HOW GREED KILLED A DREAM
Last week’s provisional sequestration of some of the VBS Mutual Bank directors should serve as a simple but important lesson: the only sustainable way of creating wealth is entrepreneurship and dogged hard work in the service of the customer. The other, equally important, is for those who have the means to invest in the ideas of the entrepreneurs. This process normally takes generations for the capital and sweat equity investors to reap the rewards: to be genuinely wealthy, and never having to worry about law enforcement agencies barging in to disrupt the party.
The founders of VBS, too, must have nursed this noble dream when they created the Venda Building Society amid all the challenges of the apartheid system in 1982. And the bank trundled along nicely, outliving many of its peers, bar the Ithala Development Finance Corp. That is, until greed took over.
Judge Moroa Tsoka has granted the liquidations of the estates of Robert Madzonga, COO of the stricken bank; chair Tshifhiwa Matodzi; CEO Andile Ramavhunga; CFO Philippus Truter; and Phophi Mukhodobwane, general head of treasury and capital management. Tsoka also granted the liquidation of Vele Investments, which purported to be VBS’S largest investor.
Madzonga seems the most colourful of all the characters. Six years ago I encountered him in Cape Town at the ICT Indaba, which became famous for the corruption linked to Dina Pule, then communications minister. Madzonga was representing MTN Group as its chief corporate services officer. He was in the company of four other “entrepreneurs” who were bidding to supply set-top boxes for digital terrestrial television. In the two hours we spent having dinner (I worked for Bloomberg at the time), not one of the “entrepreneurs” said a single word about the value they’d produce. It was only about “making money”.
Soon after, MTN parted ways with Madzonga because of a scandal that relieved MTN of no less than R30m, through law firms that submitted what MTN said were irregular and fictitious invoices.
Yet a few years later he emerged as a director of a bank that took deposits from widows and orphans. Madzonga and his fellow VBS directors, no doubt descendants of those great dreamers who founded the bank at the height of apartheid, have achieved what even that wicked and racist system failed to do — kill off black people’s dreams of creating a finance institution capable of providing the banking services that were the preserve of the “superior race”. Much evidence, in the form of their opulent lifestyles and fraudulent transactions at VBS, links them to the looting of at least R1.5bn from the 36-year-old bank.
The mansions of Thohoyandou
About four years ago, on my only visit to the town of Thohoyandou, I was impressed by the mansions in the suburbs. Many of those, and many I saw in the villages of Dzanani and Nzhelele, could fit perfectly in the wealthiest suburbs of our cities. Yet they seemed out of place: the centre of Thohoyandou was dominated by old and poorly maintained government buildings.
Never had I seen such opulence in my own Transkei homeland or in Ciskei, having only been exposed to the poverty and neglect of the bantustan system in those areas.
It only became apparent years later how so many in Venda could live in such mansions. VBS had been beavering away for decades, helping hardworking and ambitious locals with savings schemes and home loans that are still not available to most in rural SA.
The provisional liquidation is just the first step in recovering what was stolen from the people of Venda. Sadly VBS may be gone forever, the victim of unbridled greed.
The provisional liquidation is just the first step in recovering what was stolen from the people