Six years on, VBS victims still feel the pain of losing their money
The widespread looting and eventual liquidation of VBS Mutual Bank may no longer make headlines, but the poor and marginalised victims who lost their life savings continue to suffer. By Lerato Mutsila and
‘Ithought it would be a good thing. But it turns out we were just killing ourselves.” These are the words of Magidi Salfina (67) speaking about how her life changed forever after investing her money in the ill-fated VBS Mutual Bank.
Many senior bank employees and politically connected people drained the coffers of the bank, which was placed under curatorship in 2018.
“I put my entire pension in the bank. When I went to ask for my money, they told me the money was safe; I didn’t have to worry about it. It turns out they took all that money and ate it,” Salfina recounted.
Sitting in front of her hawker stand with her two young grandchildren in Vuwani, in Limpopo’s Vhembe district, Salfina said she thought her future would be one of resting and spending time with her grandchildren. Instead, at the end of the school day, they sit with her under a tree on the side of the road as she tries to make ends meet by selling popcorn and biltong to passers-by.
She had spent years working as a cleaner in the district and had banked on her monthly pension paying enough to allow her to live comfortably until her death.
“We are really suffering. We are starving. You can see I’m sitting here, selling things, instead of enjoying my pension.”
Thinking back to when the news of the VBS scandal broke, Salfina said it didn’t immediately dawn on her that all her money had been stolen. Only when people who were part of community-based savings clubs – stokvels – went to the bank to demand their money, did she realise VBS had been looted and liquidated.
Alarmed by what they told her, Salfina and others who had invested their money with VBS rushed to the bank in Thohoyandou and were devastated by what they witnessed.
“When we got to the bank in Thohoyandou, it was closed and our money was gone.”
Founder turned victim
Daily Maverick’s hunt for the victims of the VBS heist led to the door of none other than Madambi Wilson Muvhulawa, one of the founding members of the now defunct bank.
Sitting in his garden, which overlooks the town of Louis Trichardt, Muvhulawa eagerly detailed the rise and fall of the bank, which was launched as the Venda Building Society in 1982.
“At that point in time, our people were taken as unbankable by the commercial banks,” said Muvhulawa, explaining how the Vha-venda people were excluded from investing or taking loans for development or improving their lives. “They were just keeping the money there, which was used to develop other people,” he added.
Muvhulawa explained that after VBS officially became a bank in 1992, new recruits came in with fresh ideas that revamped its operation. Eventually, in his telling, the new blood started pushing out the founding members and the looting began.
Once it was exposed in 2018, Muvhulawa said that, coupled with the looting, municipalities’
mad dash to withdraw the money they had invested in VBS – in breach of Treasury regulations – resulted in the South African Reserve Bank declaring VBS insolvent and placing it under curatorship. It was finally liquidated on 13 November 2018.
He said the board of directors heard on the news that the bank had been liquidated.
“Our poor people’s money was there, and now VBS had closed, and they could not access that money. That is when our poor people started getting affected. They never had money to run their lives and now this.”
Muvhulawa may have been a founding member and on the board of directors, but he said he was also a victim of the widespread looting. When he spearheaded the drive to recruit local communities to invest in the bank, he invested as well because he wanted to lead by example.
“Because I was the one who recruited these people, I had to go to them and say, let’s fight for ourselves,” Muvhulawa said, explaining what prompted him to help to form a forum for VBS shareholders who lost their money when the bank collapsed.
“We were trying to negotiate with the Reserve Bank to say other people can lose their money, but please make sure that our poor people can get their money.”
The Reserve Bank announced in July 2018, while VBS was still under curatorship, that individual investors with deposits of up to R100,000 in their VBS transactional and
savings accounts were able to claim their funds. This did not include stokvels and burial societies, whose payments came later, once the curator had drawn up a list of the bank’s creditors.
The payout wasn’t enough
Salfina, who was a member of the shareholders’ forum, said she got money back but it was not close to the amount she had put in.
“The first payout, I got R100,000. And for the second payout I only got R10,000. Since then that’s all I’ve been given,” she said.
Asked how much she
thought her pension payout was supposed to be, Salfina said it was about R1-million.
She said no VBS representatives or officials from the government came to talk to the community about what had happened. All they heard was that the government was taking steps to address the issue and that, when the money was retrieved, the victims would gradually get what had been stolen from them.
“I am not sure they are going to give us the money back. This is really hurting us,” Salfina added.
A short walk away from Salfina’s stall sat Nelta Ngobeni, shaded by her umbrella as she sold fresh vegetables and atchar, which she does to make ends meet.
Unlike Salfina, Ngobeni was only affected through the stokvel she is a member of – and she is grateful for that. “All our money was taken. To this day I don’t even know how much. All I know is it was more than R100,000.”
Ngobeni’s stokvel members also got a total of R100,000 back through the efforts of the shareholders’ forum.
Regardless of how much both Salfina and Ngobeni lost, they plan to vote on 29 May.
“What happened with VBS has nothing to do with the elections,” Salfina said, adding that the heist had nothing to do with President Cyril Ramaphosa, indicating her intention to vote for the ANC.
Ngobeni said she was still unsure who she would vote for, but she definitely planned to cast her ballot.
For his part, Muvhulawa is still coming to terms with the dramatic decline of the bank he had helped to start. “I was there from day one and I was personally involved in convincing ordinary people to bank their money. When I look at them it pains me.” Muvhulawa said the fall of VBS not only affected him financially, it also affected his health. “Money lost can never be [recovered],” he said. “When you are old you can never build it up again, because it took time to build up that money we invested.”