VBS was reck­less with R7.8m Nkandla loan

Cape Times - - FRONT PAGE - SIHLE MAVUSO

THE high court ap­pli­ca­tion by the liq­uida­tor of VBS (Venda Build­ing So­ci­ety) Mu­tual Bank to recover mil­lions owed to it by for­mer pres­i­dent Jacob Zuma, has re­vealed how the bank was reck­less while con­duct­ing its busi­ness be­fore it col­lapsed.

Other than tak­ing a huge fi­nan­cial gam­ble in 2016, by lend­ing money to a man be­yond his work­ing age (Zuma was 74 at the time), the bank also took a gam­ble by giving out the home loan with a ru­ral prop­erty as a guar­an­tee.

The R7.8 mil­lion loan was met with out­rage and the bank was ac­cused of reck­less lend­ing, but it stood its ground say­ing it con­ducted thor­ough due dili­gence on Zuma’s af­ford­abil­ity.

More out­ra­geous this week was how the bank, ac­cord­ing to pa­pers that have since been leaked to the pub­lic, used Zuma’s Nkandla ru­ral home, as col­lat­eral even though the home was built on com­mu­nal land that is owned by the con­tro­ver­sial In­gonyama Trust.

The trust is cur­rently fac­ing a court bat­tle over rental agree­ments with some res­i­dents in KwaZulu-Natal.

It is also fac­ing pressure of dis­band­ment, with those against it ar­gu­ing that the per­mis­sion to oc­cupy does not grant res­i­dents to­tal own­er­ship of the land.

With that, it is urged that the land can­not be used as col­lat­eral to get a bank loan or any other form of fi­nance that can be backed with a prop­erty on it.

De­spite that, ac­cord­ing to the leaked sec­tion of the home loan agree­ment seen by Independen­t Me­dia which was signed with Zuma in 2016, VBS agreed to at­tach the “Nkandla Zuma Home­stead in KwaZulu-Natal”.

Speak­ing to Independen­t Me­dia, ac­count­ing an­a­lyst Khaya Sit­hole said no­body knows how the liq­uida­tors hope to get the law to back it to at­tach the Zuma home­stead as it is sit­ting on com­mu­nal land.

“Everybody is just spec­u­lat­ing that maybe the lawyers will find a loop­hole. ”

Sit­hole said VBS was en­gaged in reck­less lend­ing and one of the ways Zuma may get out of this loan agree­ment was to ar­gue that they were reck­less to lend him money.

“The key ques­tion here was whether he could af­ford to ser­vice the loan.

“The sec­ond one is what is the se­cu­rity… I think he can get out of this by ac­cus­ing them of (be­ing) reck­less be­cause it doesn’t make sense,” he said.

The bank lent Zuma R7.8m which was needed to pay the state af­ter for­mer pub­lic pro­tec­tor Thuli Madon­sela ruled that some of the se­cu­rity up­grades at the for­mer pres­i­dent’s Nkandla home were not supposed to be paid for by the state.

Zuma’s lawyers, Dan Mantsha and Muzi Sikhakhane, did not re­spond to calls nor did his spokesper­son, Vuk­ile Matha­bela.

Again as Zuma’s le­gal trou­bles mount, an ex­change be­tween Zuma’s lawyers and the bank shows that in May this year he, through his lawyers, made an un­ful­filled un­der­tak­ing to set­tle the ar­rears of more than R500 000 but later re­neged.

See Page 3 PHANDO JIKELO African News Agency (ANA)

AT AN emo­tional me­mo­rial ser­vice for leg­endary for­mer Spring­bok wing Ch­ester Wil­liams, held at UWC, Wil­liams’s wi­dow Maria with her chil­dren, twins Matthew and Chloe, who sat on ei­ther side of her along with her son, Ryan Robson, and Pub­lic Works Min­is­ter Pa­tri­cia de Lille as they cel­e­brated his life. |

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