‘Great bank heist’ – $200m looted

The Press - - World -

South Africa

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


What­sApp mes­sages showed that SAA and state-owned ports and freight-rail op­er­a­tor 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.

‘‘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.’’

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