VBS Bank explained: Everything you need to know in a nutshell

News of the financial treachery at VBS Bank has been hard to avoid over the past couple of weeks. There’s been a constant barrage of disastrous developments which have pushed the institution towards the brink

So we’re taking a look at everything that’s lead us to this point, who has been involved, and what happens next for the beleaguered bank:

VBS Bank scandal explained – the how, what and who:

How the VBS crisis began

A liquidity crisis began at the start of 2017, where the bank’s top brass failed to effectively manage rapid expansion from a period of growth. The entirely black-owned institution came under fire in 2016, for agreeing to loan R7.8m to Jacob Zuma for his Nkandla repayments. It’s not thought this played a role in the bank’s downfall.

They were placed in curatorship back in March, where an independent regulatory body was appointed to investigate what was going on. Forensic investigators led by Werksmans Attorneys and advocate Terry Motau dug up some pretty damning dirt through their research.

How much money was “looted”

That “liquidity” crisis was more like a greed crisis. A total of 53 perpetrators are said to have stolen R1.894 billion from VBS coffers. In the “VBS Mutual Bank – The Great Bank Heist” report, its largest shareholder plundered the most: Vele Investments are said to have taken R936m of the bank’s reserves.

Who is responsible?

Take your pick. ANC Limpopo treasurer Danny Msiza was reported to be the kingpin behind the operation, influencing municipalities to illegally deposit funds into VBS Bank. He has denied any responsibility, labelling the allegations as “political smears”.

Then there are the internal suspects: VBS Mutual Bank Chairperson Tshifhiwa Matodzi allegedly received R325 million of the loot. CEO Andile Ramavhunga reportedly took R28.9 million for himself. Fellow high-ranking officials Robert Mandzonga and Phophi Mukhodobwane are also said to be guilty of pocketing R30m each. Meanwhile, KPMG partner Sipho Malaba is called out for stealing R34 million.

What is Brian Shivambu accused of?

He’s also said to have received R16 million in the great South African sell-off. The brother of EFF Deputy President Floyd Shivambu has, rightly or wrongly, become the most talked about “looter” of the institution – something Julius Malema has called “unfair”.

What happens next?

The bank has had to retrench a whopping 94 staff members, with just 26 remaining in their positions. It’s been an annus horribilis for VBS Bank, whose staff will now operate from one central location at their headquarters. A total of 83 workers were due to get their 13th cheques in December.

A clear path forward for the institution is yet to be established. It’s likely there will be severe repercussions for anyone involved in the looting, and that includes the political figures we’ve mentioned earlier in the article.