VBS consequences still felt by municipalities - Maluleke
Auditor General Tsakane Maluleke says municipalities that invested in VBS are still feeling the impact of the mutual bank’s collapse.
In total, 15 local municipalities in Limpopo, North West and Gauteng deposited about R1.6 billion with VBS Mutual Bank, in contravention of the Municipal Finance Management Act and after being instructed not to do so by the National Treasury.
The money was lost when the bank was declared insolvent and placed under curatorship in 2018.
In July, former VBS Bank chairperson Tshifhiwa Matodzi agreed to a plea deal with the National Prosecuting Authority, resulting in a 15-year sentence.
Matodzi also named and shamed a number of people he alleged were involved in the looting of the bank, including former EFF deputy president Floyd Shivambu.
Last month, Justice Minister Thembi Simelane was also dragged into the scandal.
She is under pressure to step down after it emerged that she received an alleged loan of more than R500,00 from a VBS-linked fixer to pay for a Sandton coffee shop.
Simelane received a loan from Gundo Wealth Solutions during her tenure as Polokwane mayor.
She has since sent President Cyril Ramaphosa a report detailing the circumstances of the loan received from a company linked to the VBS Mutual Bank scandal.
"If you look at the municipal space, there are some management information systems. There are a total of 13 management information systems in the municipal space that relate to the investments that were made with VBS. It's an issue that has haunted many municipalities and their communities for a very long time,” Maluleke told the National Press Club on Thursday.
"We identified a financial loss of R1.6 billion associated with those investments.
Maluleke said that a lot of the money has not been recovered.
“Municipalities that would have raised this management information are the 13 municipalities that had lost R1.6 billion. They have recovered R107 million, maybe 7% of what they would have lost, which is a real tragedy because this is money that should have gone into fixing infrastructure so that citizens could enjoy service to them.”
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