R15m bonus to VBS head queried
THE court battle to sequestrate executives accused of looting VBS Mutual Bank has started with a R15 million bonus for chief executive Andile Ramavhunga coming under scrutiny.
Michael Antonie, senior counsel for curator Anoosh Rooplal, wanted the South Gauteng High Court in Joburg to rule the payment was one of fraudulent transactions from the collapsed bank’s coffers.
In his affidavit, Rooplal said the instruction to pay out this R15m to Ramavhunga was made to an employee on the same day a “fictitiously generated deposit” of R350 million was created in the bank account of Vele Investments, VBS’s main shareholder.
Ramavhunga denied the payment to him was fraudulent. It was a legitimate fee due to him for helping Vele acquire Mvunonala Holdings to the tune of R300m, he said.
Ramavhunga said he was entitled to R6m for introducing Robert Madzonga, Vele’s chief executive, to Bongani Mhlanga, and R9m once the deal went through.
Ramavhunga was one of five VBS executives Rooplal – appointed as curator by SA Reserve Bank governor Lesetja Kganyago – wanted sequestrated for orchestrating a “fraudulent scheme of epic proportions” at VBS and allegedly made off with R1.5bn.
Provisional sequestration orders were granted against Tshifiwa Matodzi, Philip Truter and Phophi Mukhodobwane yesterday.
Antonie told Judge Moroa Tsoka it was simply not probable for Ramavhunga to be paid such money for just facilitating the deal. “It’s commercially irrational. On his version, all he had to do was (to) introduce Mhlanga to Matodzi and he’s entitled to R6m. It’s bizarre to the extreme,” said Antonie.
It was clear the payment was not out of a genuine banker-client relationship.
“Ramavhunga, as the chief executive of the bank, is dealing with its biggest shareholder, ostensibly in the form of Vele Investments, and he’s also dealing with his biggest client in the form of Vele,” Antonie said.
“Now, he would have us believe that it is commercially rational that the chief executive of a bank would say to its biggest shareholder and its biggest client, ‘I want to make money out of this transaction in my personal capacity. You’re gonna have to pay me 5% of R300m if you want me to introduce you to Mhlanga’. It’s absurd. No chief executive would ever do that.
“On multiple levels, Ramavhunga’s explanation can rightly be rejected at this stage,” Antonie said.
Adrian Kruger, senior counsel for Ramavhunga, insisted the R15m paid to his client was above board. Contrary to what the court believed, Ramavhunga was not involved in Vele. “My client was not a director at Vele at the time.
He was director and chief executive of the bank. There was no prejudice to the bank through this transaction,” said Kruger. The SA Institute of Chartered Accountants said last week that it was investigating Ramavhunga’s conduct.