Reserve Bank Report Shows VBS To Be Corrupt & Rotten
VBS Mutual Bank got into trouble for illegally taking deposits from Municipalities and soon ran into cash flow problems as consumers grew worried and tried to withdraw their savings. The bank had to be placed into administration in an effort to try salvage the situation.
The bank did not have the needed funds to give consumers their money back and it was revealed that there had been some serious ‘financial irregularities‘. Fortunately for the depositors (many of whom had life savings tied up in the bank) Nedbank sprang to their rescue and assisted these consumers. [read that story here]
An investigation was launched and it was found that Millions and Millions of Rand were missing.
‘It is corrupt and rotten to the core’
The SA Reserve Bank called for an audit and report into what went wrong. The detailed 139 page report by Advocate Terry Motau is titled: The Great Bank Heist. The report reveals rampant corruption, looting and illegal activity.
The Great Bank Heist
It appears that at least 53 people in the bank, almost all of whom filled some sort of management position, benefitted as R1.9 Billion was looted from the coffers.
Discussing the level of corruption the report states that there is ‘hardly a person in its employ in any position of authority who is not, in some way or other complicit’.
The shocking report shows that favoured clients received access to credit who had no deposits or realistic ability to repay. It also shows that the bank issued payments to individuals in exchange for big deposits from state entities and municipalities. If these clients brought in these large deposits they received payments or large lines of credit which were never paid back. In many cases the credit limit was just extended again and again.
VBS are famous for being the bank to bail out the former President Zuma when he had to “pay back the money“. This caught the medias eye as they were unsure how the Former President was going to be able to repay the loan based on his income. It is illegal to give consumers credit which they cannot realistically afford to repay. This is one form of reckless credit.
It seems the ties to the Zuma family do not end at this famous Nkandla loan. According to the report, a former VBS CEO, Andile Ramavhunga says that he oversaw payment of R1.5 Million to the “Dudu Myeni Foundation” so as to get a state-owned rail agency to deposit R1 Billion with the bank. A little tit for tat exchange. The foundation referenced appears to actually be the former President’s foundation (which famously paid out over R4 million in emoluments to Chairperson Dudu Myeni between 2013 and 2017).
The prelude to the report reads:
More than forty years ago the most daring heist in South Africa’s banking history took place. A group of industrious thieves, led by the elusive Mister Nightingale, skillfully tunnelled their way some twenty-one meters underground into the vault of the Standard Bank in Krugersdorp. The bold bank robbers withdrew the princely sum of R400 000. They disappeared with the loot and no arrests were ever made.
I have, for the past five months, investigated the sorry affairs of the VBS Mutual Bank. My report will reveal that the perpetrators of the heist at VBS made away with almost R2 billion. And they certainly did not put in anything like the hard work and effort of Mister Nightingale and his team. I trust that, in this case, arrests will be made.
~Advocate Terry Motau
Download The Report Now