Gungubele cautions ANC caucus against VBS bailout

● Deputy finance minister Mondli Gungubele has warned ANC MPs against pushing for a taxpayer-funded recapitalisation of VBS Mutual Bank because it would send a message that “criminals can steal” and the government would pay.

Members of the ANC parliamentary caucus said Gungubele made the remarks at a closed meeting on Thursday, when some MPs, including deputy communications minister Pinky Kekana and labour committee chair Lemias Mashile, said the government should “save VBS”.

The caucus debate revealed divisions as to how the Treasury and the Reserve Bank should manage the situation after Yunus Carrim, chair of the finance committee, said earlier in the week that the VBS bank should be saved.

The Sunday Times has also established that finance minister Tito Mboweni and Reserve Bank governor Lesetja Kganyago have been called to a meeting about VBS with the standing committee on public accounts.

Gungubele declined to discuss the caucus meeting.

But he said the Treasury was not swayed by calls to provide a financial rescue package for VBS in the way that it did with African Bank in 2016.

“What costs were incurred by government on the African Bank situation? It’s zero. But on the VBS it is R336m,” said Gungubele.

“African Bank was solvent and VBS is insolvent,” he said.

Unsustainable

“The source of the problem of African Bank was an unsustainable business model. If you go to the VBS, the source of the problem is fraud.”

Gungubele said a decision on whether to wind up VBS would be taken once the liquidation process was concluded. The bank is currently under curatorship.

He said that before deciding the fate of the bank, the Treasury and Reserve Bank’s interest now was first to recover the stolen money and to ensure that VBS depositors and creditors were paid back.

Kekana and Mashile refused to comment on their positions regarding VBS, saying caucus discussions were confidential.

Nonceba Mhlauli, a spokesperson for ANC chief whip Jackson Mthembu, said the official stance of the party regarding the future of VBS would be outlined on Tuesday during a debate in the National Assembly.