Frustration is spreading after the trial in the R2.3 billion VBS Mutual Bank robbery has been postponed again, with one defence lawyer arguing his client is suffering financial disadvantage because of government incompetence.
PPlans are underway to revive the looted VBS Mutual Bank and extensive efforts are being made to reopen the bank as a commercial entity under a new name.
Chief Livhuwani Matsira, founder of the Matsira Community Development Trust, Mail & Guardian This week the trust said it had held discussions with the South African Reserve Bank on how to revive VBS.
The trust is an organisation that focuses on community development and empowerment, particularly in Limpopo, and has played a key role in helping some people get their money back after VBS was liquidated.
Matsira said the trustees have been advised to consider commercialising the bank and bringing it under “regulatory oversight”, which could help prevent the mismanagement and corruption that has plagued VBS in the past.
“The central bank explained that the strengthened regulations will contribute to improving financial stability and liquidity, attracting more investments and deposits, and rebuilding confidence among depositors and the financial community,” Matsila said.
It would be beneficial for the Venda people if VBS were to be reinstated as a commercial bank, but a change in name and management would also be beneficial in rebuilding people's confidence.
He added that the new bank would stimulate growth in the local economy, create jobs, support entrepreneurship, demonstrate a commitment to accountability and restore confidence in the banking sector.
“Having a local bank doesn't just revive a financial institution; it's a critical step in rebuilding local economies and restoring confidence in the financial sector.”
He added that the bank will be working with a public relations and marketing firm to be guided on which names to consider.
Accounting fraud led to VBS executives being robbed of R2 billion between 2015 and 2017. The stolen money was used to buy mansions, luxury cars and helicopters.
In a recently leaked affidavit, the bank's former chairman, Tshiphiwa Matozzi, alleged that several senior executives and politicians, including leaders of the ANC and the Economic Freedom Fighters (EFF), were involved in the looting.
Matosi's affidavit was part of a plea bargain which saw him given an effective 15-year prison sentence for his role in the plundering scheme. The affidavit alleges that the ANC's Zweli Mkhize and Danny Msiza, as well as EFF leader Julius Malema and deputy chairman Floyd Shivambu, were involved in fraud and corruption.
The report details how Shivambu and Malema were aware that payments made through the Sgameka project, registered in the name of Floyd's brother Brian Shivambu, were illegal.
In an affidavit at the Specialised Commercial Crimes Court in Johannesburg, Matozzi said he paid R16-million to the EFF after meeting with Malema, Shivambu and executive director Marshall Dlamini in April or May 2017.
The money was allegedly paid to stop the party from criticising the bank in public.
The criticism came after VBS gave then-president Jacob Zuma a R7.5-million loan for a mansion in Nkandla, KwaZulu-Natal, and Matodzi said the EFF's “negative comments” about the loan were ” [VBS’s] reputation”.
Matozzi claimed he was asked to make a “donation” to the EFF to stop the organisation's public denunciations of the bank.
“Because myself, Julius and Floyd understood the concept of donation to mean gratification, Floyd and Julius did not provide me with EFF's own bank account information for these 'donations,'” Matoji said.
Matsira said thorough background checks on the bank's accountants and managers were necessary to avoid a repeat of what happened at the bank, adding that there would be regular auditors to ensure there were no irregularities in the process.
He said better relations with the central bank would allow any problems at VBS to be addressed more quickly.
Matsira's comments echo those of VBS founding director Madambi Mbulawa, who said he had complained to the central bank about the bank's “suspicious” activities but received no response.
“Lack of relationship between VBS and SARB [South African Reserve Bank] “It was also to the bank's detriment. If the relationship had been better, the SARB could have acted quickly and saved the bank,” Mavhlawa said.
At a meeting of the ANC's national executive committee last week, the party's Limpopo provincial secretary, Reuben Madadze, proposed reviving the bank, including measures to prevent a repeat of the looting.
But the central bank said it was not possible to revive the looted banks in their current form as they lacked banking licences.
“The bank is in liquidation and its licence has been cancelled. With regard to new banking licences, any organisation can apply for a banking licence provided it meets the necessary criteria to be a deposit-taking institution. As you will be aware, there are multiple banking licences available to apply for,” the Reserve Bank told the M&G.
The Reserve Bank's Prudential Supervision Office has indicated it intends to consult with those interested in setting up a similar bank.
VBS went into liquidation in 2018 and had its banking licence suspended. The bank's liquidators are still in the process of recovering unpaid loans.
The bank's remaining assets will be sold to repay millions of dollars owed to depositors.
