Curator points to possible graft at VBS
THE curator of VBS Mutual Bank believes there may have been fraudulent reporting and transactions to extract money from the bank in order to further the personal interests of certain key individuals and companies related to the bank, Registrar of Banks Kuben Naidoo said.
He made the claims in an affidavit opposing the application by the parent company of VBS, Vele Investments, to have the curatorship set aside on the grounds that it was irregular. VBS was put under curatorship on March 11 because it was facing a severe liquidity crisis and could not repay deposits as and when required.
Naidoo referred to the initial findings by the curator, Sizwe Ntsaluba Gobodo Advisory Services’ representative Anoosh Rooplal. These indicated that VBS had been “severely mismanaged”.
In addition, there were a significant number of large transactions between the bank, related companies and staff. Corporate governance at the bank was particularly weak.
Rooplal was concerned that large balances, about R1.8-billion, in suspense accounts “may be a fictitious creation of deposits on the banking system”.
The assets were reflected as a suspense account entry, which Naidoo said was highly unusual.
Rooplal had not been able to corroborate this entry and/or confirm that it represented a real and tangible asset of the bank.
Among Rooplal’s initial findings were that as at March 12 the liquid cash position of the bank amounted to R24.7-million compared with total deposits that were “ostensibly” in the region of R2.9-billion, although Rooplal had not been able to confirm the veracity of a large portion of the corporate deposits of R900-million. —