VBS contests curatorship decision
Bank in line to get R1.5bn loan from shareholders
The owners of VBS Mutual Bank want the court to set aside a decision to put the financial institution under curatorship.
Vele Investments, which owns 58% of the bank, also want the court to review a law barring mutual banks from accepting deposits from municipalities. This is contained in court papers Vele Investments director Maanda Manyatshe filed yesterday in the North Gauteng High Court in Pretoria after the bank that granted former president Jacob Zuma a R7.8-million loan for his Nkandla homestead upgrades was put under curatorship on Sunday.
Minister of Finance Nhlanhla Nene, one of the respondents in the urgent court application expected to be heard on April 3, placed VBS under new management due to a severe cash-flow crisis.
Other respondents include curator SizweNtsalubaGobodo, Registrar of Banks Kuben Naidoo, Justice and Constitutional Development Minister Michael Masutha and Cooperative Governance and Traditional Affairs Minister Des van Rooyen. Reserve Bank Governor Lesetja Kganyago on Sunday said the bank faced a liquidity crisis after 21 municipalities withdrew their deposits.
Under the current legislation, it is illegal for a mutual bank like VBS to take deposits from municipalities.
Manyatshe, in the court documents, wrote that the board of VBS and the Registrar of Banks, Naidoo, had reached an agreement to not put the bank under curatorship because the Public Investment Corporation (PIC) – a 26% shareholder in VBS – was considering to grant the bank a R1.5-billion loan.
“However, contrary to the above agreement, the bank was placed in curatorship (sic) … by written notice to the chairperson [Tshifhiwa Matodzi],” said Manyatshe, adding that the curatorship has deprived the bank from bringing on board other investors.
Reserve Bank’s Jabulani Sikhakhane said they will defend the matter.