mentioned in the report,” he said.
Floyd Shivambu had provided the party with his bank statements going back as far as 2014 and, according to the EFF, they showed there was money exchanged between him and Brian Shivambu, as well as between him with his other brother, Lucky, and his parents. But nothing had amounted to the R10m Floyd Shivambu was alleged to have received, the party said.
Malema confirmed that Brian Shivambu worked for the EFF. One of his roles was to sell EFF merchandise. He also worked for the EFF student command. He said it was possible that Brian Shivambu had put money into the EFF’s account because members sometimes donated money to the party for things such as buses to transport supporters to events.
Malema said many people implicated in the report were going to approach the courts because they had not been asked to give their side of the story. “If they are successful, it means the report is null and void. If they are not successful, it means there are basis for law enforcement to move in and start prosecuting people.”
The great tragedy of the VBS Mutual Bank scandal is that a group of gluttonous people set out to willfully rob thousands of poor people of their money, which was then spent wastefully to exhibit an extravagant lifestyle.
The poor who banked with VBS are panicked and bewildered by what happened, and sadly cannot be assured of the appropriate remedy — getting all their money back and seeing the perpetrators face the full might of the law.
The only silver lining in the appalling saga is that the amount that was looted was not higher than the estimated R2bn.
Had VBS’s directors succeeded in their plan to solicit R1bn from the Passenger Rail Agency of SA, it would have meant further raiding of a stateowned company already besieged by state capture.
The fraud and corruption perpetrated at VBS, which included bribery to ensure massive deposits into the bank from municipalities in Limpopo, as well as the cover-up facilitated by KPMG, will be a major test for the Hawks and the National Prosecuting Authority (NPA).
With the country in the clutches of massive public and private sector corruption, the criminal justice system is the only available counterforce against this spectrum of crime, from the capture of our state to illicit activity at Steinhoff, the biggest incident of fraud in SA corporate history.
But the criminal justice system is in a state of dysfunction, deliberately crippled by political interference and bad leadership in the police, NPA and intelligence services.
While the Hawks is now in a process of recovery under the leadership of advocate Godfrey Lebeya, the NPA remains unstable and barely functional as President Cyril Ramaphosa continues to vacillate over the appointment of a new national director of public prosecutions.
It is understandable that Ramaphosa is being cautious on this appointment, considering the disastrous history of the NPA, but as long as there is no permanent national director, the criminal justice system will remain paralysed.
With the release of the explosive Reserve Bank forensic report into VBS, compiled by advocate Terry Motau and Werksmans Attorneys, the Hawks and NPA have a guideline for their case, with witness accounts of what happened as well as a full list of recipients of dodgy payouts from the bank.
Although the Hawks and police have to verify the evidence and interview witnesses themselves, the forensic data offered to them by the Bank can almost serve as crib notes to construct solid cases.
But even with some of the legwork having been done, the police and NPA do not have a great track record in prosecuting complex commercial crime cases.
The problem is further compounded by the fact that the prosecutor leading the Hawks and NPA team on the VBS case, advocate Marijke de Kock, appeared to misunderstand why the Bank appointed the Motau investigation.
Reserve Bank deputy governor and CEO of the Prudential Authority Kuben Naidoo commissioned the forensic investigation into the affairs of VBS in April. This was in compliance with the Financial Sector Regulation Act and not because the central bank was on its own fishing expedition.
Even before Motau completed his investigation, it became obvious to the Bank that there was collusion between VBS and KPMG to deceive the Bank about the liquidity status of the institution. The Bank therefore laid charges against the VBS directors and KPMG two months ago for using fraudulent audit statements to mislead it. This should have been a straightforward prosecution that could have seen the main players in the VBS saga, including KPMG auditor Sipho Malaba, already in the dock.
Instead, when the matter was presented to the NPA, De Kock wrote to the Bank questioning why the forensic investigation was appointed and warning that it could impede future prosecutions.
This response betrays a lack of understanding of the legislation dictating the process when financial institutions are in distress, as well as a disregard of the clear case of fraud presented to the prosecutor.
De Kock has a history of dithering on such cases.
In 2016, former NPA head Shaun Abrahams removed De Kock from the team dealing with the case involving prison officials and facilities management company Bosasa after she failed to effect a prosecution for six years.
The Special Investigating Unit handed over its report on the Bosasa matter to the NPA in 2010 but no action was taken.
Abrahams was apparently of the view that De Kock was directly responsible for the delay. It is therefore worrying that De Kock has now been entrusted with the VBS case, which requires swift and ultimately successful prosecutions.
The VBS case has drawn much public attention because of the brazenness of the bank heist and the high-profile names that feature on the list of people who were paid exorbitant amounts of money. These include VhaVenda king Toni Mphephu Ramabulana, who has now offered to pay back any tainted money, ANC Limpopo deputy chair and mayor of the Vhembe District Municipality, Florence Radzilani, and provincial treasurer Danny Msiza, as well as Brian Shivambu, the brother of EFF deputy president Floyd Shivambu.
But the politics aside, this case needs to be dealt with effectively because the VBS heist is symptomatic of the shameless corruption that preys on the poor.
Irrespective of who the perpetrators and collaborators are, this case will be critical in reestablishing the credibility of the criminal justice system and bringing the thieves to book.
EXECUTING A CLEAN AND SPEEDY PROSECUTION OF THE VBS LOOTERS WILL HELP GIVE HOPE TO SOUTH AFRICANS