Reserve Bank applies for VBS bank liquidation

The application was lodged on Tuesday. 

The central bank says although VBS is still under curatorship, the Prudential Authority is of the view that the curatorship must be terminated and VBS wound up.

"This is as a result of the fact that VBS Mutual is hopelessly insolvent and massive frauds have been perpetrated against it.

"As a result there is no prospect of entering into any resolution plan in respect of VBS Mutual Bank,” the bank says. 

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The Reserve Bank released a damning report in October that detailed the looting of nearly R2 billion from the Limpopo-based bank. 

The report, compiled by advocate Terry Motau, fingered more than 50 people in the looting – including several high-ranking officials and their family members. 

 

Finance Minister Tito Mboweni said during his maiden medium-term budget policy statement that he believes the bank could be saved. 

But the Prudential Authority says the final winding-up of VBS is in the best interests of all parties.

"This will then allow a liquidator to utilise the machinery provided for insolvency legislation and the Companies Act to effect recoveries, and to follow the recommendations of the investigator who investigated the affairs of VBS and who has prepared a report into VBS.” 

The application is set to be heard in the High Court in Pretoria on November 13.