Sarb starts VBS Bank wrap up

‘HOPELESSLY INSOLVENT’: AFTER GUTTING BY GRAFT

The central bank’s report found at least R1.9bn was looted from VBS by over 50 individuals, entities.

The central bank said yesterday it had started the process of winding up VBS Mutual Bank, which was caught up in a corruption scandal earlier this year.

A report commissioned by the central bank titled The Great Bank Heist and published this month found that at least R1.9 billion had been looted from VBS by more than 50 individuals and entities.

In March, VBS was placed under administration by the central bank because of liquidity issues. Yesterday, the SA Reserve Bank (Sarb) said VBS was “hopelessly insolvent” and that the regulator had applied to the high court to close it down.

The VBS saga has prompted a public outcry in SA because many municipalities had deposits with the bank and politicians are alleged to have benefitted from the fraud.

The report commissioned by Sarb said VBS actively sought to attract deposits from municipalities and other state entities and that bribes were paid to solicit the money.

It also recommended that the government seek damages from KPMG, which audited VBS’ financial results. KPMG said earlier this month it would study the contents of the report before commenting but is yet to issue a statement.

The bank was thrust into the spotlight in 2016 when it loaned R7.8 million to former president Jacob Zuma to reimburse the state for upgrades to his private residence, after an outcry. The Constitutional Court ordered Zuma to return some of the money spent on upgrades. – Reuters